Cost Of Game Programming
Problem is, it's impossible to account for piracy. There is no way to know the reality of what it costs the developers. A dev would have absolutely no idea that the 8000 units were lost to piracy or lack of interest or what.
You're right that there is no way to know the exact cost, but there is a term for it, "undefined costs" or something like that. My business teacher was saying that you should take them into account. His advice was 5%-10% of your expected profit, although, I don't think there is a specific rule for that. Just don't forget to take it into account.
Every business has to pay those costs. For example, people steal from stores, fraud insurance companies, etc. In our industry, they pirate. Once I was talking with a taxi driver, he was saying to me that a good day of work was when no one ran without paying :)
Every business has to pay those costs. For example, people steal from stores, fraud insurance companies, etc. In our industry, they pirate. Once I was talking with a taxi driver, he was saying to me that a good day of work was when no one ran without paying :)
Quote:Original post by Darkneon
You're right that there is no way to know the exact cost, but there is a term for it, "undefined costs" or something like that. My business teacher was saying that you should take them into account. His advice was 5%-10% of your expected profit, although, I don't think there is a specific rule for that. Just don't forget to take it into account.
Every business has to pay those costs. For example, people steal from stores, fraud insurance companies, etc. In our industry, they pirate. Once I was talking with a taxi driver, he was saying to me that a good day of work was when no one ran without paying :)
The point is that this isn't a *cost*, in the business sense of the word.
The place to take piracy into account is when calculating potential revenue. Costs is money spent on things like salary, rent, distribution. At no time due you *pay* people who copy software, or otherwise pay money as a result of it.
Things would be different in the case of people stealing from stores or running without paying for a taxi, because the company still has to spend the variable costs associated with the stolen item, or making the taxi journey.
What about things like getting a bad review, or a competitor releasing a similar but better game, or releasing at a poor time of year? These are things which affect revenue, not cost.
This also assumes that the broke college student would actually buy your game if they didn't pirate it. It's not a lost sale if they'd never buy it in the first place.
By far, the most expensive resources in setting up a gaming company would be Employee salaries, Office space and coffee supplies, though not necessarily in that order.
It may very well be that the cost of making your game is tens of thousands rather than millions of dollars.
1. Wages and expenses are much lower in Kenya than in the U.S. and Europe.
2. A small simple game might take 2-3 people working for a year.
3. Distributing the game over the internet would avoid manufacturing and shippin costs.
Games with budgets in the millions are generally large and complex, requiring 20 or more people working for 2-3 years. These games usually have a marketing budget that itself is over a million dollars. For console games, there is also the cost of licensing and manufacturing which is something like $10-$20 per unit.
1. Wages and expenses are much lower in Kenya than in the U.S. and Europe.
2. A small simple game might take 2-3 people working for a year.
3. Distributing the game over the internet would avoid manufacturing and shippin costs.
Games with budgets in the millions are generally large and complex, requiring 20 or more people working for 2-3 years. These games usually have a marketing budget that itself is over a million dollars. For console games, there is also the cost of licensing and manufacturing which is something like $10-$20 per unit.
Regarding the impact of piracy, when my company started electronically licensing our tools, we say an increase in over 30% in revenue. Although the only down side is the administration of licensing but this was easily absorbed by the extra revenue.
Alistair
Alistair
Look at the revnue you'll get also. But game programming is expensive, and the outcome isn't always great.
Example: Halo 2
In the first 2 months, it sold around 6.4 million copies. Since this was the high time, that's about the maximum ammount of copies to be sold per month. From averages that I've picked up, let's say that they sell 2 million copies for the next 3 months and then 1 million copies until now.
Average Income Now: $8.1 million
Microsoft probably could care less for a few million...
Now, let's transition to what you might get.
Halo 2 is a sequal of the most popular game ever made. Halo was commonly known, and people knew it was made by Microsoft. Halo was made by a section of Microsoft called Bungie, who had made many good games before. Therefore, being talented workers cost a lot. Plus, I believe, there were about 70 working on the project.
Your game:
Not known to many. It's made by a new company that most people haven't heard of. Not going to have a huge ammount of people working on it. Not going to be best of quality.
If you hit it good you might get something like $1.3 million...
Also, developers are looking for about $200,000 a year each...
Example: Halo 2
In the first 2 months, it sold around 6.4 million copies. Since this was the high time, that's about the maximum ammount of copies to be sold per month. From averages that I've picked up, let's say that they sell 2 million copies for the next 3 months and then 1 million copies until now.
Average Income Now: $8.1 million
Microsoft probably could care less for a few million...
Now, let's transition to what you might get.
Halo 2 is a sequal of the most popular game ever made. Halo was commonly known, and people knew it was made by Microsoft. Halo was made by a section of Microsoft called Bungie, who had made many good games before. Therefore, being talented workers cost a lot. Plus, I believe, there were about 70 working on the project.
Your game:
Not known to many. It's made by a new company that most people haven't heard of. Not going to have a huge ammount of people working on it. Not going to be best of quality.
If you hit it good you might get something like $1.3 million...
Also, developers are looking for about $200,000 a year each...
Quote:Original post by dbzprogrammer
Also, developers are looking for about $200,000 a year each...
lol I think you are confusing business programming for game. For 200k / yr you are lucky to make that as producer on a game. If you look at the industry average it is between 50-80k / yr.
[Edited by - Saruman on August 8, 2005 10:07:42 PM]
Quote:Original post by dbzprogrammer
Also, developers are looking for about $200,000 a year each...
I've been looking all my life for that, but haven't found it yet. If you know where I can get that kinda dough, let me know!
-John
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