What exactly is paid for when making games?
Everything related to running a company.. support staff, the developers, artists, so on. There's a reason for big games especially the budget can be in the millions of dollars range, most of that just goes to salaries, travel expenses, software licenses and such.
Remember that games studios are still businesses at the end of the day, and unless you're in some ridiculous high rent location and have token staff, the biggest cost by a long margin is going to be people's salaries.
There isn't really a specific line-item expense listing, every company is going to be a little different.
electricity is not free, imagine how much the bill is after all the computer use to developer a game...
Besides the software itself.
Actually, the software is often free.
What you pay for is the time of the people who develop the software, the time of artists who create the assets, the time of support and management staff who keep this working smoothly, the time of the sales and marketing staff who get the product out to consumers, the time of the legal and accounting staff who look after the interactions with other businesses and the various authorities. Some payments go to the physical plant (office space, electricity and internet), capital (computers, private jets, money), and the aforementioned authorities who take their cut.
Some small amount of payments may go to purchasing software, although that is usually included in the captial account along with the hardware it runs on: some licensed software can be accounted for under monthly or annual expenditures.
At the end of the day, if there is anything left over, payments called dividends go to the business owners.
Is there any reason to believe making games works differently than any other business?
The general formula for a startup in the US is $10,000 per month per employee. This is the normal business plan estimate. It covers not just salary, but also support costs such as IT and servers and internet and so on, hardware, software, support staff, facilities and utilities, and everything else.
There isn't really a specific line-item expense listing, every company is going to be a little different.
I didn't know that. $10,000 sounds really really low for a tech startup, unless you've got fewer than 8 people or something. That's interesting
