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The Nature of Game Budgets

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As an aspiring game designer myself, I've always found this one particular asset of game development to be kinda odd. Why do games require so much money to make, anyway?

 

For instance, my two favorite games of all time, Lisa The Painful and Undertale, were made on a budget of at least $7,000 dollars and $5,000 dollars respectively, with the Kickstarter goals exceeding both by at least twice the amount wanted. Now, this is nothing compared to just how massive Triple A games can have their budgets, with Watch_Dogs having about 68 million dollars in terms of its budget.  68 million dollars. That's a lot of money, almost half of some movie budgets nowadays!

 

So the main reason I made this post is to ask: why? Why are games so expensive? Why do people need up to 5K to make an indie RPG?

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First up, are you still living at home, or do you pay the full expenses for a household? And: do you live in the US?

 

In a modern, western country, it's not unusual for someone's core expenses to be something like $2000-$3000 per month. i.e. that much money will keep the bills paid and their stomach full. Living comfortably in a city is expensive.

People will generally want to earn a lot more than the bare minimum that so they can afford to buy luxuries from time to time, or take their family on vacation... So $4k or $5k per month is is more like what they'd want to be bringing home. If you posses a skill that requires a decade of training to be good at, then it's possible to ask for this much income and have a comfortable life.

 

So, if you're running a business and want to hire a very talented game developer, and you've got $5k-$7k, maybe you can hire someone for one month, which is nowhere near enough time to make a decent sized game in!

AAA games literally require thousands of months worth of work to complete -- at $5k per month * 1000 months, that's $5M easily... and that's not including income taxes (if someone is on a salary where they earn $7k per month, the government gets $2k in tax and they take home $5k), healthcare plans, 401k schemes, rent/bills on the office, etc... A common "back of the napkin" figure is that in a tech industry, a month of work will cost you $10k (including salary, office expenses, etc) -- so if a game requires 100 staff for two years, that's $24M.

Games don't sell themselves though, so it's not uncommon for big publishers to spend $10M to $100M on advertising for a new game. Another "back of the napkin" approximation is that $5 of advertising will sell one copy of a game -- so if a publisher spends $100M advertising a game, then it will be a smash hit, selling 20M copies (regardless of whether it's good or not).

 

On the other hand, if you live in a shitty share house, live on instant ramen and make a game by yourself, maybe your core expenses are only $1k per month and you're happy to live without luxuries. In that case, $7k will pay your bills and keep you fed for half a year, which might be enough time for you to make a simple "indie" RPG.

Or if you live at home and have no expenses, you might be able to make an RPG for absolutely free.

 

tl;dr - it costs money to be alive. Everyone has to make enough money to be comfortably alive. In the cities of "rich countries", this is quite a lot of money. AAA games include a lot of people's time = their lives = money.

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First up, are you still living at home, or do you pay the full expenses for a household? And: do you live in the US?

 

In a modern, western country, it's not unusual for someone's core expenses to be something like $2000-$3000 per month. i.e. that much money will keep the bills paid and their stomach full. Living comfortably in a city is expensive.

People will generally want to earn a lot more than the bare minimum that so they can afford to buy luxuries from time to time, or take their family on vacation... So $4k or $5k per month is is more like what they'd want to be bringing home. If you posses a skill that requires a decade of training to be good at, then it's possible to ask for this much income and have a comfortable life.

 

So, if you're running a business and want to hire a very talented game developer, and you've got $5k-$7k, maybe you can hire someone for one month, which is nowhere near enough time to make a decent sized game in!

AAA games literally require thousands of months worth of work to complete -- at $5k per month * 1000 months, that's $5M easily... and that's not including income taxes (if someone is on a salary where they earn $7k per month, the government gets $2k in tax and they take home $5k), healthcare plans, 401k schemes, rent/bills on the office, etc... A common "back of the napkin" figure is that in a tech industry, a month of work will cost you $10k (including salary, office expenses, etc) -- so if a game requires 100 staff for two years, that's $24M.

Games don't sell themselves though, so it's not uncommon for big publishers to spend $10M to $100M on advertising for a new game. Another "back of the napkin" approximation is that $5 of advertising will sell one copy of a game -- so if a publisher spends $100M advertising a game, then it will be a smash hit, selling 20M copies (regardless of whether it's good or not).

 

On the other hand, if you live in a shitty share house, live on instant ramen and make a game by yourself, maybe your core expenses are only $1k per month and you're happy to live without luxuries. In that case, $7k will pay your bills and keep you fed for half a year, which might be enough time for you to make a simple "indie" RPG.

Or if you live at home and have no expenses, you might be able to make an RPG for absolutely free.

 

tl;dr - it costs money to be alive. Everyone has to make enough money to be comfortably alive. In the cities of "rich countries", this is quite a lot of money. AAA games include a lot of people's time = their lives = money.

 

I do still live at home, thankfully. Do to my current age, and the fact that I'm still in high school, I do not pay for the expenses of the home, thankfully. With that, I do, indeed, live in the USA.

 

That is true, yeah. Life is expensive.

 

Oh my. Putting it like that, that is A LOT of money. And that's just for employment; I don't want to know how big game budgets can be if you account for advertisements.

 

Thankfully, with all that is said and done, I'm more or less the latter of the categories here, as I have no expenses to speak of for the most part. Hell, I was honestly kinda perplexed as to why a game would need so much money when all one really needs is a computer, an engine/program for making the game, a music program, an image creator program, etc. At least, that's all one needs for "indie" RPGs like Lisa and Undertale, both of which were made more or less by one guy.

 

In any case, this definitely sheds more light as to how big my "game budget" is probs going to be. The game I'm making isn't gigantic, probs no more huge than Lisa the Painful. In fact, in all honesty, the only two places where I imagined I would probably need an amount of money to spend on would be for music and for sound effects (sound effects in particular. That stuff is going to be a massive pain, I can already tell. I'm already thinking about making another topic for that somewhere too.)

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Why do games require so much money to make, anyway?


Moving to Business forum. But the short answer is "because people's time is expensive."
 

I don't want to know how big game budgets can be if you account for advertisements.


I'll tell you anyway. Sometimes a publisher will spend equally on marketing and development (so double the
cost of development - and we haven't started talking about manufacturing, licensing, and distribution yet). Edited by Tom Sloper

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We have updated the envelope estimation number from $10K per developer to $15K per developer, per month. The number also includes things like utilities and taxes and insurance and so on.

So yes, a small game of 4 people made in three months, or a large game with 150 developers over 36 months, do the math for development costs.


We also assume development costs are about 1/3 of the total cost. In addition to the development costs of production there is pre-production, post-production, marketing, launch support, customer support, and other costs. If you spent $3M developing it, expect the total cost to be $9M.

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Basically it goes like this:

 

Creating a single asset at a reasonable quality takes far longer than anyone thinks.

 

How long do you think creating a reasonably detailed 3D Model of a human being takes, given it has to be customized? A day? A week?

Most probably your estimation until your tried it yourself is WAY too low. Now, there are ways to cut down on the time needed... stock art, character generators, kitbashing parts (which is why more and more "low cost games" make a lot of use of stock art to the point game reviewer actually start seeing that as a negative trend as low cost games start to look more and more alike)...

But then, if you REALLY need a custom character, that will only reduce the time somewhat (most artists will not start from scratch, but use parts of earlier models created). Then there is the fact that many AAA games nowadays need WAY more than just a reasonably detailed character... want to show off your character models in a cutscene closeup? Well, you might have just tripled your modelling and sculpting work.

 

And that is just the beginning. Texturing the character, rigging and animation, voice overs, and programming all the interactions all take a lot of time. At least for an AAA title were everything is done to "perfection".

 

 

In the end, small Indie Games get away with small budgets because they work under a "good enough" mindset. They see what kind of art style could work within their limited budget, and then cut some corners to make it work. The result is "good enough", which is reasonable for a 10-15$ Indie game that most people play for its innovative gameplay or story, not the graphics glitz or voice overs.

The AAA Industry on the other hand work under the "it has to look as good as it can" mindset. They have to justify that 60$ pricetag, and people expect the world of their products. this product has to appeal to everyone and their dog, so in the end it has to look almost perfect.

 

Thus what would have costed 5000$ under a "good enough" mindset and would have looked charmingly retro to the small niche of players interested, and pretty crappy to the average AAA-Games Player, costs now 50+ million $ under a "has to look as good as it can" mindset, looking good to even the average AAA-Games Player.

You can bet while the small Indie Shop maybe spent days on getting the simple sprite sheets for the main protagonist ready, and preparing the animations, with the artist and programmer each maybe spending 1-3 days in their part of the work, the AAA devs spent many person months on the main protagonist alone, with a character designer, 3D modeller, maybe a separate 2D Texture artist, a rigger, animator, an actor for moCap, another for voice overs, programmers and testers involved to make sure the result meets the high quality standarts of the AAA business (and the f*ckups of the last few years *cough*Batman games*cough*Assassins Creed Unity*cough* only strengthen that you cannot get quality for a lower price tag).

 

That can easely run into 100x or more of the work involved for a single asset. Calculate that up to the full project, add the management costs for large teams, double the budget at least to make up for the marketing (which often is more than double the development budget to make sure the game sells enough copies to recoup the cost), and you add at the insane costs of modern AAA games....

Edited by Gian-Reto

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This topic is 413 days old which is more than the 365 day threshold we allow for new replies. Please post a new topic.

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