oktalist said:
I would think that most of a game's budget goes on marketing. Which is the publisher's responsibility. A developer doesn't see any of that money.
Average salary $40,000 * 100 people * 3 years = $12,000,000 <- that's more like it
That's for a medium-sized team; for a bigger one that could easily be tenfold more people working on it, but then you're getting into the law of diminishing returns. You really don't need a thousand people working on a game, but these big studios don't see that, so they end up with inflated budgets that aren't contributing a proportional amount of end product value.
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I'm not a capitalist, so I'm free to stand back and say, "ha ha, look at your stupid system of paying people an amount of money apparently unrelated to the value of their labour."
It's not a case of developers demanding money from publishers, more like developers saying, "this is the game we want to make, this is all the cool features it's going to have, and this is how much it's going to cost to make," and the publisher says, "okay, we'll give you half of that, but we still expect the game to have all those cool features you just told us about."
It's really the publishers who are at fault, not developers. Developers do everything they can to bring costs down. Maybe the very very big developers share some of the blame, but they are a minority among development studios.
Alright I cut a lot of this for the sake of space.
We're getting well off topic, but I will point out that your example about 12 million dollars would make sense if that is what the funding of these games was like. Most games are developed a bit faster (one or two years it seems going by most franchises) and the budget is also much, much higher. If a game has an 80 million dollar budget, and would logically cost 12 million for the coders, and say another 3 million for equipment and office space, your only looking at 15 million dollars so where did the other 65 million dollars go? This is the problem with most arguements made by people who try and say the programmers aren't making that much money.
In the case of Modern Warfare 2, the budget broke down as two hundred and fifty million for the game itself, and another two hundred and fifty million for marketing, or so they say publically. Given that the ads for MW2 didn't seem all that impressive, it also comes back to the "where did the money go" because compared to some other games with elaborate ARGs, short movies, and everything else done to promote them, MW2 wasn't anything special. That money is sticking out of someone's back pocket, because it sure as heck wasn't spent on promotional materials.
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When it comes to publishers and developers, your partially right. The thing is that there is no one clear cut way this works. Publications like Game Informer and various websites have gone into the whole Publisher/Developer relationship on a number of occasions.
Sometimes you wind up with a developer that borrows money to develop a title, however in many other cases the producers themselves have an idea and head out to hire a developer to make the title, OR most commonly someone with a bunch of money who wants to put that money to work for them decides to produce a game (or several) as an investment, and will walk up and say "I want you to make me a game that will produce money like World Of Warcraft and make me rich" or something similar (albiet not in those words).
In other cases you have totally in-house production and development where a big umbrella company owns developers and produces ideas for games based on what analysis says will be popular and then distributes the money to their in-house developers to produce those games in what amounts to formula.
... basically in the end it all depends on whom your dealing with.
In many cases it's the developers deciding how much something is going to cost, based on how much they want to get paid. Some producer says "make me a game", and the developers say "okay it will cost you a hundred million dollars, we'll have it ready in two years" then the developer uses that money to keep their equipment updated, pay off their office rental, and most importantly to pay themselves. This is also how a lot of "vaporware" comes about, when a developer takes the money, spends it living like kings, and then never bothers to develop the game or do much work at all. In some cases developers have been able to string producers along for years, taking money and not producing anything. You can find dramas like this attached to a lot of games that never saw the light of day.
In cases where a developer borrows money to produce something (as opposed to being hired) the same basic thing tends to be a factor where the amount of money being borrowed again comes down to how much these guys want to pay themselves. This is why all contracts aside, when a company goes down there is usually a lot of legal threatening and so on because there might not be any way for a producer to get his money back if he wasn't careful. The company that borrowed from him no longer exists, but the wages paid by the company to it's employees are still the property of those employees... or "thanks for the new Lamborgini".
When it comes to the idea of totally corperate development, where producers and developers are both "in house", this is where things tend to get the most obnoxious. The developers pretty much demand outlandish amounts of money (despite what is publically disclosed) perhaps under threat of going to someone who will pay them if those demands are not met. The producers pay those fees as part of the game budget, but then set the prices accordingly and pass the expense down to us poor schmucks at the bottom.
All comments about scams aside, more often than not things work out between the two sides. The key element is basically that in most relationships even when acting honestly it's the developers who set the cost of production based on what they think they are worth, then the producer needs to sell the end product at a price sufficient to make their money back, and then some as a profit.
Of course this is all based on things I've read here and there where parts of the process have been explained by one person or another, not to mention some of the "Drama" generated based on deals that fell through. In the end though, most of the real numbers are kept under the table.
The point being that no matter how the game is produced, the bottom line is that if a game is carrying a budget of tens or hundreds of millions of dollars, the guys doing the work are getting paid a ridiculous amount of money, because the cost of materials simply is not that high to produce these games. There is no way around that. Sure office space and computers are expensive, but not in comparison to these budgets. Someone winds up with that money in their bank account, money always moves, it does not disappear.
Typically most people focus on the tug of war between developers and producers. I am not taking a side on that here, just talking about the money and the bottom line.