Study Claims Average Game Budget Is $23 Million

Greg Tito

PR for Dungeons & Dragons
Sep 29, 2005
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Study Claims Average Game Budget Is $23 Million



An independent study claims that the average cost to develop a AAA multi-platform game is around $23 million.

M2 Research is an analyst group which specializes on reporting statistics for the videogame industry. According to Develop [http://www.develop-online.net/news/33625/Study-Average-dev-cost-as-high-as-28m], M2 Research released information stating that the average budget for a multi-platform next-gen (meaning current generation) game is between $18 million and $28 million. A single platform game is reported to cost an average of $10 million, according to the same study.

Many high-profile titles cost more than that, with budgets as high as $60 million. Develop points to Gran Turismo 5 costing almost $60 million and Modern Warfare 2's budget of almost $50 million.

Taken by itself, this information is fairly innocuous to the regular gamer. What is important is how the rising cost of making games can ripple throughout the industry. With budgets soaring like this, it is clear why the price point for games is also rising. If the trend continues, we may see games costing $70 or even $80 in the near future.

Why are games costing more? Time is an important factor, which is connected to the rising cost of skilled labor. In the infancy of the gaming industry, coders, programmers and artists were happy to be working on games at all and so they were willing to accept low pay and/or incredibly long hours. Now that labor conditions have generally improved (Rockstar San Diego excluded [http://www.escapistmagazine.com/news/view/97391-Rockstar-Wives-Complain-About-Working-Conditions]), that means that labor costs have also gone up. Also, the amount of time and effort needed to make games look polished in this current generation has also gone up.

Not all of this is grim news. As different sources [http://www.escapistmagazine.com/articles/view/columns/going-gold/6908-Going-Gold-Practicalities-Makes-Perfect] have pointed out, games are generally of higher quality than they were ten years ago. The rising budgets of games just proves that all of that quality is not cheap.

Source: Develop [http://www.develop-online.net/news/33625/Study-Average-dev-cost-as-high-as-28m]

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Onyx Oblivion

Borderlands Addict. Again.
Sep 9, 2008
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What was Bayonetta's budget? because they have some filmstrip cutscenes, and I want to know if it was budget issues or if they were going for a style with them. Because they're actually pretty cool to watch.

OT: Wow. I don't think we should spend that kind of money. Makes it harder to risk making new IPs like Mirror's Edge and to get a profit.
 

Swaki

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Apr 15, 2009
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oh ffs, we are in the middle of a recession, i will rather have games with less impressive graphics and afford them rather than knowing that there are super pretty games out there i can never afford.
also
Onyx Oblivion said:
Wow. I don't think we should spend that kind of money. Makes it harder to risk making new IPs like Mirror's Edge and to get a profit.
that is so true, and while i didn't enjoy mirrors edge at all, its sad that new ideas will be rarer because off all the extra eggs in the basket (i really love that metaphor).
 

messy

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Dec 3, 2008
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swaki said:
oh ffs, we are in the middle of a recession, i will rather have games with less impressive graphics and afford them rather than knowing that there are super pretty games out there i can never afford.
To be fair games are still rather cheap, there wasn't a real increase with price from the previous gen to this one (xbox --> 360 gen). Going by my experience £40 is sitll the maximum charged for a new game (with some going over, e.g MW2) and I'd say its safe to say the content of the this games has "improved." By improve I just mean more stuff their (whether you like it or not is irrelavent it's still there), such as better voice actors (in some cases), online features (main change), improved graphics and physics engines
 

sgrif

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Oct 19, 2008
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I'm actually rather curious if the budget increase is primarily a result of the rising cost of labor, or if it has something to do with the level of detail having to go into every aspect of a game these days. Obviously a game today has a much higher poly count than a game 10 years ago. On the other hand, it's also much easier to create said models than it was 10 years ago.

I'm guessing it's probably a bit of both, although the one other major factor that nobody ever mentions is inflation. I'm honestly surprised we haven't already seen games go up another $10 in the US.
 

God's Clown

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Aug 8, 2008
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Increasing the price constantly will just increase the number of pirates, thus decreasing profits even more. So they are going to need to find a way to keep prices down.
 

Jared

The British Paladin
Jul 14, 2009
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Thats alot of money o.o Well, I suppoe big business these days so it cant be helped but Jesus!
 

Dudeakoff

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Jul 22, 2009
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Average cost of a Hollywood movie is more than $100 million
http://news.bbc.co.uk/1/hi/entertainment/3564377.stm
Bear in mind that the article was written 5 and a half years ago so it may have gone up (I don't know much about the costs of movies, could be that new technology cost = the cost of old technology when it was new, though that's probably false)
Movie ticket = $8 or $9 if I'm converting correctly
Game cost = $60

Sort it out.
 

Treblaine

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Jul 25, 2008
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Oldest fallacy in the book is that if you want in increase revenue you increase prices... it simply doesn't work that way. If prices go up less people will buy the game at launch price; a higher proportion will rent, buy pre-owned, wait for a cut price re-release (Platinum/classics range) or even pirate the game which is becoming a serious problem for consoles too.

The proportion usually goes down so much that net revenue from sales go down overall, then there is a chance of entering a vicious cycle of increasing the unit cost even further to recoup lost revenue.

Each game disk is cheap to print, the problem is getting enough people to buy at launch price but really how many people have $60 or £40 to spend on a game and how often do they have that much money? Especially spending on a game that may turn out to be over-hyped crap.

I can guarantee you if games sold at half their price I'd buy more than twice as many of them!

I know when Steam had it's major blow out sale I went insane and must have spent 10x I had ever intended to spend and got games I'd likely never have gotten at their normal price.
 

D_987

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Jun 15, 2008
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Dudeakoff said:
Average cost of a Hollywood movie is more than $100 million
http://news.bbc.co.uk/1/hi/entertainment/3564377.stm
Bear in mind that the article was written 5 and a half years ago so it may have gone up (I don't know much about the costs of movies, could be that new technology cost = the cost of old technology when it was new, though that's probably false)
Movie ticket = $8 or $9 if I'm converting correctly
Game cost = $60

Sort it out.
That's pretty moronic logic...even a linear shooter lasts you around 6 - 8 hours through a single playthrough - not including online. Even then, you can constantly re-play your game - you'd have to buy a new move ticket...you're getting pretty good value for money with that game of yours - especially if it's an RPG.
 

VashDaBest

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Nov 27, 2009
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archvile93 said:
And people wonder why game companies don't take risks by making lots of new IPs.
They don't take risks because most game companies that have a successful series want to keep making money. Therefore keeping a series alive. (E.G. That tortured overused example, Halo.)

Edit: Oh wait, sarcasm? Sarcasm is hard to tell with text. x.x
 

Heart of Darkness

The final days of His Trolliness
Jul 1, 2009
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I'm not surprised. I really think this ties into the industry's obsession with shiny, realistic (read: brown) graphics, which need both more experienced programmers and artists to render.

Higher quality games (graphics) = more moolah. Usually also means shorter games....
 

Plurralbles

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Jan 12, 2010
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I think they will run into a price ceiling, or companies will only make a AAA title once or twice a year just to sell consoles and push indie games the rest of the time.
 

EnzoHonda

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Mar 5, 2008
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Gaming's still one of the best bangs for your buck when it comes to time-wasting. With the advent of multiplayer, it's only gotten better. The real concern is not how much it's going to cost us, but how it limits creativity. Even then, if I get Mass Effect's and Uncharted's coming at me a few times a year, I'm happy.
 

sagacious

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May 7, 2009
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wow. High end video games only cost 1/4 of a high end film, and they are usually 5-10 times longer than a movie. Imagine what a game would be like if a company poured all the talent and technology of a high-profile film into a 2-hour game...

Short game, but I bet it would be dynamite, gives me the shivers.