I have this major doubt... do the game dev and publishers get the money they actually put in? some games take yrs to develop and programmers put in a hella lot of effort to create a single game.. do they get what they put in? if a team of 20 members work for a yr say with salary 60K for each, the company spends around 1.2 million $ on the game dev guys.. then they have to advertise and stuff.. if they sell each game at $40 a game, the would have sell atleast 300,000 copies to get back the money.. so to have a good profit, they have to sell atleast 100,000 more copies.. my doubt is r so many games sold throught out the world? some games takes yrs in dev and many many ppl are involved, so do the publishers get what they put in??? Slow and steady wins the race.

The easy answer is: some do get the money back (otherwise the industry wouldnt even exist) and some dont get the money back (which explains why a lot of companies close and all the big name publishers have been reporting losses). If you want some specific numbers (which game make how mich, percent of games that break even, etc) I cant help you there.

Most games (I remember reading a figure like 80%) do not make their money back. That''s why publishers have to diversify their portfolios. Many of the games we assume would do well actually flop, but the success of games like Tony Hawk''s Pro Skater and the Sims allow publishers to funnel money into other projects.

I read that RTCW cost over US$10M to make. Unless they sell a million copies, they won''t make a profit, and selling a million copies of a game like RTCW is not that likely. 3D shooters are a fairly niche market (8-10%).

Don''t forget, if a game costs $40 in the store, the publisher''s probably only getting about $15-20 of that after they pay distribution costs, marketing, COGS, any licensing fees, etc. The developer''s royalty sometimes comes as a percentage of this NET after publisher expenses (depending on how the contract was negotiated), so you can imagine developer royalties are not as common or lucrative as you might expect.

While what Tacit says is mostly true I think the $10 mill figure mentioned includes some very creative accounting. That game was developed using an existing game engine. The only way to spend $10 million on it would be.....

1. vastly, vastly overpay the staff
2. Include the cost of developing the game engine into the budget for RTCW (even though this engine cost is being offset by licensing the engine for several different games).
3. Set up a state of the art studio big enough for 5 teams and put all the cost on RTCW.

I have seen item 3 happen and the game that everything was billed to ended up only selling 40,000 units - woops.

Dan Marchant
Obscure Productions

While I''m not provy to the accounting practices or the balance sheets at id Software or Grey Matter or Activision, I don''t have any reason to doubt the veracity of these numbers. Much less ambitious games (production-wise) with fewer parties and smaller development teams have managed to rack up big bills ($5-7 million US). I believe some of the post-mortems at Gamasutra support this statement...

To go back to krad''s original post, if the average staffer is pulling in $50k, and the team has 20 full time people (not to mention any additional freelancers they might need, or any third-party companies they farm work out to like motion-capture ($2000/day), voice work, FMVs, music, etc., you''re looking at $1M/yr just on salaries. On a 4yr development cycle that''s $4M just in salaries. Now add office space, equipment costs, engine (or development time for an engine; Q3 is $350k + % of royalties), legal fees, accounting fees, take out food , and you can see how these things add up over time...

I don''t think $10M is so hard to believe.

No wonder ppl release expansions.. i think thatz where they get their money from... cos all the base work is already there, u just make a few changes and release it.. u probably spend 1/4th of the money u spend on the original and u get as much as u got for the original.. i guess.. what du guys say..

Slow and steady wins the race.

Well, expansions are probably a good way to make some 'easy' money. They take much less time to make, and as you pointed out the tools and technology are already in place.

Still, if the original title is not financially successful, it seems unlikely that a sequel would be made. But hey, anything's possible!

[edited by - Tacit on April 23, 2002 11:51:57 AM]

Your math is wrong. That''s 30,000 copies to break even. But even that''s not quite right. On a $40 game, they might see 30$ of that, so you need to adjust appropriately.

That said - most games sell far less than 30,000 units. Its a rare game that hits 100,000 (especially in the PC market).

But yes, quality developers can get paid quite well. As a developer, if you establish yourself as a company that ships quality titles on time, you earn the ability to negotiate better terms - better royalty schedules. And that''s where a 20 man team can make a killing. If you sell 300,000 units for a 20 man team on a 1.2 million dollar budget, and you have a good royalty %, you could expect to see 60k+ bonuses (over the lifetime of the project) if you''re a "critical path" type person.

That said - such a situation is _way_ unusual. Most games that are going to sell 300,000 cost far more than 1.2 million and typically have more than 20 people on them.

Bottom line - yeah the game industry is massively competitive and difficult to stand out in. But when you do, you can do quite well.

I remember reading something both at Id Software''s site and Epic''s site about their sales figures and both of them claim having sold over 1 MILLION COPIES of certain games (I think DOOM, Quake, and Unreal). So just do your math! 1,000,000 x $30
that''s $30,000,000 per game, enough to pay 30 years of salaries on your numbers!!

My point is, Best selling games DO SELL around 1M units (remember this is a globalized world now!!), average games sell around 100K-300K no problem (I also remember having read this info somewhere in Gamasutra, sorry I don''t remeber where!!)

I dont have any numbers for some of the not-wildly-successful games, but I found this link with some numbers for a few of the big sellers (warning...this is Vivendi's site, so take their numbers with a grain of salt as they could be fudged): http://www.vivendiuniversalpublishing.com/english_version/games.html

A quick summary:
Diablo 2: 5.7 million copies
Empire Earth: 1 million copies
Dark Age of Camelot: 300,000 copies

A few numbers for console games:
Crash Bandicoot SERIES: 24 million copies
Spyro the Dragon SERIES: 11 million copies

P.S.

Here's some more from:
http://www.videogamereview.com/dailynews/archive/arc6-2000.asp

(not sure how much of this is PC and how much console)
Final Fantasy 9: 3 million copies
Final Fantasy SERIES: 30 million copies
Pokemon SERIES: 65 million copies


[edited by - LordKronos on April 24, 2002 2:40:18 PM]