Slashdot Mirror
EA Spends 3x More On Marketing Than Development
G3ckoG33k writes "According to Electronic Arts officer Rich Hilleman, 'the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title.'" Sounds pretty insane, but does anyone know how this compares to the film industry?
Well maybe if they spent more money on the development they wouldn't need so much money into marketing... *sigh*
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
That would certainly be a very good reason that EA doesn't seem to be able to turn out decent games, or turns out games that have little to no polish on them. It also puts into perspective the "rising cost of game production." Probably they are over-marketing it, or marketing it the wrong way and to the wrong people. I've always thought that their TV adds for a lot of games were really wide of the mark, and probably a poor investment.
While marketing is definitely important, is it really necessary to spend 3 times your development costs? Do they spend that kind of money on annual titles like Madden, MLB, NHL, etc? Or just when they are new like TOR, Sims 3, Spore?
Often one heards that research costs drive the price of drugs high, but in fact a similar ratio between marketting and research costs exists in the drug industry.
The article linked is about handheld consoles outnumbering the regular sort, nothing about marketing.
I assume it's just a mislink. I'll just sit here and wait for a correction.
dum de dumm dum dum
And that was the last Terry Fox run I ever participated in.
All it takes is marketing to sell the same game repackaged with a new player on the cover every year.
Similes are like metaphors
I believe Kevin Smith said in one of his Evening talks that to many movies the cinema more or less functions as advertisement for DVD sales.
... many modern games are mediocre Sometimes I wish they need to lay off the marketing and pour that money into the game and giving devs more time to work on it.
I'm not surprised that marketing is a very large percentage of their total expenses, but three times higher sounds suspicious. Maybe their marketing expenses grew three times faster than development costs? Or maybe they look at not just a single title... It's really impossible to tell only by that joke of an article.
Maybe if they would make better games they wouldnt have to spend so much on advertising.
As if we couldn't tell where the money was being spent; definitely not in development.
Why do you think the games are so disappointing after seeing those shiny, 3D, live action commercials? "Actual game play may vary."
Let me guess. Their second largest expenditure is for the legal team: assimilating new development talent, buying out competition, defending against false advertising.
Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales.
That's because EA has signed exclusive agreements with so many relevant leagues (NCAA, NFL, NHL, FIFA). By definition, the only player in a market will get the best reviews because it gets the only reviews.
I can't get to the article, but what do those numbers mean? Is that a yearly average across all games, or for certain games? The words 'up to' always raise a flag with me as it often applies the worst case across a broad range. For example, it wouldn't surprise me if Madden 09 (is that ea, if not its equivalent?) fits this case. Much of the development is carry over from previous years, however its major bucks to advertise for your target audience during NFL games. This pretty much applies to all their sports games, which is a major part of their profits. I think the sports games will always be more marketing simply because they have a larger audience that can be easily reached by paying big bucks at the right time. And these games are pretty consistent cash cows.
Seems to me, the best products don't need advertising. The ones that don't sell themselves need others to run around selling them instead.
You're telling me EA actually spends money on development? Last time I touched anything EA made was 2003, Command & Conquer Zero Hour. A game full of pathing bugs, multiplayer sync problems and random crashes. They never fixed it.
Noting the success of the DS, PSP and iPhone, Hilleman slammed the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title.
While the article is about handheld sales now being double that of consoles, it most certainly talks about the marketing costs. Read the whole article Sparky.
To sell a turd, you need a lot of gold plating or people will smell and see that it's a turd. And gold plating ain't cheap.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
The fact that a new console game costs 100-110$ (my local currency converted to $) does not help them. I don't really buy new games anymore.
Isn't it obvious, it's not the marketing costs that are high, it's the development costs that are low. Title should read EA spends 3x less on development than marketing.
Poor developers, scraping together just in order to eat. Can't even afford to buy the console to play the games they develop.
Otherwise they wouldn't be -THE- largest game developer out there in North America. If you haven't heard of EA, you either never left Nintendo, or live without video games.
If they were doing things wrong, they wouldn't be doing so well.
In my eyes, its not that they should cut back from marketting, but spend more on developing! I'd be more inclined to jump into game development commercially if they got paid more decently.
w7 is just a repackaged version of Vista with minor tweaking. (ie not much development time to make.) The marketing on the other-hand has everyone praising it. Seems a bit too much free PR.
Take a look at the annual reports of some big drug companies and you'll find they spend more on marketing (we need to keep the prices high to support R&D...) than they do on actual R&D.
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
If you make a good game, they will come..
I remember the stories about Corn Flakes, as in less than 10% of the cost of a box of corn flakes was for the corn.
In regards to EA and their like, I wonder if its related to accounting similar to Hollywood accounting. Get in lots of subs to spread out expenses which only pad select people's paychecks
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Such a pity.
EA's games aren't that bad by any means, but imagine if they spent that money on real R&D and actually making awesome games.
I'm going to buy NHL10 not because of any ad I saw on the tv, news, or heard on radio, but because they put a simple producers video up and a game demo.
I'd question the need for a lot of marketing hype, specially since most consoles are well connected nowadays.
BTW, could they fire the marketing teams and maybe stop putting in-game ads in?
Does 2K Sports have a recent soccer or American football game? I couldn't find one on the site you linked.
In 2006, the average studio movie cost $65.8M to produce:
http://www.cinematical.com/2007/03/08/mpaa-in-2006-an-average-movie-cost-65-8m-to-produce/
In 2007, the average studio movie spent $36M on marketing:
http://articles.latimes.com/2009/apr/20/business/fi-ct-movies20?pg=1
Imagine if they spent that cash on development instead?
gamers don't need TV commercials.
Madden and other crap franchises are the bulk of the ad budget.
They're using their grammar skills there.
Is this the reason that new games cost $60 or more? Without the marketing costs, new games could cost a more reasonable $15-20. This would encourage people like me to buy new games rather than waiting to buy them used.
Perhaps the trouble is that there is nothing to keep marketing expenses in check. A large bag of store-brand, non-advertised charcoal might cost $15. Kingston brand charcoal might cost $20, with much of that extra cost due to advertising. If Kingston decided to spend another $40 per bag on advertising and sell their charcoal for $60, they'd sell almost nothing and go out of business. They would be crazy - but this sort of crazy marketing seems to be standard in the games industry.
Let's do the maths (Yes, there's IS an 's' in it)
makes $35 on a $60 video game
needs to sell 1.1 million copes to break even
new games have just six weeks to sell.
So you make $38.5m in order to break even for ONE game, and you do that in six weeks. But marketing costs "up to three times more than the development" so that would mean that, say, development *definitely* costs less than $9.6m and marketing, say, $28.8m roughly (if you were to assume they were the only expenses).
So after investing let's say $5m over several years in development, you make $38.5m with that in SIX WEEKS and you think that's *all* to do with the marketing (especially as it DIES within six weeks - good marketing would stop the game dying I would think, not provide a one-off boost purchase)? I would think it was more to do with being a good game. Can't remember the last time I picked up a game because of a review in a magazine or online. I play demos (no demo? Aw, shame... not buying it then), I view videos on Youtube, I buy things because they appear as a new item on Steam, or I spot them in the shops.
Gaming is a demand industry, hence the only one that really solved the "on-demand buying/playing" with things like Steam, etc., hence the high piracy, pre-release leaks, etc. People want the new games. I don't think the marketing has anything to do with this because games that don't even get advertised get leaked/stolen before the marketing really drives up. How much is valve spending on HL2:Ep3 marketing? It'll spend next to nothing, I'm sure.
If you were to scrap that $20m-ish on marketing and just, say, make it equal to game development, you could instantaneously half the price of the game. That would BE your marketing right there - you'd barely need to do anything else, you'd be cheaper than all your rivals but the same quality. Or, say, just scrap the marketing entirely, release it on Steam (so it gets a lot of exposure on pre-release download, demo, release, etc. with little-to-no effort. Then you'd be raking in a slightly reduced amount much much quicker and over a much longer term and probably still at a much-reduced price.
The indie-games are going to win over the big titles sooner or later because this is exactly how they work. If I do have £50 I want to spend on games, then I'd much rather get 500 hours of gameplay for the same price than 20. I can even get a mix of genres, a mix of play-types (long, high-investment, or short, casual games), a mix that ensures I get at least one good game, etc.
The sums don't add up - imaging convincing an investor: we want $38.5m, we intend to spend three-quarters of that on the marketing for a six-week window in which we'll claw back the $38.5 if it takes off, and then the game is dead after that. We'll be spending a tiny proportion on development of the game.
If it tells you nothing else, it tells you that games are ALL hype these days. Give me Crayon Physics any day - saw it on a Youtube vid (not even an official one), wanted it, played demo, wanted it more, bought it, played it, still replay it. Not once did I see any marketing for it except it's official website. Did the same for Left4Dead, believe it or not - played a free weekend on Steam having only ever heard the name and never seen it played - ended up playing it to death and buying it. Where did the marketing work there?
Stop faffing about, making FIVE blockbuster games for the same money by just paying the development side, release them on something like Steam whenever you feel they are ready, when you make you development budget back, start another game project. I bet you'd make a lot more, and a steadier and sustainable, income.
Q: Why are games so expensive?
A: Because it costs us that much to convince you you want to buy it.
Please help publicise swpat.org - the software patents wiki
As a consumer society, we've evolved to be more responsive to advertising/marketing than actually good products/services. That's why our society has become so (over)saturated with advertising. You may design the best product in the world, but if you don't market it correctly, and no one knows about, then it doesn't really exist. Though the internet has begun changing that through the proliferation of viral marketing—and I don't mean the marketing gimmicks created by hipster "new media" advertising agencies, but rather true word of mouth.
And while I don't have any idea about the cost of marketing versus production in the movie industry, I do have some idea of the figures for the music industry. You can record a professional quality album for as little as $6000 these days. In fact, if you're a DIY kinda person, you can do it for a lot less than that. Heck, even a lot of major label artists are opting to record outside of a professional recording studio, and instead just renting out a house or warehouse and setting up their recording equipment there (and you can actually get some pretty interesting effects this way just by trying out different speaker/mic placements throughout the building). Mastering an album may cost another $3000-4000, but this can be offset sometimes by hiring a producer who does the mastering. I won't include the cost of album design and artwork since that's very variable and could be considered part of marketing. So in total, you're looking at only about $9~10k to produce the album itself.
Now, with most indie labels, you'd hire a publicist to do the majority of the marketing for you (i.e. get your music onto radio stations, get magazine reviews, get magazine/radio interviews, etc.). You might also do in-house marketing, which mainly just involves retail relations, sending out promo CDs, perhaps calling some radio stations to promote your music, submitting one-sheets, paying for magazine ads (this can run pretty high, but is more a function of the size of the label and what you can afford), etc. If you've got distribution through one of the majors (i.e. through a label group like Megaforce) then you also have other marketing/promotion options available to you, like co-op audio booths, co-op ads, etc.
Those are the usual variables/options a mid-sized indie label typically has for promoting a new album. A publicist these days seems to cost about $3000-4000 or more per month per album. A ballpark figure for ad space might be around $3000-4000 a month for a mid-sized indie, though that usually is spread amongst multiple album. And the co-op promotion campaigns through major distributors might run as low as a couple hundred dollars each, and again depends on how much or how little you want to invest in it. Our label probably spends ~$2000 a month on the options offered by our distributor, but, again, these are very rough ball-park figures as each label has their our marketing strategies. The smaller your budget, the more efficiently you're forced to use your resources, and so you might rely primarily on in-house or free marketing (like posting torrents, posting youtube videos, myspace, etc.).
For some of the larger mid-level indies, I'd be willing to bet they spend much more on marketing than on actually producing the album. And for the majors, I have no doubt that they spend far more than 3x as much on marketing as for producing the music. Of course, this doesn't include the cost of the record contract, nor does it take into account touring support in aid of promoting an album.
All I got was a paragraph there. I take it the full article is only for dicknuts such as yourself.
And that was the last Terry Fox run I ever participated in.
Of course the film industry is worse. Much worse. When even seemingly successful films like the "Lord of the Rings" trilogy lose money due to Hollywood accounting practices, you know they must be overspending on something! Marketing. Yeah, that's it.
Perhaps that aspect of the entertainment industry is being brought into gaming? The clue would be if EA is heavily invested in advertising companies that are supposedly at arms length, but are little more than shells.
Seriously, if they'd stop to think about, they really should focus on giving players games that have lasting value and are re-playable.
I bough Half-Life ages ago and still haven't sold my copy, because it allows me to play Counter-Strike. Later I bought Half-Life 2 Counter-Strike Source etc, but I keep the original as it's got it's own merits.
This solves some major problems for the publisher: used games market and tight deadlines.
If you keep players occupied for an entire year, you can probably charge a bit more for such game...
Currently EA publishes a new sport title every year. I think they should just admit it and start selling yearly updates, becuase those title are really not that revolutionary - they just contain up-to date player names, stats, maybe some minor graphic tweaks.
No wonder that they have to spend so much on marketing, it would take a hell lot of an ad to convince me to buy fifa 09 if I had fifa 08 already (not that I have any)...
There have been quite a few reports from filmmakers over the years to the effect that around 50% of a movies budget is set aside for advertising. A movie reputed to cost $200m actually cost $100m, with the rest in marketing. Of course the half actually used in making the movie also has big chunks set aside like celeb fees and licensing of rights. Take away those fees, pay the cast and crew a decent wage and you could make the same thing for less than $50m.
With that type of money, it's hardly surprising investors want to see the best chance of making a return and profit from their money. The movie business is not about telling stories, creating art or any other fancy stuff.....it's about making money. They churn out mainstream bland sequels of tried and tested formulas knowing their marketing budget gets all the endorsements, quotes and interview slots done by sycophantic journalists to ensure the people have their predictable buttons pushed that get them through the cinema door having paid to see a rehash of something they've already seen a million times before.
Investors want to ensure the movie is made with clipboards, ensuring it ticks as many boxes as possible to maximize it's potential audience. Anything original, which is more niche is not even considered. The aim of the game is to pump out what they want to sell you, rather than sell you something you want to buy.
On the EA issue, I've long known they spend more in other areas than development, their sports games are terrible. A large chunk of the costs go into paying for the rights to use the NBA, FIFA etc names, stadia, player rosters, player likenesses etc that they have little left to spend improving the next version of the game beyond a few graphical polishing tweaks; the players facial hair looks a little more real now.....wow, how about improving the game itself? Not to mention the releasing of half-baked versions like "road to world cup" which only has the qualifying rounds, if you want to actually play in the world cup you have to buy ANOTHER version of the fucking game. They've long taken the piss out of their customers, knowing there's a HUGE number of kids who will put up with a pile of shit if they can see their favorite players names, likenesses etc coming up hen they score. EA are a factory for mainstream shit, there's little creation there, the "arts" part of their name seems like it should be investigated under from the "truth in advertising" perspective.
With football (soccer to the US) games, compare FIFA to Konami's Pro Evolution (formerly known as ISS). No rights to tournaments, players or stadia but the ability to edit team and player names. Everything was recognizable to the fans but under different names. Oh and the game itself was a million times more accurate to football. ISS gained the reputation of being the best by players themselves, so they don't need to spend much on marketing to get it selling. They created something people are desperate for. In short, they respect their customers, and fans.
SQL Programmer goes into a bar. He walks up to 2 tables and says "you 2 up for a threesome?" "No" they reply, "We're related."
Business management fail.
Good games will market themselves. You don't need to spend money on marketing when your name is EA, people are going to come to you to see what you have if they want a driving game, a basketball game, etc. If you make a cake for $1, spending $3 describing how great it is is stupid.
With my experience with the quality and stability of their games, this does not surprise me in the least. I used to work for a cyber cafe. EA games made up about 30% of our titles and 25% of the playtime, but 95% of crashes occurred while an EA game was being played. also many times patches for EA games broke them, A problem we rarely had with non EA titles.
All misspellings and grammatical errors in the above post are intentional and part of my artistic expression.
... then make anyone think your product is the best thing on universe using more marketing!
I know, is irrational, nonsense and stupid. But is how the CEOs thinks and works
Religion: The greatest weapon of mass destruction of all time
There are three sentences in the entire article. Sentence 2 reads: "Noting the success of the DS, PSP and iPhone, Hilleman slammed the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title."
If being able to read and comprehend three consecutive sentences makes one a dicknut, then I accept the title with pride. What, pray tell, is your epithet to describe someone who cannot? ;)
No, the development vs. marketing cost was not the main thrust of the article, but it's an interesting point. I would have preferred to see an article that actually talked about it in more detail, and possibly contained more than a one-liner from a badly "[source needed]" post on a gamer board, but it is still an interesting point.
"This post contains words, known to the State of California to cause thought. Wash brain thoroughly after reading."
3× development costs is pretty well comparable to movies. Sounds pretty reasonable for any mass-market item; those PC vs Mac ads, for example, don't come cheap.
There's a whole industry of advertisers & marketeers with families to feed who don't want to have to go and get real jobs that actually contribute something to society. So keep this on the down low.
You can usually spot them if you mention a cool new game and the first words out of their mouth ask how the graphics are or comment on how bad they looked in a youtube video. I know people who _despite reading terrible reviews_ will acquire games hoping the graphics make up for bad gameplay. I'm not certain if that is the majority market segment, but it's probably pretty high up there and it makes sense to market heavily to them.
The majority of this marketing isn't meant for the average gaming slashdotter who still plays 10 year old games just because they were fun as hell.
Now, I'd say that I've never heard of the stuff, and that would be true if it were not for word of mouth. I've never seen a Nutella ad and I usually can't keep myself from buying the "crack" every time I go to the store. A good product does not need extensive advertising.
This can be expanded into gaming world as well. Turbine for instance has a game called Dungeons and Dragons Online. Atari owns the publishing rights and advertising rights to the game and Turbine owns the development and maintaining (money making) rights. Incidentally Atari would love to see DDO die so they could spin up their own MMO based off of the Dungeons and Dragons literature. Because of this Atari either does not or severely under advertises for DDO which has been a pretty popular game despite competition of World of Warcraft(Blizzard) and Lord of the Rings Online(Turbine). DDO has done pretty well and even has had recent member growth despite the lack of advertising.
Solid products will maintain or slowly grow their market without advertising. Solid products with advertising can grow their markets more quickly. Crap products will grow their market on behalf of marketing until their market finds a better competing product with the same level of marketing.
I hear your army does something like this too....sucks up cosmic amounts of cash, while producing nearly nothing.
And this is news how? So far in any production and manufacturing scenarios development is a minor cost (with Pharma and Biotech being exceptions, thanks FDA for securing yourself a minimum of 500 million in trial costs...)
The VAST MAJORITY of product development costs are lower then their lifetime manufacturing costs, administration, advertising, litigation, and maintenance. Hell most companies I would wager spend more on their legal department then R&D these days. I know 3 folks who, as a full time job, do nothing but search the patent stack to make sure no 'pending' projects are "at risk". (Offical job titles are "Patent Risk Analysts" apparently)
Why is this surprising? Remember that the web sites fall under advertising. Yeah Blizzard.com, Warcraft.com, EA.com, etc all fall under advertising expenses. So would the billable hours to the art department. "Hey we need to update the warcraft site for the new expansion. We have 1200 hours of art dept work in the project plan. What cost center? Advertising Dept, got it. 1200 hours to AVT0001 at $$$ and since we use the same DB as the 2112 and Bnet projects we'll need at least 40 hours of admin work to those cost centers..."
Here are some things that fall under advertising that you may forget:
Expo booths and event sponsorship (PAX, GDC, etc.)
Team Sponsorships (NASCAR is a great example)
Business Cards
Swag (Pens, Pencils, jackets, Post-It like stuff)
Print Ads
Online Ads
Radio Ads
Event Sponsorship (plays, etc.)
Web Sites
Now just stop and think about that last one... Yeah let it stew for a minute...
Yeah, Holy Crap no kidding for costs there. Download that newest demo... How much bandwidth, servers, etc.
Last I heard, as an example, many MMOs per shard hardware requirements are dwarfed by their own web sites!
The fact this comes as a suprise and the comments that followed really worry me that kids might not have a clue how business works.
The value of the dollar is lost, the fundamental understanding of basic business principles is endangered.
-=[ Who Is John Galt? ]=-
Wow, that's fairly amero-centric. The USA is the only country in the 1st-world that allows for drug companies to undertake marketing directly to the consumer.
The USA has the highest (%age) of prescription drug usage in the modern world.
That's an odd correlation, but not particularly surprising.
Quartz Extreme and Core Image. Are there any other real reasons to spend all that money on generic hardware?
"According to Electronic Arts officer Rich Hilleman, 'the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title.'"
-----WTF? You mean to say, the price of MARKETING games has increased, right? Production is related to development, not marketing.
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....
I knew the auto industry was in trouble when they started spending three-x on marketing as engineering. These things have value because the DO something cool. NOT because I'm told to think they are cool.
Development is a hole you dump money into and it converts money into DVDs.
Marketing is what takes those DVDs and converts them back into money.
If you double your development budget you can't get the DVDs made any faster, you could maybe have a second hole producing a different stack of DVDs.
Increasing the Marketing budget however is a very efficient algorithm and will result in much greater revenues up until you hit a point of diminishing returns. EA understands this and thats why the marketing is only 3x the development, its the point where it is most efficient and generates the best possible profits. The costs do vary from company to company but you will usually find marketing is normally a lot more than development.
A typical tech company product budget looks like this:
- 45%-55% - cost of sales. This includes distributor and wholesaler margins if any; sales force, advertising, trade & public relations, market research and marketing. 45% is the goal, 55% is the point at which CEOs start throwing things.
- 15%-25% profit (we hope)
that leaves 20%-30% for EVERYTHING else - operations, management, engineering, facilities (buildings, servers, networks and such), manufacturing, and customer support. Engineering is generally in the 2% to 5% range. For software, more can be spent on engineering since the cost of manufacturing is essentially zero - but still under 10%, probably under 5%.
Consumer products often have a higher cost of marketing due to the need for all those fancy TV commercials and so forth.
Products are ALWAYS priced according to what the market will bear - what do we price this at in order to sell X number of units?
Where I used to work, the price model was always done first. Then, if the product could not be manufactured for less than 20% of retail, they didn't do the product. This was a very well known engineering-oriented company in the test and measurement field with many products at the bleeding edge.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
The Internet has made it so that regular people can reach an audience of millions, and as such you can have your customers do the marketing for you. I'm not saying this works in all cases or that it is the only way to go, but you can have a great deal of success with little marketing on your part. You sell something that people really like, they do the rest.
As an example in the games industry, take World of Goo. It is an indy game made by a couple of friends. They didn't have any budget to market the thing because they did it in their free time, self financed, and self published. However, because it was a quality product it attracted a great deal of critical attention, and then word of mouth quickly spread the news.
There are companies that run their business a lot like this. Two examples I know of are SVSound and Emotiva Audio. Both do spend a bit on marketing in terms of some ads on audio websites and going to shows like AES, but that's it. No TV spots, no direct mail, no massive banner campaign. Almost all of their sales come from either customer referrals, or people doing web searches (which often comes across customer referrals). Basically they make a good product for a good price that people like. That, to an extremely large extent, "sells itself."
I would suspect the games market is similar to generic pharma. Lots of products, all very similar (at least until you rip the wrapper off), all totally dependent on good reviews from tame reviewers (who have to be kept tame - at a high price), where real-estate in gamer magazines, floorspace in shops and banner ads on the 'net are the primary ways of getting your stuff sold, in preference to the other guy's.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Not funny, true. Someone should have a word with the person who modded that "funny". Maybe when they stop to think, they'll realise that.Hopwfully the next modder will change it to insightful.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
EA pays for their exclusive contracts with the NFL. Its easier to spend money for that exclusive contract than to spend on development and have to deal with competition.
Everyone wishing that the money were spent on development instead of marketing is, unfortunately, living in an ideal fantasy world.
People are dumb. They follow trends, soak up advertisements, and generally do what marketers tell them to do. You personally might be immune, but remember that just by reading Slashdot (and therefore being somewhat tech-savvy) you have already self-selected against most of the population.
In modern culture, quality does not correlate with success. (Arguably, in entertainment, it never has... consider ticket sales for generic romantic comedies with famous actors vs thought-provoking art-house films.) Quantity is much stronger than quality. Exposure is all that matters.
Nobody bothers to do independent research anymore; Consumer Reports has been dropped in favor of Google search, and whoever has the most hits wins.
Welcome to the present day.
For a typical Hollywood movie, the amount spent on marketing is about equal to the production cost of the movie, i.e. 1:1, rather than the 3:1 cited for console games.
You are right that the advertising cost is equal to the production cost, but the movie's budget is its production cost. The film distributor (the big company) pays the for advertising itself, outside of the budget (its not the director's job to put advertisements in newspapers, so why budget him the money to do it?). So when a movie is reported to have cost $200 million, it cost $200 million to make, and about $200 million more was spent on marketing.
Back when I bought games for the Commodore 64 the EA games where always a great disappointment.... the most flashy boxes, the most impressive screen shots on the boxes.... Then you bought the game and the great 'screen shot' was only the opening screen which took forever to load, the game play sucked and graphics where really bad.
There was only a couple of what someone might call OK games.... But do to the load times of useless flashy graphics we opted for the pirated version that jumped past the opening flashy screens. Ah pirated games on the Commodore 64 - no internet or P2P service and we could still amass 200+ pirated games. Now in the age of the internet (and P2P) I actually BUY the games I want to play.
The more things change the more they stay the same.
This is news?
And this has been another installament of Captain Obvious!
No the dicknut remark was just a response to the usual slashdot commenter policy of being as condescending as possible with all responses.
Wink wink wink.
Eh sparky? Wink wink.
And that was the last Terry Fox run I ever participated in.
EA's games could cost 25% of their actual price, if she made no advertisements. Wouldn't much more people be interested in giving out just a few bucks (a fraction of the cost today) for high quality games? I mean, if they at least sold the same amount of copies, they would have _more_ profit! How much they rely on distracte people reading outdoors then game news in newspapers/magazines?
Having spent some time in Hollywood, I'll answer the poster's initial question. The general rule on movies is actually 1:1, production vs. marketing. Thus a studio that spends $30M producing a movie is expected to spend about another $30M on promotion.
This of course doesn't take into account the famous "Hollywood math" in which the cost of making a film can essentially be whatever the studio says it is. Essentially, any cost a production company incurs during the time of a film's production can be assigned to the budget of a film. This is done to make the film appear to have lost money or broken even no matter what its box office, DVD and television gross (Forrest Gump being the most famously ridiculous example of a "failure").
I would expect Hollywood math to have filtered in some form into the games industry by now, but how I can't imagine. Are annual software upgrades and new video cards charged to the budget of an individual game, or considered an unavoidable infrastructure cost? If a game studio purchases a setup to do basic mocap in-house, rather than having to contract out, is that cost eaten by the studio, assigned to the current game's budget, or spread among the twelve games the system is used on during its lifetime?
Accounting is a wooly and cutthroat art.
The claim in the linked article does not seem to match the claim in the summary.
Ah, I see. I'll keep that in mind. :)
"This post contains words, known to the State of California to cause thought. Wash brain thoroughly after reading."
Insert Microsoft for EA and this still is true. Seems to have worked for them.
People mentioned Big Pharma, again no surprise.
Actually take any retail branded item, and Marketing is probably bigger than product costs by a fair margin.
I love you.
And that was the last Terry Fox run I ever participated in.
Oh yeah, let's all boycott drug companies that make profit. What exactly is wrong with making profit?
Boil it down to the basics and the process works very well for everyone involved:
1) Drug company develops or buys the rights to a drug
2) Patients live longer and more comfortable lives thanks to the drugs
3) Drug company profits
Everyone wins. Hell, you can even invest in a drug company and share their profits.
And the fact that the USA has a fucked up pricing system for drugs is a discussion you should be having with your elected representative, not another Slashdotter.
The same rule applies for Film but they decide how much investment is worth by doing a few "research" studies where they measure how likely you are to tell your friends, how excited you are before the movie to watch it and if you like it or not along with few other parameters. If those factors are positive then they put the major money and go for a full on marketing, otherwise they do invest less as they know the life cycle on the theaters will be really short.
I trust "word of mouth" only. Odds are any review you read is bought and paid for. Any forum posters singing the praises of a title are probably made by paid shills who are astroturfing. Unless a friend or someone I know recommends a game to me, I don't believe anything I read. This goes for gaming forums and magazines, too. Ginning up a viral buzz is more important than putting together a quality game these days, and TFA basically proves the point.
As a former game industry insider, I can safely say that EA is a dark and cruel factory of nightmares. Their employees are overworked and underslept like slaves or animals.
So, perhaps the more alarming thing about this shouldn't be how much they're spending on marketing but how little they're paying their development teams. The entertainment industry takeover of game studios has truly been a travesty in terms of games as a creative medium.
One story I'd heard was that EA essentially has many many developers who are so undermanaged and overworked that their products always come out totally broken internally, where they have a mere handful of highly skilled developers who just get flown from studio to studio pulling people out of crises to make deadlines. Of course, an EA employee might refute me on this- so I will say it's just hear-say.
Disclaimer: I worked for a competing company, but knew many people who had left EA.
And I would not believe it, but judging from my last 3 EA purchases yeah I believe it. EA has really lowered their standards.
Before you Madden fans get up in arms out there, their sports games seem to be what they mostly bank on these days. As I am not into sports games these are not the titles I purchase. Those that I do, I've had nothing but heartache and a feeling like I'd been ripped off. Last EA title purchased, Mirror's Edge.
I see a lot of people suggesting that marketing is necessary for the success of not only the too-crappy-to-succeed-on-their-own games but also the truly quality titles. I disagree, based upon personal experience (which, really, means little, unless many of you agree with me): I have only played one game, ever, based upon marketing. My standard procedure for finding a game goes something like this: 1) Notice I have more free time for some reason OR finish a game 2) Go to a variety of video game review web sites - adblock is enabled. I see text and occationally a picture or two. I avert my eyes from the ads (sad, but true) out of principle. 3) Find a a game that meets my style and is affordable. 4) Will my hardware run it? Check! 5) Does it have DRM that has caused problems for other people? If so, skip or thoroughly research it. 6) Play. I have only once responded to an ad for a game. I had read quite a bit about the game by the time I saw the ad, but it did push me over the edge - because it offered a free trial. I think the real reason we see so much advertising expenditures has to do with how the market has come to be what it is. We used to have many smaller game producers - you would often hear of a game developed by some studio you've never heard of. Now, you might still hear about new studios, but they're more likely than not being published by EA (at least, in the PC world). Numerous companies have been bought up - leaving voids which could easily be filled by new, innovative startups ... if only there wasn't so much advertising money going out of the big companies. By advertising so heavily, these large companies prevent new competition from developing - who wants to spend 2 profitless years developing a game if it's a complete hit or miss? A truly good game won't get ignored, trust me - there's too much of a gaming culture. A mediocre game, however, that nevertheless deserves some fair profit, will have a much harder time if it's competing against similarly mediocre games ... with multi-million dollar advertising campaigns backing them. And if your startup has just created a mediocre game, it's likely that you cut some corners to get things done. You don't have millions to spend in the hopes that your advertising campaign will compete.
If my interpretation is correct, the purpose and effect of these massive advertising budgets is not, as popular opinion holds, to allow them to create average but still successful games so much as it is to stifle competition. I'm sure EA would love for every game to be a hit, and they'd even be willing to pay for it. After all, they must surely know that a truly good game will rake in the cash even if the marketing isn't spectacular, so they would be willing to spend, say, 1/3 of their marketing money on development - if it would help. Which it won't. You can't pay a developer more and get more inspiration out of him/her (who am I kidding? Out of him). You can't hire more developers and expect a more polished game - unless you're hiring the developers to bug test, or unless you were understaffed to begin with). You can, however, guarantee that your mediocre game will be the one to rake in a modest, average profit, and not your competitors - if they don't advertise.
Oh?
Pray tell, how many games released in 2008 can you name off the top of your head? Are you pretty sure you included all the good ones? What about all the so-so ones?
Quality doesn't matter if nobody knows the game existed.
Freedom isn't free; its price is the well-being of others.
Apologies for the double reply, but I forgot this gem in your post:
How about access to medication? Are you gonna spit into some breadcrumbs and add some spider webs next time you need penicillin?
Your argument is about as intelligent as proclaiming that we should all simultaneously stop paying taxes. The government can't do anything, LOL! Wrong. They can stop picking up your garbage, maintaining the roads you drive on and providing any other service. You give a little, you get a little - same with the drug companies.
I don't find this all that surprising. Being someone who has played a variety of games, from many different companies I can say that EA has been (pretty much since the beginning) my least favorite gaming company.
I am going to use Tiger Woods 09(xbox 360) as my prime example of why I dislike EA. The game itself, is fun, plays well has nice graphics easy to use controls and runs well. However with that said, I regret buying it.
Now you are asking yourself "But if it's so great, why would you regret buying it?" Well it's simply, despite how much I enjoyed the game, the biggest, most annoying and rampant bug I've seen occurs when you have multiple users playing on the same system. The profiles and golfers get confused, and intertwined. I had my golfer being saved to another persons profile and another profile was buying items for their golfer, and it was being applied to mine.
This also applied to stats, awards, scores. It was just a mess, and it wasn't a one time thing. Every time I've played that game with more than one person this happened. It was such a blatant problem.
EA's solution? Buy Tiger Woods 2010, which for all I know the problem still exists. Oh I should say I had a similar, but less drastic problem with Madden 09 as well.
I've had account problems with Battlefield 2. They killed the Need for Speed series a long time ago (in my opinion anyway)
In either case, they don't strike me as a company that actually bug fixes there products very much, although I hear there is a massive patch coming to Battlefield 2, which I find quite shocking.
Remember that EA does not Dev alot of titles mostly they publish other peoples titles, so on those titles they only spend money on advertising....
---In a time of Chimpanzees I was a Monkey.
Go to the nearest church and advertise a game involving dead fetuses. Word will spread like wild fire and your marketing budget is next to nothing.
Disgustingly, this is also true of big pharmaceuticals. They spend close to 2:1 marketing to research. Given that marketing cures is not something that you need to do, a sick person will come looking for it, one has to wonder why they need to spend such massive (we're talking billions here) amounts of money on, and why.
If you had to run a pharmaceutical company, maybe you'd come to the same conclusions and perform the same basic things, given the environment they work in. It's easy for you to criticize, but sitting there and abstractly moralizing is a luxury that the people who put effective drugs in your hands don't have.
They also spend enormous amounts of their marketing funds on lobbying. Getting your drug listed on the PBS is essentially a free ride on taxpayers, so pharma pays huge amounts of money inviting prominent doctors and other members of the medico-political fraternity to lavish "conferences" in exotic locations, showering them with luxury after luxury. I've been to a few of these events, and the thinly veiled palm greasing in such a socially crucial industry is sickening.
Old axiom- when politicians control buying and selling, the first things bought and sold are politicians. Any increased oversight necessitates that those who are being overseen influence the process, in order to conduct any kind of business. Think of that next time you demand the government 'do something.'
Alcohol, Tobacco and Firearms should be the name of a store, not a government agency.
I majored in Marketing, with a minor in Journalism, so I am a bit familiar with the insane sums of money that companies will spend to "polish a turd" as it were. Although I don't work with marketing professionally (pushing numbers wasn't my thing, and to work as a creative in the field really requires a Graphic Design or English/Communications degree - thanks a bunch to my professors for letting me in on that little secret), I was hoping some fellow /.'ers might.
This ties back to an article earlier today, about in-game advertising and how much money developers get paid to force advertisements on consumers (http://games.slashdot.org/article.pl?sid=09/08/30/1618218), many times through underhanded tactics such as longer loading screens filled with adverts. Call it naive, but wouldn't it simply be a case of robbing Peter to pay Paul on something like this?
Development costs time more than any other resource. There would be infinite time for development if money were no factor (Duke Nukem Forever, well, bad example, how about Diablo III) or if you didn't have to release a game within its commonly expected demand window (NHL, Madden). Wouldn't it just be easier to take additional income made from advertisers, and simply push that money into the marketing cycle for the game itself? I would think that by the time the suits up in the office at any major gaming house go looking for in-game advertising sponsors, the game is 80-90% complete. On that thought, they aren't going to take the profit and put it back into development on what may well be a sub-par game, thereby delaying its release (especially if its something that they know is already terrible). Instead, its easier to fool Joe Public by bombarding them with commercials on every major network, buying magazine and internet ad space, retailer product placement preference, etc. GameSpot is in bed with everyone on things like this.
It seems like a vicious cycle, taking money from advertisers for annoying in-game ads, then using it to punish me with a Fight Night Round 4 commercial every 15 minutes on any given network, just to have me buy the game and get punished with more ads. Many of the stories lately point to gaming being built on an economy of trading ad time, no longer on installed console units or game sales. Anyone here have any familiarity with how the marketing practice works at an actual publisher? Its a sad state if this is what gaming has actually become. Id still take something like the Might and Magic series, which short of an ad or two in a handful of industry mags became popular via word of mouth, over terribly marketing shovel-ware bullshit any day of the week. Wow, that turned into a rant. My fault, just got back from the dentist, and the office prior to that.
--- This post sponsored by Batman: Arkham Asylum, featuring the new "FreeFlow Combat System" for ultimate control!
Batman has huge appeal, cost a fortune to make. If you just put it on shelves, only a few people will walk by and pick it up.
The problem is that, like most things, you need a good balance. If you spend huge amounts of marketing and very little on development then the chances are that someone will walk by, pick up the game, hate it and tell all their friends not to buy it thus undoing some of your marketing and harming your reputation. Then for your next game you spend even more money on marketing telling people that no, this time the game really is good and so the circle repeats until you spiral into bankruptcy.
If you are spending more to market a game than to produce it in this age of rapid, personal communication then I cannot help but think you are doing it wrong. If you make a good game, provide a reasonable level of marketing to get people aware of it then you can afford to let word of mouth/facebook/rblogs/... help do some of the rest. You will also grow a reputation and may be able to get away with less marketing in the future.
Imaging (x-ray, CAT & PET-scanners), Intensive Care & Surgical monitoring, Surgical robots & Remote Visualizing, drugs, and on and on.
Financing these new toys is a big driver of rising healthcare costs as expensive capital equipment is usually leased or purchased w/long-term financing. Like buying your house, the medical costs of using other people's money (mortgage) are usually equal to initial cost of the device.
Interestingly, compensation for supervising MDs & administrators tends to rise with device costs whereas operator salaries do not.
I don't know that I would call Madden a crap franchise. I have not purchased a Madden game since Madden 99 or Madden 2000 and it was pretty darn fun to play. I know that some version since then have been a little bit broken by player statistics (I think the year Michael Vick was on the cover he was unstoppable) but most people I know that do play the newer versions think they are great. They certainly sell enough copies of it.
The problem with the ad budget here is (I'd imagine) the cost of advertising during NFL games. Super Bowl Ads are of course insanely expensive, but I am not sure about regular games. What they get in return is some pretty awesome targeted marketing. Again, no stats, but I'd have to guess that people who would be interested in playing a football video game are the same people who watch football on TV. Not to mention that most people watching are a sporting event will be watching it live which means that the ads will acually be seen.
I worked for EA Redwood Shores for over 2.5 years. It was a freaking mill. Work the people to death on games. The Godfather game (which was the last one I worked on), ended up with over 200 people on the project. 200 people to make what turned out to be a less-than-exciting game. The tech used to make the game was constantly changing. There were battles in the studio as to which toolsets should be used. Major decisions in level design (like scale of the assets) were still shifting even as the production deadlines loomed. Not that they cared. Six and seven day weeks became the norm. And much of that is uncompensated overtime (at least it was until they got dragged into court).
Which makes the marketing numbers even scarier. Their game productions are totally inefficient, littered with excesses and poor management, yet they still spend 3 times as much on marketing. Turd polishing really. Honestly, like many people have suggested, put the money into creating better development processes, free the game developers from the stupid marketing constraints put on them (so many times we made changes just to serve marketing). Let people focus on making games and they might surprise you and make a game people will actually want without being brain-drained into believing it is something they want.
I went back to working on visual effects since that struck me as a far saner industry.... :)
Maybe if they put out more titles that didn't crash before you can win the game, they wouldn't have to spend so much in marketing. They're at 0% on the games I've bought for the PSP. And they'll stay at 0% because I'm just not going to ever trust them again. It's a pity too. Tiger Woods for the PSP is a lovely game, right up until the point it hard crashes.
But maybe they can hire Jerry Seinfeld to make up for the lost revenue ...
The company that is best known for making the same games every damned year.