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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?
Fred Brooks put it best in 'The Mythical Man Month:'
"...when schedule slippage is recognized, the natural (and traditional) response is to add manpower. Like dousing a fire with gasoline, this makes matters worse, much worse. More fire requires more gasoline, and thus begins a regenerative cycle which ends in disaster."
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If I remember correctly, this is also the source of the pregnancy analogy. Good book.
EA has been closing up shops left and right, just like most other large publishers (though really there aren't many large publishers these days, it's basically EA and Blizzard/Activision for PC games).
I think the main issue is that EA specifically, and the industry in general, has spent a lot of time in the last decade complaining about the rising costs of producing games, especially in the console and PC realms, yet EA is willing to spend 3x their development budget on marketing, the cost of which is pretty well within their control.
Of course, EA is also one of the companies that does pretty well controlling their development costs for their biggest selling games. They have a very limited time frame for development of their sports titles, and they do a fair job of deciding what improvements they can make year-to-year to still meet the time constraints and still keep most of their user base happy. They also figured out that it was worth more money to them to buy exclusive contracts with the leagues and player unions than to attempt to continue competing with other publishers and developers to make a better game in those time constraints.
-PainKilleR-[CE]
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.
Well, after having spent hours with many pharma reps, the answer seems to be that they promote their brands over generics. Despite the fact that a geneic is chemically identical to a branded drug (once it has come out of its 6 year patent period anyone can copy it), they spend money convincing doctors to keep prescribing their several multiples more expensive drug anyway. Here in Australia, that price is neither paid for by the doctor as the patient gets the script, and the government subsidizes a huge amount of drugs costs under the PBS scheme. So the ridiculous markup ends up coming out of the taxpayers' pockets. Big pharma is marketing their right to collect from general taxes.
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.
Marketing is an industry that needs regulation. I don't know how, but there needs to be some way to prevent marketing from deliberately destroying the ability of people to make informed decisions. Yes, yes, caveat emptor and all that. In the real world, not everyone can spend a year researching every decision exhaustively; we need to make decisions with incomplete information, and the marketing industry is designed to ensure that the first information that comes to hand is as misleading as they can get away with.
And holy cow, what a rant. I originally intended to whine about EA's marketing spending as being the reason we don't get any groundbreaking new games like Syndicate or XCom any more.
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