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Game Industry Fights Rising Development Costs

An anonymous reader writes "Video game development budgets have been rising for years, and the recent launch of a new generation of consoles has only made it worse. Developers of AAA titles are now fighting to keep costs manageable while providing the technological advances gamers have come to expect. Just a few years ago, budgets ranging above $100 million were considered absurd, but now Activision is committing $500 million to a new IP from the studio that created Halo. Alan Roberts, technical director for Playground Games, says development teams keep expanding: 'Our in-house development team is roughly 20 per cent bigger than it was on last-gen, but we're doing even more with outsourcers this time in order to create content to the level of detail required by new generation games.' He adds that one way studios are trying to defray costs is to put more effort into building great tools for content creators."

22 of 111 comments (clear)

  1. Yay! by pushing-robot · · Score: 4, Funny

    Now they'll finally have enough money to hire decent writers!

    --
    How can I believe you when you tell me what I don't want to hear?
    1. Re:Yay! by Anubis+IV · · Score: 2

      "Thank you Mario, but our Princess is in another castle" is as much story as I need...sometimes not even that much (e.g. PS3's Journey, of which the entirety of all text and dialog that appears in the game can be quoted with the single word, "Journey"). Anything more may be nice, but is rarely necessary.

  2. Procedural generation anyone? by Lonewolf666 · · Score: 5, Insightful

    It seems a lot of the budgets goes into more shiny graphics, not necessarily into more sophisticated game play. Perhaps it is time to try something new, such as procedural generation of more game assets.

    A good example would be Limit Theory, a space game currently in development where only the user interface is designed the traditional way. Ship models and asteroids are created by procedural generation. Here is the latest development update: https://www.youtube.com/watch?v=A2albJYS-wI

    Still looks a bit blocky, but considering the game had a $50.000 dollar goal on Kickstarter and the developer feels more than comfortable with the $187,865 that were pledged, the value for money is going to be impressive.

    A slightly larger team with a budget of perhaps a few million should be able to do amazing things with that approach. Assuming the team members are as talented as Josh Parnell ;-)

    --
    C - the footgun of programming languages
    1. Re:Procedural generation anyone? by exomondo · · Score: 3, Insightful

      It seems a lot of the budgets goes into more shiny graphics, not necessarily into more sophisticated game play.

      I don't know about "shiny" but when you can include more detail and larger levels then obviously that is far more taxing on artists and developers. Then if you give artists the freedom to specify the sort of highend effects that new generations of hardware are capable of you need extra development resources to make that happen. Increasing the power of the hardware is only one part of having next-gen titles, figuring out how to apply that power to bring game concepts to reality is another. Sure you could employ people to work at getting character animation right or you could hire a motion capture studio and actors to get it close to perfect and if you have the budget for that sort of thing then why not?

      The high end of those budgets does include marketing as well - not just development - and I would say most of that is the marketing budget given the sort of campaigns that are being run to promote AAA titles these days.

    2. Re:Procedural generation anyone? by gstoddart · · Score: 2

      Obviously to make the most shiny game make the most money or they wouldn't be trying.

      I would qualify that and say that might make the most money.

      But AAA titles have flopped, just like big budget Hollywood movies.

      It is, however, entirely possible to still produce crap with a large budget, just like big budget Hollywood movies.

      Sometimes, the people in control have no idea of what really makes a good product, they just take a checklist of everything from every other successful title and cram it in.

      I think $500 million to develop a game either means you really are sure you're going to make huge amounts of money, or you've really jumped the shark and made Waterworld. ;-)

      --
      Lost at C:>. Found at C.
  3. What advances? by neghvar1 · · Score: 3

    Superior graphics, AI, and audio. Don't make a kick-ass game. IMO, the greatest video game of all time is Star Control 2 (1993)

    1. Re:What advances? by mujadaddy · · Score: 3, Interesting

      IMO, the greatest video game of all time is Star Control 2 (1993)

      Great nominee but I'd go with Mail-Order Monsters (1985), personally.

      --
      Populus vult decipi, ergo decipiatur...
      "Force shits upon Reason's back." - Poor Richard's Almanac
  4. Another example I forgot by Lonewolf666 · · Score: 3, Interesting

    I-Novae studios are doing something similar, AFAIK with a bit more budget and limited to terrain generation:
    https://www.inovaestudios.com/Technology
    This may be a better example of what a large game studio might go for. Overall a bit more conventional than Limit Theory, and needing more manpower, but still a big win in not having to model the terrain by hand.

    --
    C - the footgun of programming languages
  5. Re:Number includes marketing budget by Necreia · · Score: 5, Insightful

    Ridiculous summary with regards to the $500 million dollar figure. It includes the development AND MARKETING budgets!

    Basically this. Destiny spent an estimate $360 million in Marketing and $140 million in Development, which is over a 2:1 ratio. CoD2:Modern Warfare 2 has a respective $150:$50 million or 3:1 split (Source). When game companies are spending a small relative fraction on the actual development, there's a problem.

  6. Re:virtual worlds by Charliemopps · · Score: 2

    real money.

    No its not.

  7. Minecraft by steelfood · · Score: 4, Insightful

    The best part about Minecraft's success is that in this period of neverending one-upmanship of glitz and glam in video games, Notch delivers a great game on practically gameplay alone.

    Of course, there are plenty of other indie successes out there (Torchlight I/II), but Minecraft's target demographics is archetypal for gamers while it is the third most successful game in the world (the top two target a wider range of demographics).

    --
    "If a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be."
  8. Re:Number includes marketing budget by jeffmflanagan · · Score: 2

    >When game companies are spending a small relative fraction on the actual development, there's a problem.

    Not necessarily. They could make the greatest game ever, and if people have not heard of it, they'll go broke.

    With games as large, complex, and art-heavy as they are today, you need to reach a huge audience at $50-$60 a game.

  9. Woe be to self-inflicted wounds, by Anonymous Coward · · Score: 3, Interesting

    I have worked in the game industry since the late 90's. This is a smokescreen. It is, internally, a well-understood principle that your games needs a minimum of $70k today for marketing *alone*.
    That does not include development at any level.
    Beyond that, I am confident in saying that *at least* 50% of actual development costs are wasted due to poor management, marketing-driven-design, and a general lack of focus.
    When the game industry decided to raise the retail cost of their games to $60, (with the reason of increased development costs) at that time it was already a sham.
    Now that this article has come out on their struggles against the costs of development, I want to make one thing clear to everyone who has the chance to read this:
    1) When a development studio goes out of business due to lack of funds, it is, every time, due to poor management and internal irresponsibility with funding.
    2) The claim of rising development costs is nothing more than greedy stake-holders crying for more profit.
    3) It does not cost that much to develop games today, as aside from marketing/advertising, it costs less than a million dollars to develop even the most technically challenging project today.

    I had a lot more to say, but I'm too angry now. And that I won't post non-anonymously, I can't really provide anything more than this comment and my anger.

  10. Re:The More They Spend The Less I Want by houstonbofh · · Score: 2

    Right. Cause they spend $400million on DRM and $100 million on everything else. Uh huh. Sure.

    You should really buy my game! It is amazing! (Oh, and I have to kick you in the nuts every time you boot it...)

    Could be why they need a 3:1 marketing budget.

  11. Re:Are they real development costs? by houstonbofh · · Score: 2

    Or just some financial accounting trick/fraud to lessen or completely avoid taxes through some "outsourcing" tax haven parent company with "very expensive services" like many other multinational companies love to do.

    Sure they are! Coming up with DRM that lasts a full day before getting cracked is expensive!

  12. Good games give players interesting choices by jayveekay · · Score: 3, Insightful

    Games are about interactive gameplay, not hi-def graphics.
    Good games challenge the player with interesting choices, and do not attempt to cover up a void of interesting choices with reams of meaningless dialog in very pretty non-interactive cutscenes and the like.

  13. Re:Number includes marketing budget by mythosaz · · Score: 2
  14. Re:Voice acting... ugh by Bite+The+Pillow · · Score: 2

    Your friends who are gamers essentially form a self-selected group where your opinions either are similar, or become similar via conversations about those opinions.

    I don't need famous people, but it does need to be on the far side of believable. If you sound like you don't care about your quest, I'm likely to just chop you to bits and consider I'm doing you a favor.

    Also, may I suggest that if you repeatedly find "cliched, overused, derivative crap" you probably need to play fewer games. I say this because buying a game counts as a vote for it (sold X copies), and your opinion doesn't matter. Buying used, or renting then only buying the decent ones will move games toward what's popular, not towards what's marketed.

    On that subject, sequels and expansions are very popular because people want more of exactly this experience, with some novelty added. Very frequently, the sequel is panned because it changes something too much - gameplay, atmosphere, environment. So almost the same is good, except when it's not, and very different is good, except when it is too foreign. If you had a business, which way would you go?

    The obvious answer is the indie studios who don't even have a business yet. Next obvious is the tiny studios. Not obvious at all is try before you buy, and don't reward the failures with money.

  15. They think money makes a game good... by Redbehrend · · Score: 2

    This is how the mega companies think and why they ruin games.... Let's throw a ton of money at people and give them a short deadline... whatever they don't finish well make it add on packs lol. This is the reason indie games are on the rise, you think they would learn to save money and make a good game. It doesn't take 500mil to make a good game.. The more they spend the more they nickel and dime us to death...

  16. Spend on the game, not on spin by Camael · · Score: 3, Insightful

    It is however a strong indication of misplacement of priorities.

    If you overspend on great marketing but produce a turd of a game, it will still fail. Case in point- E.T. the Extra-Terrestrial (video game).

    OTOH if you produce a great game but spend minimally on marketing, it can still succeed through word of mouth, etc. Case in point- Minecraft.

    On January 12, 2011, Minecraft passed 1 million purchases, less than a month after entering its beta phase. At the same time, the game had no publisher backing and has never been commercially advertised except through word of mouth, and various unpaid references in popular media such as the Penny Arcade webcomic.

    I rather doubt that any game falling into the category of "greatest game ever" or even a great game will fail without paid marketing so long as its accessible to players. Gamers tend to be quite vocal in sharing about games they're in love with.

    1. Re:Spend on the game, not on spin by Anonymous Coward · · Score: 2, Insightful

      Indeed. The problem is determinism. You can't find a team which guarantees delivery of AAA+ titles without fail and on schedule. But you can easily patch a so so game into selling millions with the right propaganda.

  17. Wrong priorities and self-inflicted wounds by janoc · · Score: 2

    The problem is that the industry is spending the money on wrong things - massive marketing, shiny graphics, motion capture for animation ... Unfortunately, most of that is extremely expensive and laborious. I really don't need my next stupid shooter game to have motion captured animations of every monster done by AAA Hollywood mocap specialists at several thousands of $/hour.

    And as the "next gen" has to be bigger, better, shinier than the "last gen", the costs spiral out of control. Another consequence of this blockbuster mentality is that only few innovative "AAA" games get made, because nobody wants to take risks with such budgets - but how many times can you redo Doom?

    It is possible to make and release games cheaper, even big titles (just look at the Witcher series). The companies and publishers need to start to work smarter, not just pour more money at the problem. However, when the most complex AI in games are finite state machines and motion capture is considered as "AI" (true quote from one major studio exec), every bit of content is hand modelled, textured and baked instead of some sort of automation or more clever game design, when the "next gen" game innovation stops with rendering more nose hair and dirty pores (or bigger boobs) of the main protagonist than the "last gen", then I am really sceptical ...

    Oh and cut out the middle men and stop reinventing the wheel for the sake of greed (Origin by EA anyone?). You will cut your expenses by a factor of 2 right there.