Game Development: Looking at Hard Numbers is Hard

Posted by Rampant Coyote on January 16, 2014

How much does it cost to make a mainstream video game?

Kataku mines out a few numbers.

I remember being told that our games at Singletrac cost closer to $1.5 million to make… but that may have been in the Twisted Metal 2 era. Jaffe would know better than me, as he was one of the producers.

Even for a mainstream game development studio, it can be difficult to calculate exactly how much a game cost to make, especially when it is not working on just one project at a time. Where does the office manager’s salary come from? Or the HR / Financial controller? The company Christmas party? I’m sure there are accountants who have standard procedures and practices for all that stuff, and so maybe somebody somewhere could give an exact value for any one given company. But that’s a level of detail most people don’t deal with.

Your average producer probably has numbers for how much they paid in advances & milestone payments to the developer, how much marketing budget the game had, some fuzzy figure for “additional overhead” and ballpark figure for “cost of goods sold” for all the duplication and distribution costs. That’s good enough, unless they forget to add in a number when they are quoting budgets. These days, from what I hear, the marketing budget for the major releases can greatly exceed development costs.

Anyway – as implied by the article, take the numbers with a grain of salt. You aren’t always comparing apples to apples here.

How much does an indie game cost to make?

Ha ha ha ha ha!

Comparing apples to apples can be even harder with indie games, because some indies don’t pay themselves a salary, or include a “deferred salary” into the price of the game. Numbers are all over the board.  And if you don’t have to account for the hours put into making a game (because there are no salaries to pay accordingly), it can be easy to lose track of even how much time went into the development of the game to provide a decent estimate.

And if you think figuring out how much a game cost to make is bad, try figuring out sales!

Back in the Singletrac days, I was explained the difference between “Sell In” and “Sell Through.” To my mind, the “Sell Through” was the important number – that’s the number of games that landed in the hands of gamers. Unfortunately, that number is more likely to be estimated, and the information goes through a couple of layers of indirection. You can know the sell-in numbers – how many games have shipped to the stores – but not how many the stores have actually sold. If they are all re-ordering more copies, you can estimate that the sell-through number is pretty close to the sell-in number. But after that… how knows?

For indie games, you’d think it would be easier, but it’s often not. If you are only selling games from your own site, then yeah – you can have that data available, no problem. But when you start distributing through third parties – especially as part of bundles and so forth – things can get fuzzy really fast. You may not have access to all the numbers. And even if you did have the number, it can get deceptive these days. I own two or three copies of several indie games due to bundle deals or whatnot. While technically, that’s two or three separate sales of the game, it’s not like I’m doing anything with the extra copies (unless I have the option to give them away). It’s not the same as selling them to two or three unique customers.

A lot of the successful indies I know don’t really know exactly how many copies of their game they have sold. They may not even track exactly how much the game has made – at least not as a regular activity. They do track the monthly income, however. Like a hawk.

That’s the bottom line. That’s the part that counts when you are trying to keep your head above water and keep making games.

Filed Under: Biz, Production - Comments: 3 Comments to Read



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