How Much Does It Cost To Make a Video Game?

Posted by Rampant Coyote on October 7, 2015

I want to make a video game. How much will it cost? How much time will it take? How many people do I need on my team? How much can I expect to sell?

These are all what we often call “How long is a piece of string?” questions. There are so many variables involved that newcomers to indie game development don’t even know what they are or how ridiculous the questions sound to seasoned vets. Depending upon the “vision” the answers are, respectively, “Anywhere from nothing to hundreds of millions of dollars,”  “somewhere between a week and forever,” “between none and a couple hundred,” and “probably more than none, but maybe not much more, and definitely less than Minecraft.”

Jason Schreier wrote a short report on Kotaku about yet another funded Kickstarter videogame failure, Midora. It was yet another example of what I talked about in my blog post earlier this week about indie survival skills. Then he had to go and ruin it with what I’m sure he thought was helpful but entirely wrong-headed advice:

“If you see a video game Kickstarter asking for less than, oh, say, $200,000 (aka: a year’s salary for four people working at below-average rates), you probably shouldn’t back it. And if you see a video game Kickstarter whose creators don’t seem to have any experience shipping actual video games, then, well, you probably shouldn’t back it.”

The latter point has some validity, and I’ve suggested the same before. Unless I have some other reason to trust them, I’m pretty hesitant to fund a team or leader without a track record. Of course, I phrase it as being “very cautious,” not “you probably shouldn’t back it.” If you are throwing $5 at someone to pursue their dreams, and you feel it’s a reasonable donation if nothing is ever delivered, go for it. Just know what you are getting into.

But that first sentence makes some really terrible assumptions:

#1 – Salaries are hard costs being covered by funding

#2 – The funding is covering all hard costs

#3 – The funding is covering the complete development of the game

#3 – The size and scope of a game is approximately equal to four people working a year

I remember a bit of a controversy many years ago with Alien Hominid by The Behemoth. For the IGF, they reported a budget of $1.3 million, which many people complained was too much for an “indie” game.But in interview with Russell Carroll (sadly, the page can only be found in the Internet Archive), producer John Baez explained that this wasn’t all hard costs. The number wasn’t an actual cash value that was put into the game, but reflected both that and the market value of donated time. So the $1.3 million was how much the game should have cost, and how much the founders were “owed” when the royalties started coming in (assuming success, of course):

“When we were filling out the IGF entry, we decided it was best to put a number which accurately reflected the amount due to all the people who worked on the game as well as the out of pocket expenses. It didn’t make sense to us to put up just the out of pocket numbers because that doesn’t reflect what the game really cost to make. None of the founders of the Behemoth will see any money until we start seeing royalties…  As far as Alien Hominid is concerned, we paid for 110% of the development of the game ourselves, including non-development things like marketing, trade shows, PR and getting reviewers to review the game. We didn’t use any outside money from our distributor O~3 Entertainment, venture capitalists or outside investors, we did it all internally by mortgaging or selling our homes, liquidating savings and the like. Some of the guys even worked side jobs or freelance.”

Dan Paladin followed up with a quip, “If putting MORE out of your own pockets on the line somehow makes you LESS indie, then someone needs to explain to me how that works.”

Even the “big indie” productions like InXile’s RPGs have included some out-of-pocket investment. The recently-completed Divinity: Original Sin 2 crowdfunding campaign was for purely supplemental features… the core game was self-funded by back-end revenue from the first game. In fact, one of the big complaints about Kickstarter and other crowdfunding campaigns nowadays is that give backers a highly inaccurate view of how much it costs to make a game. But in my view, the less experienced (and, dealing with reality, the less famous) the development team, the more they are going to have put into the project out of their own pockets. Maybe they get something on the back end. More often than not, no.

But even with a purely hobbyist project made completely out of donated spare time, there may be hard costs. Some may be purely for the project, others may be for the individuals or the studio in general. There are tool costs and licenses to consider. Getting booth space at a convention can eat up a lot of funds. Contracting out for music, art, or localization costs money. Advertising costs money. Applications for contests may cost money. It costs a little bit of cash even to get your game onto Steam Greenlight. Registering a domain name and running a website requires at least a small outlay of funds. A fast, professional download site for your demo may cost money.

These things can easily add up to thousands of dollars, even tens of thousands over time, and even a lone wolf drawing no salary working a day job to finance his game dev “hobby” may find himself struggling to deal with these expenses. That’s why crowdfunding is a cool idea.  There’s no law or policy stating that these campaigns must or even should be complete coverage of game development costs. In my opinion, they shouldn’t be. Indies should be their own backers first and foremost, whether through donated time or self-funding (hopefully, eventually, through sales of previous games). Otherwise, are they really independent of anything? As a backer, would you want to back a team that didn’t have any of their own skin in the game?

In some cases, a game is “nearly done” and is using crowdfunding as more of a way to generate publicity and pre-orders. It’s as much a marketing opportunity as a way to pay for the final stages of development, or possibly a way to gauge interest and determine whether or not to increase scope and features. It may be just to contract an artist to pay to turn programmer art into something that looks decent. It all depends. As a backer, the actual funding amount isn’t what you should pay attention to – it’s what the funding is paying for, who the team is, and how well they seem to have things under control.

As a small, relatively unknown indie, getting crowdfunding to pay the entire cost of development is a non-starter. If a relative nobody without much of a track record with making games was looking for crowdfunding to 100% cover the cost of development, I’d be very suspicious. I’m more interested in indies that are determined to get their project done, and are using crowdfunding as an option, not the only solution. That’s how it should be.

Indie games are still being made without the benefit of crowdfunding. I think a healthy environment is one in which that is only one of a plethora of options. Especially for new developers, it may be best to go “on the cheap” and pay for it out-of-pocket as much as possible. After you’ve established a track record, THEN you can ask people to pay money for your promise.

So how much does a game cost, and how much of that should be reflected in a crowdfunding campaign? How much should make you suspicious as a backer?

How long is a piece of string?

Filed Under: Biz, Indie Evangelism, Production - Comments: 7 Comments to Read



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