I've been gaming for a really long time and I remember when Diablo 2 hit it's milestone of a million sales. It was a huge deal. Selling millions in the 80s/90s and into 00s was just a bit more rare. Eventually, games got more and more popular and for some reason it seems like we've hit a point where too many games have to hit 10s of millions to recoup. What's the deal with that?
Even indie games I'll see something stating that a million sales didn't help them recover loses. Indie games. How? And given how graphics haven't jumped this gen to astronomical wow levels, I have no idea what these budgets are going towards. Halo Infinite is a good example of bloat budgets. There's nothing revolutionary about this game but it had some incredible budget that wasn't justified.
Games are supposed to take way longer yet they're not giving us gameplay that's much better than the previous two gens. And with more advanced tools like the new UE, it seems that the games should be easier and cheaper to make. Wasn't that Matrix Awakens demo, while not a full game, done in less than a month?
Oh we can go into this in detail, though not completely but in quite a bit.
First and foremost, costs like staff, equipment and office will already send you into the hundreds of thousands to the millions depending on the amount of staff members you have. Back in the day you could make games with 20 people in a garage with a bunch of office computers, but today, even an indie team can reach over 100 employees, computers have to have GPUs that cost up to $6,000 per computer and an office can have a yearly rent of $500,000 at the low end. So let's say 60 of your 100 staff uses the high end desktops to make the game. That's 60 desktops that can cost $10k at the least. Then there is the cost of other equipment like servers for storage and other programs, the network cost, and contractor cost, that's millions before even creating a single game.
Then we get into development and the time it takes to make a game. You have to pay your employees an hourly wage at the lowest of $15 an hour. If they have to crunch then you have to pay overtime as well. With games taking 3 to 5 years to make, that's 26280 to 43800 for 100 people. At the lowest rate of $15 an hour, that's at least $394,200 to $657,000 at the very low end, this assuming your office is in a cheaper state. If you're in somewhere like California, you're looking at an average of $28 an hour, that's $735,840 to $1,226,400. Then you have to determine if you're making an engine from scratch, which would add another year or two and hiring coders who have the ability to do that who would go for $30 - $40 an hour, or if you're going with middlewear like Unreal Engine, which will cost you $1,850 per person per year, so with say 60 programmers and artist using UE5 for five years you're looking at roughly $555,000 for that one game.
Now let's skip some extra cost like taxes and other fees and go straight into publishing. Say you say this game is worth the current $70 and you manage to get that one million unit sales, that's a net of $70 million. Now, subtract the cost of development which was around $10million, that leaves you with $60million. Now for the big costs. Licenses fees, publisher fees, if you went with middleware, they now get a percent of whatever you make like the publishers and the cost of hosting for digital sales. So let's say you only put this game only on steam. Well, whatever you make after you pay off the development cost, Valve gets 30% of what you make, whoever published the game for you gets 30% and again, Epic or whatever middleware you may have went with, takes %5 of the money. So of that $60million, you lose another $39million, leaving you with $21million. But you also need to pay money to advertise the game, this one pretty much will leave you in the negative depending on how you're trying to advertise the game.
Now imagine all that PLUS more licensing fees when you have physical copies and publish on consoles. Selling one million units won't earn you enough for any of that to matter.
