This article by Themis CEO Alexander Macris (publisher of the Escapist) encapsulates almost everything I’ve been trying to say about this industry for the last six years. The reality of development costs is painful and I don’t see any way around it.
The numbers in the article are ballpark figures, but they jive with assumptions I’ve been working with:
All game developers, and even most gamers, are aware that it costs more to create a videogame for the latest generation of consoles than it took for prior generations. But how much more? While hard data is hard to come by, a variety of estimates are available on the web that support the following approximations:
* 1994: 4th generation premium videogames cost $200,000 to develop and retailed for $60-$80
* 1999: 5th generation premium videogames cost $1,000,000 to develop and retailed for $40-$60
* 2004: 6th generation premium videogames cost $5,000,000 to develop and retailed for $40-$60
* 2009: 7th generation premium videogames cost $25,000,000 to develop and retailed for $60-$80
And then later he breaks those numbers down for us:
* 1994: 4th gen videogames had to sell to 16,000 customers to break even
* 1999: 5th gen videogames had to sell to 80,000 customers to break even
* 2004: 6th gen videogames had to sell to 400,000 customers to break even
* 2009: 7th gen videogames had to sell to 2,000,000 customers to break even
Do read the whole thing for the full context.
Usually when we talk about how games are getting bigger and dumber (don’t even get me started on this year’s E3) we comfort ourselves with talk about how indie games will save us. But even if an indie is willing to step back to 1994 level technology* we’re still looking at games that take $200,000 to produce, and that kind of scratch is hard to come by and easy to lose. If you handed me $200k right now I sure as heck wouldn’t risk it all on game development.
* You wouldn’t actually want to go back to 1994 tech, or the game would actually be harder to develop and would have trouble running on current-gen computers. But you would need to go back to 1994 presentation styles of 2D or isometric views. As soon as you move to 3D you’re animating polygons and dealing with lighting and camera movements and you’ve basically jumped up to the $1 million price point.
$200k might sound like a lot, but when you think about having just three people spend two years on a game, that works out to each person grossing just $33,000 yearly. Once you pay taxes and buy health insurance, you’re not doing much better than minimum wage. And minimum wage people at least have a guarantee that they’ll get paid for their work. In game development there’s always the chance that the thing won’t sell and you’ll have wasted your time and treasure. Oh, and the minimum wage worker is a lot less likely to be hauling around an albatross of student debt.
So even if you did have $200k (which again, is a crapload of money in my book) the best you could do is pay a small team very poorly in order to have a chance at making a game that will be ignored by the press and could end up making almost nothing.
So we can get fun puzzle games like World of Goo. And we can get $50 million popcorn games like God of War. But there isn’t really a viable path for the stuff in between. Which is why we’re not seeing deep, niche games like the original X-Com, Starflight, or Elite. (Yes, we have Dwarf Fortress, but that’s a rare exception and I don’t think we’re going to see a lot of indies going down that road.)
Shamus Young is a programmer, an author, and nearly a composer. He works on this site full time. If you'd like to support him, you can do so via Patreon or PayPal.
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