Games' budgets and costs to create a video game

[Antimatter]

I've thought about starting this thread for a while. We had a similar topic about games created in the '90s and '00s.

Here are a few snippets I've gathered about the latest info on games' budgets.

Baldur’s Gate 3 was said to have been developed by over 300 staffs across 6 studios with a budget of over $100M USD. [1]

Starfield had a team of 500 and a budget of over $200M USD. [2]

Cyberpunk 2077 had a total budget of $316M USD. [3]

CDPR spent another $103M USD on developing Cyberpunk 2077's PlayStation 5 and Xbox Series X/S re-release as well as the new Phantom Liberty expansion. [4]

Experts put Hogwarts Legacy's budget at $150 million. [5]

According to the poorly redacted declaration submitted by Sony Interactive Entertainment during the Xbox Federal Trade Commission case, The Last of Us: Part 2 cost some $220M USD to develop, with a peak headcount of some 200 full-time employees. Horizon Forbidden West, meanwhile, cost $212M USD to develop and utilized more than 300 developers. [6]

Control had a budget of $30M USD. [7]

But that's AAA games. Check out more on their budgets here:

The 15 Most Expensive Games Ever Made (& How Much it Cost to Make Them)

Just as the power of home consoles and high-end gaming rigs has increased in recent years, so too has the cost of developing cutting edge games.

gamerant.com

List of most expensive video games to develop - Wikipedia

en.wikipedia.org

The gulf between AAA games and other games is substantial.

Hellblade was made on a micro-budget of under $10M USD with a small team of around 20 people. [8]

Pathfinder: Wrath of the Righteous was developed on a $2M USD Kickstarter budget. [9]

Cult of the Lamb had a $0.5M budget. [10]

 

[Fandraxx]

The fact that these AAA companies can have budgets of this magnitude and still can't figure out how not to crunch their employees is borderline astounding.

I'll always root for the games cobbled together from mothballs. Nothing against big budgets, but there's something about the ingenuity of the smaller titles that can't be replicated.

 

[Antimatter]

Two recent revelations:

The Lord of the Rings: Gollum had a budget of $15.9M.

The Lord of the Rings: Gollum was a $15.9 million flop, according to new behind-the-scenes report

A bumpy production led to a bumpy launch

www.gamesradar.com

The Lamplighters League had a budget of $22.8M.

Paradox says The Lamplighters League sales were 'a big disappointment,' confirms recent layoffs at developer Harebrained Schemes

The layoffs at Harebrained Schemes actually occurred a few months before The Lamplighters League was released.

www.pcgamer.com

Both games are now considered failures (and yes, The Lamplighters League was just released ~a week ago).

 

[Skatan]

From what little I've seen, heard and read about the Gollum game, it really felt like one of those kickstarter scams where the dev's make a demo, get people to pledge and then deliver something barebones and takes the net in their pockets. But this time it actually did cost quite a bit of money, heh.. where did they spend it?

 

[Antimatter]

Lords of the Fallen had a budget of $66.6M:

$42.2M development
$19.3M marketing
$5.1M physical copies production

Lords of the Fallen’s total budget exceeded $66 million, making it most expensive title in CI Games history | Game World Observer

Despite technical issues, Lords of the Fallen had a strong launch commercially. And publisher CI Games has now disclosed the game’s total production and marketing costs.

gameworldobserver.com

It's interesting that so far it doesn't seem like it sold enough to recoup (even while it is considered to be a successful launch). CI Games reported the game had sold 1M copies. With the price of $60 USD and the Steam cut (30%), it's not enough yet.

 

[alice_ashpool]

to spend so much and achieve so little. cui bono?

 

[Antimatter]

TBH, $19M for marketing is A LOT. Some games spend up to 50% on marketing, but this figure is huge.

Apparently, they used ads in Manhattan.

 

[alice_ashpool]

50% of dev budget on marketing seems par for the course for movies these days based on the vids I have watched about the decline of and fall of the superhero industry. And I suppose $40M on development isn't that much for an attempt at a AAA game that tries hard to be pro but just ended up being mid. But still, sometimes I'm left thinking "this cost how much?"

 

[Antimatter]

Another story for the record.

The Day Before Sold 200k Units, With 91k Refunds On The Same Day

New data reveals that almost half of The Day Before's buyers refunded the game (91,694 unit out of 109,382 copies) soon after purchasing it.

gamevro.com

Once the most wish-listed game on Steam sold only 200k units with 91k refunds and got shut down 4 days after the Early Access launch.

IGN created a series of pictures explaining the depth of all the problems this game (and the company) had.

The Day Before Dev Promises Refunds, Tells Customers: 'S**t Happens' - IGN

Following the disastrous launch of The Day Before, its developer has said it is working with Steam to make refunds available to all, and insisted it will receive no money from sales of the game.

www.ign.com

Just 11 days before:



"Analyst Andrew Uerkwitz, a managing director at the financial services firm Jefferies, told IGN so-called ‘scam’ games will likely become more prevalent as third-party game engines become easier to use among the spread of AI enablement. “The good news is gamers are very good at figuring these things out,” Uerkwitz said."

 

[mlnevese]

That was a very insightful read and at the same time very confusing.
Someone must have been benefiting here or stuff wouldn't have happened, right?

What do they mean with "scam" game?
AI supported copied content for trailers and stuff to raise interest, I can see that, but only for the hope that some people might not realize early enough for refund? Or is the process of developing a game somehow beneficial to someone? But how? They can't really earn money during that period, or can they?

I'm seriously confused if what we're seeing here was a very unashamed attempt to cheaply produce and sell something that looks like a blockbuster, or if it was grotesquely misjudged business strategy, or something else entirely.

They got money from investors, used as little of it as possible to develop a non-working game and raise the hype to attract more investors, then declare bankruptcy after 4 days of releasing the game so they will just keep the money left. I'm over-simplifying it but that's basically what they did.

 

[Antimatter]

Read on about the investigation of their finance scheme:

I tried visiting The Day Before developer Fntastic’s offices in Singapore, and this is what I found

According to financial records filed with Singapore authorities, The Day Before developers Fntastic made S$3.4 million in 2022.

sg.news.yahoo.com

And on a separate note, here are the numbers for Alan Wake 2, one of the highest-rated games of this year, and deservedly so. The numbers are very, very low. They also have the Epic Games exclusivity which meant some hard numbers were received straight for that (the majority of PC players are waiting for the Steam release), but still.

Alan Wake 2's Seemingly Dire Sales Don't Paint the Full Picture - IGN

Earlier today, we reported on Circana's monthly US game sales report, which has Hogwarts Legacy and Call of Duty: Modern Warfare 3 in a neck-in-neck battle for annual best-seller. But a quick glance over the charts for November reveals a conspicuous missing entry. Where's Alan Wake 2?

www.ign.com

 

[Antimatter]

A leak by hackers shows the cost of upcoming AAA games by Insomniac Games based on the X-Men franchise.

"Of particular interest to gamers who are fans of the X-Men is a publishing agreement between Marvel and Sony Interactive Entertainment, signed by both Isaac Perlmutter, Marvel’s chairperson of entertainment, and Jim Ryan, Sony’s president. The document is effective as of 26 July 2021 and lists three upcoming X-Men games to be published under the agreement, the first being Wolverine and the rest as yet unnamed.

But the document does go into release dates and costings, as well as many other details. Wolverine is to be published no later than 1 September 2025, while the other two are to come before 31 December 2029 and 31 December 2033, respectively.

According to the agreement, Sony is expected to spend at least US$120 million on each title."

Snikt! Rhysida dumps more than a terabyte of Insomniac Games’ internal data

The Rhysida ransomware gang publishes 98 per cent of leaked data minutes after the ransom deadline passes – Wolverine game files included.

www.cyberdaily.au

 

[Antimatter]

Immortals of Aveum was released in August 2023 to a relatively paltry reception, failing to secure traction in a bustling market that saw other, more dominating games snatch the top spots in the charts with ease.

In a recent report published by IGN, it was revealed that Immortals of Aveum cost $125 million to develop: the development cost was ‘around $85 million’ and Electronic Arts – the game’s publisher – threw in $40 million for marketing and distribution costs.

Immortals of Aveum was a $125m 'Awful Idea', Report Says

In a recently published report, details of Immortals of Aveum's development have been revealed, talking about how bad an idea it was to make it.

insider-gaming.com

 

[JustKneller]

What do they mean with "scam" game?
AI supported copied content for trailers and stuff to raise interest, I can see that, but only for the hope that some people might not realize early enough for refund? Or is the process of developing a game somehow beneficial to someone? But how? They can't really earn money during that period, or can they?

They got money from investors, used as little of it as possible to develop a non-working game and raise the hype to attract more investors, then declare bankruptcy after 4 days of releasing the game so they will just keep the money left. I'm over-simplifying it but that's basically what they did.

Minevese kinda summed it up here. This is expected to be a growing trend with AAA games. That is, par for the course now is that a game is rushed to release and then (presumably) patched after market. The sooner you can get a release, the sooner you can start making money. Because the standards for a release are dropping, a scam game can get away with a hack job and false promises (like what The Day Before did). Of course, they are going to have an exit plan for the media. Fntastic dissolves and the same people can reform under a new company name and try again. Not to mention, investment fraud is a real thing so they have to make it look like they accidentally screwed up to dodge charges.

This is mainly why I don't even buy new games anymore. Why spend $60 on an essentially incomplete game that may or may not get polished up in the future? Better to wait a year or two (or three, depending), grab it on a gog/steam sale for $10-20, tops, assuming the devs finished the job. You get a better play experience for a fraction of the cost. As an added benefit, when you do need to upgrade hardware, you don't need the most expensive top of the line system to play what you're playing.

It's kind of a sad thing, but the AAA industry just got too big to maintain integrity and then this creates a space for leeches like Fntastic. Believe it or not, though, this conversation (for me) started decades ago back when 3d rendered games became the "standard". It seriously jacked up production costs to create more elaborate visuals, which increased the need to rush/boost sales in order to keep the bottom line in the black. Just look at the course of Looking Glass Studios, then Irrational Games/2K, then Ghost Story Games. They didn't play the shady business game and they went from making some of the most brilliant games in the hobby (Thief, System Shock 2, Bioshock) to a small indie group that hasn't actually even released a game since they were founded in 2017.

 

[Antimatter]

New info on Alan Wake 2:

"I haven’t finished Alan Wake 2, but what I’ve played of it made me gasp, laugh, and scream in equal measure. It’s widely considered one of the best games of 2023, and was a strong contender for Game of the Year against the incredible Baldur’s Gate 3. It’s won a handful of other awards, been nominated for many more, and got 5 out of 5 stars from us, which is totally the most important thing.

It’s a widely-loved game, selling faster than any of Remedy’s previous efforts, including 2019’s Control. It moved over a million copies in just a couple of months, having sold 1.3 million units by February 2024. And yet, the game hasn’t broken even.

Clearly, Alan Wake 2 is still very successful. It’s not that it isn’t a good game (it is) or that it isn’t marketable (it is). But the game’s budget was 70 million euros – that’s 50 million for development, and 20 million on marketing. That’s about 54 million USD and 21.5 million USD, for the record. That’s a huge budget, and it’s not even the exception – Baldur’s Gate 3 cost more than 100 million USD. The Last of Us Part 2 cost 200 million USD. Horizon Forbidden West cost 212 million USD. Alan Wake 2 is on the lower end of triple-A budgets right now, and imagine the blow was softened significantly thanks to a publishing partnership with Epic Games."

Alan Wake 2's Success And Failure Is A Foreboding Sign

I worry the industry will see Alan Wake 2 not breaking even as a reason to stop making games like it

www.thegamer.com

Alan Wake 2 is Remedy’s fastest-selling game yet, shifting over 1.3m copies, but hasn’t made a penny of profit

Sells 50% more than Control in half the time.

www.rockpapershotgun.com

And a take from Josh Sawyer (Obsidian):

 

[JustKneller]

I'm not surprised. I think the AAA and even the AA industry is at the cusp of being too big to be sustainable, if it's not there already. I had a conversation about this some time ago with a friend, though we were talking about a different industry at the time, but it was a similar effect. That is, any industry, especially a luxury industry can only grow so large before it essentially collapses upon itself. And, with a luxury industry, the most expensive you get, the fewer consumers you will have. There's a reason why Bentley only has a few thousand employees and GMC has about 50x that.

The tabletop industry is a good example of both a collapse and reaching an equilibrium. For the first couple decades, it was pretty much just a handful of publishers. Then the 90s hit and you had a lot of other professional designers hit the scene. It was a bubble, though, and eventually burst when "indie" design and self-publishing became a thing. Most of the people who survived the burst did so by diversifying into things like minis, cards, etc. Basically, they started selling things that you couldn't just put into a pdf and upload to itch.io or DTRPG.

The equilibrium now is that the hobby has somewhat stabilized in its place. Because of self-publishing, there's a lot of faff to sift through. However, the quality products are put out by very small teams and have landed on a price point what works for both producers and consumers. It's a hobby, and the market generally isn't there to make a proper living (most don't make anything close to minimum wage). To be clear, I'm not referring to Wizards of the Coast. They're a whole other animal. This is just the market at large.

That being said, I think video games as a hobby are going to be fine. If/when the bubble bursts for video games, so it goes. At least the indie scene will be fine and there's plenty of space there for good writing and good gameplay. For example, take Alan Wake 2. You could probably rebuild the game in a tweaked version of the HPL engine, which was originally created in the 90s and used for survival horror games like Pneumbra and Amnesia. It wouldn't be as visually smooth, but still effective for the genre, manage the same detail of gameplay, and cost a fraction to produce.

I don't think people will stop making games like Alan Wake 2. It may come to pass that people stop making games that look like this and instead try to be effective with a more economically feasable medium. But, good game design can work with just a single person and a good idea (i.e. Stardew Valley).

 

[Antimatter]

A very insightful read about why Final Fantasy recent sales didn't meet expectations.

"[Former Square Enix executive] Jacob Navok noted that if a game costs $100 million to make over five years, it has to beat what the company could have returned investing a similar amount in the stock market over the same period. “For the 5 years prior to Feb 2024, the stock market averaged a rate of return of 14.5%. Investing that $100m in the stock market would net you a return of $201m, so this is our ROI baseline,” he explained.

Besides production budgets, there are also marketing costs, platform fees, and other factors such as discounts to take into account.

“Assume marketing expenses at $50m, and assume that you’re not going to get $49 [after 30% platform fees] but rather an average closer to $40 given discounts, returns and other aspects,” Novak noted. “Now let’s say in that first month you sold 3m copies with $40 net received (we will ignore the recoup). You need to surpass $254m to make expectations. (That’s $100m + $101m in ROI baseline + $50m in marketing).”

"Game companies have several ways to increase the ROI for their products: decrease costs, increase price, or increase audience size. As it is hard for single-player titles to significantly increase the number of players, Novak believes that publishers will continue to charge more for their games. The new $70 base price already seems too much for many customers, so companies try to come up with tricky monetization methods, including various deluxe editions priced at $100 or even higher.

Novak also cited another, less realistic way: “If publishers can capture more of the platform side revenue, they can moderate price point increases while capturing a better return on investment because they’ll be capturing say $50 or $55 out of $70.”

Former Square Enix exec on why Final Fantasy sales don’t meet expectations and chances of recouping insane AAA budgets | Game World Observer

Former Square Enix executive Jacob Navok has shared his thoughts on less-than-expected sales of the latest Final Fantasy games. He also tried to explain why people mistakenly think that the Japanese publisher is simply setting unrealistic goals for its products.

gameworldobserver.com

Tbh, it's so sad to see how games are pitched against stock market returns. Like, how on Earth? So essentially, it doesn't mean what you're creating and how, at all..

 

[JustKneller]

Tbh, it's so sad to see how games are pitched against stock market returns. Like, how on Earth? So essentially, it doesn't mean what you're creating and how, at all..

Coming in 2025, Final Fantasy XXXIV. Be sure to buy the Deluxe Platinum edition where you can turn both left AND right!

That's how I feel about "deluxe" editions.

Side note, in my mind, the "final" Final Fantasy was Final Fantasy IX. I tried some of the later ones, and then I blocked them out of my memory.

But, it kinda makes sense that they are pitching it off the stock market. Like, if I'm an investor, and I can take my money and put it in a lower risk diversified fund and get a better return than investing in a video game, then that's likely what I'd do. This goes double since there seems to be an inverse relationship between a game's commercial viability and its creativity and innovation. Why invest in a risky "product" when I can get more for a relatively safer one.

 

[Antimatter]

Concord's (yes, that live-service game that was quickly shut down) budget was supposedly $400 mln USD.



If true, this is just crazy. A crazy-high development cost, and a crazy-high failure (the game lasted for 12 (!) days).

 

[Nimran]

AAA gaming is going to collapse at this rate. Good riddance.