Why So Many Video Games Cost So Much to Make

[itsme]

https://www.bloomberg.com/news/news...9.qopDytLFnUY5oOkR9UB2NLBxokJ4yJH0HqzkZP5_dvw

Why So Many Video Games Cost So Much to Make​

Graphical fidelity is only part of the reason that game budgets have swelled to hundreds of millions of dollars

Hi everyone. Today we’re breaking down how video-game budgets got so big, but first...

Wasteful spending​

Not too long ago, I had coffee with a video-game developer who told me that work was slow and that they’d been spending half of their days watching Netflix.

For a second I was stunned — this person worked for a major corporation worth billions of dollars — until I remembered how many times I’d heard similar stories.

There was the developer who couldn’t work because the game’s tools weren’t ready. There was the team that had to drop everything they were doing because the creative director had played Breath of the Wild over the weekend and came away with some Great Ideas. There were the artists who were blocked from working as they waited for a colleague to finish a design.

In other words, it’s not uncommon for professional video-game makers to find themselves spinning their wheels for prolonged periods, during which they get paid to do very little work.

I was thinking about this bizarre phenomenon while reading a recent story in the New York Times about how costs in the video-game industry are ballooning. The story, titled “Video Games Can’t Afford to Look This Good,” aptly points out that the industry’s long-standing pursuit of high-fidelity graphics has led, over time, to diminishing returns. But it also pins the recent wave of bloated budgets and mass layoffs on this frenzied quest for greater graphics — an analysis that is a little bit off the mark.

Let’s zoom out for a second. One objective fact is that video-game budgets have grown massively. For example, Naughty Dog’s Uncharted 2: Among Thieves, released in 2009, cost $20 million. The studio’s most recent game, 2020’s The Last of Us Part II, cost $220 million.

But the truth is that graphical fidelity is just one part of the equation. To understand why video-game budgets have grown so rapidly, you have to understand where that money is actually going: paying people’s salaries. A small part of a game’s budget might go to miscellaneous costs like office rent and computer equipment, but the vast majority is earmarked for labor.

Budget estimates vary based on location, but each employee in a pricey city like Los Angeles could cost anywhere from $15,000 a month to $20,000 a month, a figure that includes salaries, benefits and overhead.

Let’s do some quick napkin math. If you have 100 employees and you’re estimating $15,000 a month (a conservative guess) for each one, you’re spending $18 million a year. But these days, the top game studios are much bigger than that. So if you have 300 employees and you’re estimating $20,000 a month for each one (got to pay good wages to compete in 2025), you’re spending $72 million a year. (The real math is much more complicated, since people move on and off projects all the time, but hey, we’re just estimating.)

Another data point is that games take much more time to make. The gap between Uncharted 1 (2007) and Uncharted 2 (2009) was two years. The gap between Naughty Dog’s most recent two games, Uncharted 4 (2016) and The Last of Us Part II (2020), was four years.

Put those numbers together and it’s easy to see why budgets have grown tenfold. One Activision executive’s deposition in a recent lawsuit, dug up by journalist Stephen Totilo, revealed that Call of Duty: Black Ops III (2015) cost $450 million, Call of Duty: Modern Warfare (2019) cost $640 million and Call of Duty: Black Ops Cold War (2020) cost $700 million — not particularly shocking numbers in the context of Activision’s recent revelation that more than 3,000 people work on the franchise. (Those numbers also appear to include post-release content.)

Budgets for games are now enormous because those two vectors — more people, more time — have grown so significantly over the last decade. Graphical fidelity is a part of that, to be sure. In general, you need more artists and engineers to make games look more detailed and photorealistic. But games also need more time and people because of growing scopes, as games embrace massive levels and sprawling (sometimes bloated) open worlds.

And, perhaps most alarmingly, games are growing more expensive because of rampant mismanagement — because of companies chasing trends, making bad bets and lacking a clear creative vision. Inefficient workflows, technological shifts and insecure executives can all be the cause of wasted time, which equates to higher budgets. A common example these days is taking a team with years of experience making single-player games and pivoting them to a multiplayer game as a service.

Everyone who’s worked in the video-game industry for more than a few years has their own horror story. There’s the feature that gets canceled because the CEO’s teenage kid didn’t like it, or the level that everyone knows is going to get axed but that they all have to keep working on because the cancellation hasn’t officially been communicated yet. Or maybe it already has been canceled and nobody told the audio team.

It’s worth noting that video games do need ample iteration to be good, and some of the most successful games have been the result of so-called “wasted” work. Cuts and cancellations are not always a mistake. But there are also countless examples of teams of hundreds floundering in pre-production as they try to figure out what a game’s “core loop” will actually look like. That might seem like welcomed news for workers who get to relax for a while — until crunch time comes along and there’s no more leeway for the game to slip.

So yes, it’s true that the chase for better graphics has contributed to making games more expensive. But if game companies are wondering how their budgets really swelled into nine-figure territory, it might be time for some introspection — and less wasteful management.

 

[Inec0rn]

Why so many AAA Video Games cost so much to make.

 

[Necrensha]

There was the developer who couldn’t work because the game’s tools weren’t ready. There was the team that had to drop everything they were doing because the creative director had played Breath of the Wild over the weekend and came away with some Great Ideas. There were the artists who were blocked from working as they waited for a colleague to finish a design.

Remember how in Duke Nukem Forever each level felt like it was created during a different era?
Nostalgia bait intro->overly-long hub in Duke's tower->console shooter section->turret scene->driving section->cover shooter sequence in gray city->a singular room full of Half Life 2 physics puzzles->Doom/Prey level inside alien hive
It's exactly the same shit in the present but with several times more people and money. Now they copy Assassin's Creed instead.

 

[Inec0rn]

who cares, seriously?

Also if mocap, animations, graphics and big budget = success. how come the majority of AAA releases have been total garbage failures the past couple of years? It's almost like maybe the massive production costs don't equate to games people want to buy and play.

 

[thesheeep]

Meme answer? DEI, huehue

Serious answer?
A multitude of things - despite Schreier being the author, he actually got a lot of things right. Not the worst article.
One "issue", though, is that people in general are no longer willing to work insane hours for little to no compensation - or even at all.

And I get it. It's one of those things that give me a little hope for the future.
Nobody sane, when at the end of their lives, will look back and think "Oh, I wish I had spent more time working, earning other people money, and less time with friends/family/hobbies.". So people take more time for themselves if anyhow possible, and that's a great development.
Anyway, that drives up costs, naturally - across all industries.

Another issue is that it used to be people were willing to forego a lot of potential money just to work on video games.
Except for a few individuals (which will then mostly go indie/small time dev) that is no longer the case - games industry work conditions have become rather notorious + unstable. Wouldn't want to work there, either (again, unless I was doing my own thing) - and I studied that stuff to begin with, only to then nope out and become freelance coder

 

[Vic]

Because they have clueless people working on them.

 

[Gerrard]

Don't care, still not buying your slop.

 

[Monk]

"Yes, video game budgets are skyrocketing, but the reason goes beyond graphics"

Whatever the cause of the soaring development costs, some argue that the gaming industry faces a critical juncture because its current path is not sustainable. Video game journalist Jason Schreier illustrated this point in his Bloomberg report: "Let's do some quick napkin math. If you have 100 employees and you're estimating $15,000 a month (a conservative guess) for each one, you're spending $18 million a year. But these days, the top game studios are much bigger than that. So if you have 300 employees and you're estimating $20,000 a month for each one (got to pay good wages to compete in 2025), you're spending $72 million a year."

Recent revelations from an Activision executive's deposition in a lawsuit shed further light on the staggering costs of modern game development. Call of Duty: Black Ops III (2015) cost $450 million to develop, Call of Duty: Modern Warfare (2019) cost $640 million, and Call of Duty: Black Ops Cold War (2020) cost $700 million. With over 3,000 people working on the Call of Duty franchise, labor costs are undeniably substantial.

 

[JarlFrank]

Bloated companies waste money, news at 11.

The funniest part is you don't even need all these employees even for a game with top of the line graphics. What are those 300 employees doing? It's not like all 300 of them are 3D artists or programmers!
I talked to a guy once who worked at Crytek as a narrative director. He had several writers working under him, and he didn't even assign them individually to specific tasks. His job was merely to co-ordinate their efforts and make sure all the writing feels consistent. I don't remember if he said anything about how the assignments worked, or who gave them, but usually one character would have several lines of dialog written by different people. How the fuck is this efficient? Why do you need that many writers, and why do you need to split one character's dialog between multiple writers?

It's retarded assembly line work with too many cogs in the machine.
Pretty much every bloated AAA studio could cut its employees in half and still create games of the same size and fidelity as they do now. Perhaps the games would even be better, as individuals would have more space to implement their own ideas, and management wouldn't be as overwhelmed with managing so many people.

 

[Pots Talos]

That article is saying random game devs make 250+k a year? There is no way.

 

[Glop_dweller]

"You worked on that game?",
"I sure did.",
"What is yours in it?"
"The muzzle flash on the mini-gun."

 

[Poseidon00]

Game development studios should all be centered in rural West Virginia where 30,000$ a year is a perfectly livable wage and where the worst pushers of cultural degeneracy flee from.

 

[JarlFrank]

Making 15k a month sounds insane, if I earned that much I'd be a millionaire in a decade!

 

[Tyranicon]

Making 15k a month sounds insane, if I earned that much I'd be a millionaire in a decade!

Total compensation does not equal actual salary. Depending on location and other factors, your company-supplied health insurance and other benefits could easily clear 30% - 40% of your paid salary. That's not even including other overhead.

I remember learning my total comp package at my last corporate job and it was eye-opening. They paid way too much for me to surf the internet for 8 hours a day.

 

[Elttharion]

Schreier is probably considering the total cost for each employee (health insurance and other benefits). There was also a pretty big jump in salaries across the board in the US gaming industry in the last few years, the pay used to be way way below other tech sectors.

This reddit thread from last year is a relatively good picture of the state of the industry, most US based devs are earning +110k. Then again I would wager a good number of them were laid off so...

 

[duskvile]

One of the problem is the engine. Even Unity is though to get into if you don't have good hardware. On a home PC it's impossible to build a small game project, let alone if you have medium/large game.

Unreal is quite the challenge to program, although tools are evolved, it takes more people to use them and that increases the amount of people and time to get things done.

I guess next versions of game engines Unreal6/Unity 7/Cryengine should make better tools to get things done quickly.

 

[Hammer Of The Heretics]

Making 15k a month sounds insane, if I earned that much I'd be a millionaire in a decade!

In California you would wind up paying at least 40% of it in tax. Roughly 20% federal income, 10% state income, 10% social security and medicare. Plus a 10% sales tax on what you buy, and property tax if you somehow manage to buy a house and keep it from burning down.

 

[itsme]

These journos, I dunno. A few points of mine

- if we consider video games an art form, then constant iterations, scrap and overhaul is inevitable
- he's talking about efficiency which has always been an issue in business. Video games market has been growing constantly and apparently consumers are ready to pay for those inefficiencies. This may change once the market trend changes. Devs will have to start thinking about process optimization, cutting costs, etc.

 

[rumSaint]

It's always a problem with scale and big teams.

Once you reach certain threshold you cannot effectively manage people and you have to split it into smaller divisions. Then communication between divisioins gets muddied as you get contact points and proxies in a middle management. It's a whole management issue that plagues not only game dev. In case of bigger company lots of resources are wasted on additional administration, HR, legal shit, usually overblown artist and finally marketing.

Another big issue is overall lack of good ideas and vision. AAA sucks now, sequels on sequels on GaaS ideas. Nice.

Smaller studios have better communication which usually results with better vision, focus and overall consistency. At least from management perspective.

 

[abija]

Devs will have to start thinking about process optimization, cutting costs, etc.

This was already an important topic long time ago when I brushed with the industry. One of the main issues is completely incompetent management. You'll even find in some of Tim Cain's videos how casually he talked about hiring people with no qualification in such positions or how he handwaves big mistakes he did when he was management. I had the impression he just doesn't know any better which means he never met in his career competent "suits".

Usual result is they'll slow the development even more while trying to improve it, or at the very least generate overtime for no reason.

 

[lightbane]

Don't forget alphabet people who are completely incompetent and who will expand if unchecked. Worse, they seem to be mandatory. Their presence ensures a downgrade for sure.

 

[itsme]

Devs will have to start thinking about process optimization, cutting costs, etc.

This was already an important topic long time ago when I brushed with the industry. One of the main issues is completely incompetent management. You'll even find in some of Tim Cain's videos how casually he talked about hiring people with no qualification in such positions or how he handwaves big mistakes he did when he was management. I had the impression he just doesn't know any better which means he never met in his career competent "suits".

Usual result is they'll slow the development even more while trying to improve it, or at the very least generate overtime for no reason.

No doubt it was just like in any business. He is talking about recent games though like TLoU 1 and 2.

 

[Dark Souls II]

They/thems in the Diversity and Inclusion department have to eat too. And trust me, they eat a lot. Then you have the cost of exogenous hormones of the opposite sex, regular surgeries (you thought a mere penectomy is enough to make it in the vibrant and diverse world of game development? think again), therapy (Margaret Applebaum, PhD, might charge a lot per hour, but she's excellent at telling balding middle aged men that they are in fact anime catgirls), SSRIs, benzodiazepines, PrEP, semaglutide... And when they cover basic expenses like that, all that remains is donated to charities helping Latinx Genderqueer Native Black Lesbian Trans Non-Binary sex workers deal with the generational trauma caused by Colonial Racist White Supremacist Transphobic Climate Change Holocaust.

The money that you spend while buying $60 games helps these folks make ends meet. Think about it next time you even think about pirating a game. Log in to your Steam account like a decent human being, and legally purchase the Deluxe Premium Edition. And don't forget about all the DLCs.

 

[ghardy]

In other words, identity hustlers are scam artists.

 

[Grampy_Bone]

There was that Tim Cain vid where he talked about making Outer Worlds--

-A code change that used to take 15 minutes now takes 2 months

-Coders refuse to have a public "bug board" (where all the game's biggest bugs are posted w/ names attached to work on them) because they felt personally attacked by it

Two simple things that used to take a small office of dudes working with zero drama are now bogged down with endless meetings and therapy sessions. AAA gaming deserves to die.