This might be a dumb question. So I get that there goes a lot of work and time in creating a high quality game and with major game studios like ubisoft and fromsoft the cost can rank up to hundreds of millions of dollars, but even though it takes a lot of work to make a good game, how does it cost 500 million dollars? like where does that money go to? is there one specific part of making a game that costs a lot of money for large studios?
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When lagre teams of highly paid employees using expensive hardware and equipment are needed, costs go up. It’s also important to note that there is huge overlap between video game and movie production. Movies and games both record their own scores most of the time. They both use actors (video games for motion capture or voice acting) and big names often command high prices. Creating the assets for video games is not much unlike doing CGI for a movie, if not more complicated. And of course included in those massive budgets are often massive marketing costs, which can often be a quarter or a third of the total budget.
They’re basically huge productions involving a lot of people and very simillar to movies so budgets have shifted towards that end.
As other people have mentioned that games have a lot of employees and they work on titles for years.
One contributing factor is the amount of overtime “thrown” at a game to both program and test it. You know how people in the video game industry complain about months of “crunch time”? That means they’re working overtime every single day.
I remember in the final leg of most games we worked from 9am until midnight (one hour lunch break and one hour dinner break). You’d work that six days a week and have one random day off.
So five hours of overtime per day spread across around 40 people (and this was at a mid-sized studio).
I almost forgot, the last week of testing there would be a “24” where the test team would work for 24 hours straight. Complete idiocy and a huge waste of money.
I actually work in the industry and have insight on how much games cost.
Commenting from a throwaway because it’d be possible to work out who I work for from my previous posts.
The short answer is, they don’t cost that much. The $400M stat that’s been trotted out for Concord has no clearly corroborated source, and has been debunked by far more reputable journalists than the one who initially reported it. For reference, GTA V cost a little under $150M to make, not including ongoing support for GTA Online over the years.
In terms of budget leading up to launch, $400M would make Concord the most expensive game ever made, by a significant margin (discounting the funds allocated towards Star Citizen). People have readily believed this bilgewater reporting because the state of games discourse is extremely poor at the moment, and Concord has become the latest game that people want to hate.
The projects that even begin to approach the amount you’re talking about are the absolute peak of budget. The majority of releases (talking “indie” through to “AA+”) cost anywhere from $500K-50M, with some notable outliers. People forget how small a portion of the games that release in the year are true AAA titles – it’s miniscule in the grand scheme of things.
Perhaps the most ridiculous claim I’ve seen is that marketing budgets often are as great as or exceed dev costs. The only situation in which this could approach true would be for a longterm live service title, and we’d be talking dev costs leading up to 1.0 vs ongoing evergreen marketing over a number of years, which is not a fair comparison – especially as any live service title will have ongoing dev throughout its lifetime.
The reality is that marketing budget – with some outliers – typically sits within 5-20% of project costs. Greenlighting marketing spend far beyond that, unless you literally *know* it’s going to be made back due to existing IP strength and hype, would be tremendously irresponsible.
The number of confidently wrong armchair pundits I see on this site talking about the industry, when they have not the slightest idea about how or why decisions are made, boggles my mind. None of you have any idea what you’re talking about.
They forgot how to make games good, so they’re trying to compensate by making them bigger. Decisions are made by people who don’t know anything about gaming, only about running a business. So they follow a straightforward logic where they think the more money they spend on making a product the better it becomes. The competitors made a half billion dollar game, so if we make a billion dollar game, surely we’ll win. And then they have surprised Pikachu face when people prefer games with soul was put into them instead of just money.
Assuming an average of $73,000 a year for an employee, times 3 years of development that’s $219,000 just for one employee. the big studios have 100+ employees, so that lands us at around $21mil just in employee salaries.
Add to that $200mil that the big bois spend on marketing, and it’s not hard to see where that money goes.
Honestly? Money laundering.
Programmers and artists
Those two positions alone cost a fortune, now you still gotta do marketing and publishing if you’re doing that yourself.
Music and sound effects team get a cut which won’t be small.
Quality assurance like testers and such also need paid.
Now is your game going on a physical format? Gotta pay for that to be done and distributed.
There’s also more higher ups that get their share for being lead design and game director which is a huge cut also.
The rest goes to standard office expenses: janitors, secretaries, bills, rent, etc all the people and things that may not be hands on development but the business wouldn’t be able to run without.
When you take all that and put it on the scale of companies the size of rockstar, EA, ubisoft and the like, games costing millions to make makes sense
Salaries, software licenses, hardware, marketing, office and studio renting, VA’s, physical production like hard copies of the game or items for collectors editions.
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