What does it mean when you say a movie spent x billion dollars on special effects? What exactly does all that money go to?

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What does it mean when you say a movie spent x billion dollars on special effects? What exactly does all that money go to?

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Paying a studio to perform VFX usually, at the high end that can include making special software for certain effects, not as common now a days but still done. Special effects also includes practical effects such as pyrotechnics, prosthetics etc.

Depends on if it is in reference to digital effects or practical effects.

Digital effects usually amounts to teams of graphic artists and animators creating the effects using certain programs. The best example would be movies like Avatar

Practical effects is making those effects happen in real life, usually stunts and explosions. The best example here would be movies like Mission Impossible, although some similar movies use both digital and practical effects.

Basically, the money either goes towards teams of likely hundreds of digital artists, or a whole slew of explosives, pyrotechnicians, stunt people, vehicles, etc.

Billions would be a large exaggeration. Even the more expensive movies have production budgets in the low to mid hundreds of millions.

Other than that, it is similar to paying actors and for other things in movie production. Special effects studios are paid that money to generate them for the movies. Those expenses cover the salaries, profits, software development costs and the equipment needed (expensive computers and servers etc) that these studios maintain. In total, it might take thousands to tens of thousands of person hours of labor to craft the SFX and each hour might cost hundreds of dollars.

It goes to pay for the people and companies to make and execute the effects, the materials used to make the effects (practical effects), the software and hardware used (for CGI), manager salaries, executive salaries, company profits etc.

Think of it in terms of billable hours. If you had a staff of 100 people billed out at $100 an hour for a year, that would come out to around $21 million. Now think if you had a bigger staff, plus billing out computer time, executive time, etc…

The “price” of making a movie doesn’t really reflect the “cost” of making a movie. It’s a lot of funny money.