The value of a game – how much does it cost to make a game?
People often tell me how much they think a game costs to make. Generally speaking, they’re out by an order of magnitude, so here’s a small post to give you the secret game developers use when sorting out a budget.
The quick answer is ($$$ = T x M x 10k) or Cost ($$$) = Time (T) times (Man Months) x $10k (the usual fully loaded cost per man month).
This number is derived from the standard industry costings, which come out to $10k per man month fully loaded. What does fully loaded mean? It means that the number includes everything involved in paying for the person – wages, software, rent, depreciation on desks, margin, etc. Anytime people in the industry need to work out a back of the envelope budget calculation, 10k per man month is the figure they use.
The upside of this is that it makes it extremely simple to calculate game budgets (at least ballpark). Some teams cost more (I’ve heard that the general fully loaded rate of an internal Microsoft employee approaches $20k) and some cost less (I’ve heard Sony will fund PSN games at $6.5k per man month, but no higher without internal review) but nonetheless it works out nicely as a rule of thumb.
The next step is to work out how long the game took to develop – which can be the tricky part. Often the first you hear about a game is when it announces – and it may well have been in development for years before then. Sometimes you’ll hear people in interviews outline how long development was, and you should be able to work out rough dates from digging around online. Once you’ve spent long enough in the industry you can generally eyeball a project and get a sense of how long it’s been in development for.
Once you have a total development time, you need to work out how many people are on the project. The easiest way to do this is via the credits (on MobyGames generally) – where credits exist. Otherwise you have to (again) do a bit more investigation. When you’re looking at credits, you want to focus on actual developers – not the publishers, voice actors, third party tool developers, etc.
With this in hand, you’ll have a rough number that represents development costs. It won’t be exact, but it’ll be in right ballpark and certainly enough to help you call bullshit when someone on the internet says “GTA4 only cost $10 million to make!” or “Angry Birds cost over $900k!” – you’ll be able to tell pretty quickly when people are way out of line.
By the way, this is also incredibly useful for transmedia people who would like to know how much it would cost to produce a game concept. Is your game just like Zelda64? From Moby Games we can see that there were 64 people working on it – first screen shots showed up in 1995 (and game was complete in 1998) so we’ll say 36 months development (quite probably a bit before that, but we’ll call it there). That means 36 x 64 x 10 = 23 Million – an astronomical number for the time (although that’s in todays money, not 1998 when the man month rate would have been lower – $17 million approx corrected for inflation).
Now, there are a bunch of ways in which these numbers are wrong. It doesn’t take publisher costs and marketing into account (which can range from a 20-100% increase in costs) and it also doesn’t account for the fact that teams generally run much smaller at the start than they do at the end. If you wanted to improve your figures, you could cost each 1/4 of development differently – assume the first is 25% loaded, the second 50%, the third 75% and the last 100% to account for the fact that every game has a finishing push. In other words, you can change the formula to ($$$ = T x M x 10k x 0.625) – but that gets fiddly and starts to get away from the elegance of a quick, fast, dirty way to calculate game expenses.
Edit : It’s been brought to my attention that current rates tend more towards $12.5k for 3rd party developers and $15-20k for publisher owned developers. Adjust your calculations accordingly!
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