Video Game Budgets: What’s Going On?

A few weeks back, I read an article with EA head honcho, Frank Gibeau. And one statement especially jumped out to me:

“In general we’re thinking about how we make this a more broadly appealing franchise, because ultimately you need to get to audience sizes of around five million to really continue to invest in an IP like Dead Space. Anything less than that and it becomes quite difficult financially given how expensive it is to make games and market them. We feel good about that growth but we have to be very paranoid about making sure we don’t change the experience so much that we lose the fanbase.”

This strikes me as odd and flat out preposterous.  I’ve always been curious about video game budgets.  They just keep growing and growing.   I’ve tried poking around for a few detailed breakdowns with no avail.  But something is not adding up.  These budgets run more than many Hollywood movies.  That alone is crazy.  Once all the costs for licensing, royalty fees, art, QA, post release support and all that is factored in, you’re already looking at pretty chunk of change.  And don’t forget marketing / PR, that alone is sometimes more than the cost of the game itself.  Talk about outrageous, but we’ll save that topic for another time.  In the end, the budget for a standard console/PC game shouldn’t run more than a few million.  So where are they coming up with these inane figures like $25-$100 million?  And what kind of metrics ans analysis are they doing that indicates the need for so many buyers to justify a franchise.  In fact, I’d really like to see a case study detailing video game production costs & sales in contrast to other industries particularly movies and other technologies (laptop, mobiles, etc.).   I realize that sometimes there is a price to be paid for quality; but worth 500 million users?  I highly doubt that.   Again, something is NOT adding up.

The sad but current state of video game budgets

And is it really necessary?  The need to appeal to a broader audience is just a systemic of business in general.  But many franchises, and games in general, are starting to suffer with dwindling sales month over month.  Typically these days, a standard AAA game starts out as a first person shooter (FPS) built on an Unreal Engine with a tacked on gimmicky multiplayer mode.  And now it seems, they’ll be more co-op.  I, personally, love co-op mode; but it seems that co-op today translate more into action shooter.   That aside, including all these features quickly add up to a pretty penny.  But do these companies even considered if it’s germane to the business or the final product itself ?  Why does a game such as Dead Space and Assassin’s Creed need MP modes?  TellTale is already making a phenomenal Walking Dead game, is it really necessary for Activision to make one as well (which, surprise surprise, will be a FPS)?  To me, it seems like a massive waste time and resources  when they would be better off capitalizing on different markets. Do they really think they’re gonna capture that many more gamers with such a such a commonplace format?  I’m not saying they should ignore these kind of opportunities.  You never know what could happen.  Case in point, I thought adding MP to Mass Effect 3 would be a colossal failure.  But it turned out to be a massive success.  So I’m all for trying new ideas, just maybe in a different manner.  In fact, I’d love to see the numbers around these figures.  It may be worth holding off some new features as optional DLC only to be included in future installments based on a scale of their popularity.

But even if that were the case, it still doesn’t account for the absorbent budgets.  Countless indie developers have found marginal to great success producing games on a shoestring budget.  Why don’t major publishers release smaller titles in a similar manner more often?  Everyone wants to produce the next biggest hit, but wouldn’t it be more prudent to release a string of lower budget titles to help back bigger releases?  Movie studios release generic romcoms (romantic comedies) and other low budget clunkers all the time.  That’s possible because studios know there’s a market out there willing watch them.  Even though movies and games are two different monsters, studios should know there’s a similar (huge) contingent of gamers that’d like low budget title.  Low budget titles doesn’t mean low quality.  If you need proof of that, look no further than the countless indie developers and other standard titles that have found great success with not even a 1% of the budget.  Just like mindless popcorn flicks, sometimes all a gamer wants is just a regular game, not an over-produced blockbuster.  But game studios are very risk adverse.  The common excuse is that the physical production and release costs is not worth it, especially if it flops.  That and they’re pushing gaming more to the digital front.  Regardless of the chosen avenue, companies are missing out on a sizable potential market.  They already have a dedicated segment of gamers on lock (and potentially more).  Gamers like me aren’t going anywhere.  This is no excuse for developers to become complacent and produce cookie cutter crap.  But it could allow studios and developers more opportunities to take new risks.

All said and done, something needs to happen with the heavy imbalance between budgets and the decreasing sales.  I sure as hell don’t have all the answers but based on declining sales, the business aren’t just as clueless in some ways.  Right now, there are more than a few lucrative opportunities and markets the game industry capitalize on they’re just ignoring or frankly how no clue how to.  But I just hate seeing the traditional console market suffer from their inability to stick to basics and not take advantage of an already, dedicated fan base.  Like the saying goes: if it ain’t broke, don’t fix it.   And right now, there’s too much fixing going on.

What do you think people?

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