Do You Know The Costs that Go Into Making Video Games?

Have you ever wondered what went into the making of that $60 Call of Duty game you’re playing? Well, for one thing, video games cost millions of dollars to create and develop and 2 to 5 years to finish. Rarely do publishers reveal their budgets. But researchers have their ways of ferreting out figures , and here are some speculative information that give us a clue.

Games are informally classified into AAA, in the likes of the hugely popular Grand Theft Auto and Assasin’s Creed, mid-sized (i.e., Divinity: Original Sin 2) and indie, like Minecraft before Microsoft bought it. Classification is loosely based on budget or funding, size of the team, and the length of time it takes to develop the game.

Scot Bayless, a veteran in the video games industry, disagrees with the common notion that hundreds of millions of dollars spent in a game development automatically kicks it up the ladder to AAA status. In his view, triple A games are those that deliver lasting satisfaction and long-term engagement with the players; has the highest levels of visuals and sound, technical performance, art direction and game design; and ranks as one of the top games in volume sold. A solid example is Witcher 3, which had a $80 million funding, including marketing and is one of the top-selling games in recent years.

Generally speaking, AAA games have a budget that is over $50 million. Thus far, the most expensive game developed is Star Wars: The Old Republic, costing a cool $200 million, excluding marketing cost. The cost includes salaries, rent, equipment, insurance and other benefits. A team of 400 to 1,000 people work on these games that take anywhere from 3 to 5 years to create.

Grand Theft Auto V had a development cost of 137 million and a marketing cost of 128 million, totaling 265 million. More than 1,000 people worked on it, across several Rockstar Games Studios.

These include the key developers – programmers, designers, artists, audio workers, quality assurance staff, etc. The marketing team is another segment. GTAV has over 95 million copies sold and a worldwide revenue of more than $6 billion.

Mid-sized studios develop the AA games, those that do not qualify for triple A but are more than indie. These are a dying breed, according to some insiders, either rising to AAA status, going indie, or closing shop. Mid-tier publishers have limited funding resources, so games are developed for a cost in the range of $10 million, with 20 to 40 people working on it in a period of 2 to 3 years.

A surprisingly successful AA game is Hellblade: Senua’s Sacrifice, developed and published by British studio Ninja Theory. In three months, the studio had recouped its expenses and to date, copies sold have reached almost one million.Twenty people were involved in its development that lasted for 3 years. Cost computation based on an article in Kotaku came up to $7.2 million.

Mid-tier and indie studios differ from behemoth publishers in their capitalization. ActiVision, Electronic Arts, and Nintendo have access to millions of dollars to pour into big game development.

Studios with less resources often turn to crowdfunding sites like Kickstarter or enter the OTC markets to seek additional capital from investors.

In the third classification are the games from indie studios. It’s often described as a 12-man team working out of a garage. Indie games are usually the brainchild of one person, development takes a 5-person team, at a cost of less than a million dollars. The first Minecraft was one such, after which its owner, Markus Persson, sold it to Microsoft for $2.5 billion.

The video game industry is strong and alive but competition is tough with so many games being released. Since there’s no predicting how video games fare in the market, it’s a risk that studios are betting on.

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