Game Budget

How much will it cost to make a genre-defining hit video game?

The biggest costs are payroll. Video games are built on raw creative talent and hard work.

Calculating the Budget

Budget = Technology + ( Average Salary x Number of Develoeprs + Rent ) x months of development

Technology = Engine License + (Software + Hardware ) x number of developers

For example:

It the game could be developed by 10 people for $2000 a month with a $2000 rent in 2 years: 

Technology=$20,000 + ( Salary=$2000 x 10 developers + Rent=$2000 )=$22000 x 24 months = $244,000

Hit Game Budgets 

Some of the games in the industry:

Grand Theft Auto, World of Warcraft, The Sims: 10-30 million Source

Serious Game Budgets

While not necessarily commercial successes, these serious games achieve their non-profit objectives as training tools: 

A Force More Powerful: 3 million 

America's Army: 2.5 million Source  

Are Game Budgets Too Big?

Article

But the second thing that hampered Dynamic Human’s development remains with us, and shows no signs of disappearing. DH was by far and away the most expensive CD-ROM that EAI made for McGraw, but for all that its budget was about $150,000. Mike Sellberg, who helped oversee the development of DH, tells me he thinks EAI actually spent closer to $500,000 on development. As Mike, now executive vice president and chief technology officer at iMed Studios put it, “Oh yeah, we took a bath on that one.”

At the same time, EAI could easily get more than a million dollars to make games like Barbie Magic Hairstyler or A Bug’s Life. And those budgets are child’s play compared to the $10-$30 million dollar development budgets for major hits like Grand Theft Auto and World of Warcraft.

The market rewards for entertainment content are simply much greater than for educational content, and the result is that there is a lot more enganging content being created for the purposes of entertainment than is being made for education.

Which is fine if you’re a game junkie or a stockholder in Electronic Arts, but it’s more than a little disturbing if you’re a parent or teacher trying to encourage kids to spend more time doing their history homework and less time learning how to be a video assassin.

Content creation for this emerging media is an expensive, time-intensive process, and it is likely to remain so even as the delivery technology exponentially increases in capability and decreases in cost. While the market can help companies raise the tens of millions needed to fund the creation of rich, deeply immersive environments to teach kids how to be theives and pimps, there’s just no way for a for-profit company to raise a similar budget to help create content of a similarly immersive quality to teach World History, Biology or Chemistry.

Which is where drugs come in…

Because there is a similar problem in the development of a different type of intellectual property — drugs. Drug development is exceptionally expensive, and the market does not reward the treating of all diseases equally.

As Victoria Hale, a 2006 MacArthur Fellow and CEO of One World Health, the first not-for-profit drug company, put it in a recent interview with Marketplace:

Pharmaceutical R&D, as I’m sure you know, is extremely expensive. And even the ability to recoup the development costs, let alone bring back revenue beyond that, is in some cases, for some diseases just not possible.

One World Health hopes to address this problem by creating drugs targeted at these diseases that the for-profit companies can’t touch, funding their development through philanthropic contributions of money and IP, combined with revenues from the products it creates, which will be sold in private markets in the developing world.

It’s hard to say whether One World Health will be successful or not, but the idea of creating a company that plays by different funding rules to create worthy products to address needs that the normal market mechanisms can’t address is a good one.

So why not a not-for-profit company built along similar lines to create compelling immersive content for educational purposes?

The analogy is pretty tight. Ignorance is the disease the game market can’t reach, immersive content the expensive but potentially effective cure that game companies can’t afford to create. Donations of IP could include gaming engines, development tools, as well as licenses to characters and concepts from popular culture - like the characters from CSI or the imaginative and popular world of Jurrassic Park. The immersive products could be sold to individuals, teachers, schools, districts for use on PC’s or Playstations or whatever delivery vehicles the future brings.

Any investors out there?

—http://asuutoblog.net/2006/10/09/grand-theft-auto/