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Summary:

Console game development can be an expensive, and risky, business. In fact, Gears of War cost $10 million to develop, and it came in on the cheap end. Looking at the cost of getting a game into the hands of consumers and then what gets cut […]

Console game development can be an expensive, and risky, business. In fact, Gears of War cost $10 million to develop, and it came in on the cheap end. Looking at the cost of getting a game into the hands of consumers and then what gets cut out, thanks to this handy 1up link, it’s amazing that games every make a profit at all. That’s where paid content comes in.

According to the latest research from In-Stat, a marketing and research firm, online console revenue should grow at the rate of 46% annually from 2005 to 2010, while handheld gaming could start factoring in this year. With the launch of the two new consoles from Nintendo and Sony, joining the XBox 360 that launched in 2005, over the same 5 year period as before, the annual subscriber rate should be 40.8% while handheld hits a surprising 94.2%. Brian O’Rourke, an In-Stat analyst, had this to say about increases in paid content:

“Sony and Nintendo both launched new online efforts focused on providing paid downloadable content in the form of games from past consoles as well as casual games that will be available for $3 to $15. Meanwhile, Microsoft continued to be the leader in the online console space in 2006, with its announcement of a video and movie download service for the Xbox 360.”

Let’s hope that the content ends up being actual new content from the developers and not just paying to unlock content that should have been included anyway. I’m looking at you, EA and Sony.

  1. Yeah, that’s heartwarming. “Microsoft continues to be the leader in the online console space by offering things that are not at all videogames!”.

    When polled for future plans, an MS spokesperson said “To offset these ever-increasing costs, it’s more important than ever to attract the casual market. We plan to do this by offering them overpriced shit they don’t want and have nothing to do with what they would have bought the console for in the first place.”

    So, let’s see where that breakdown really gets us:
    *25% goes to pay the art and design guys.

    Who, i’m sure, are really happy with how reliant on them everyone is now that “Graphics vs. Gameplay” has obviously worked out in their favor. Did we, the consumer really push that angle ourselves? Yep. That’s why everyone’s so enamored with the Wii and things like Guitar Hero.

    *20% goes to pay the programmers and the engineers. Who would likely have an easier time if they didn’t have to rush into a new generation of consoles for no apparent reason. But, even still, isn’t the 360 supposed to be pretty smooth as far as dev APIs go? So then, is the added cost factored in here or somewhere else? Or just because?

    * 20% goes to your friendly neighborhood retailer. EB / GameStop, whoever.

    Unless it’s a STEAM game, then it just goes right to Valve, but that’s something else. Otherwise, it totally makes sense that the consumer should foot the bill for a situation where the retailer gets the cream. If there’s anything retailers know, it’s that people always buy videogames at the most expensive point instead of waiting a laughably short time until it’s on sale for a reasonable price.

    * 11.5% ($7) goes to a “Console Owner Fee” – ie. whichever one of the Big Boys made your hardware (Sony, MS, Nintendo.)

    And this is totally awesome if you’ve rushed and half-assed your manufacturing process to the point where you make most of your money off of the licensing fee. MS is more reliant than ever on licensing to make up for the losses of the console itself? You don’t say. Wonder if there’s any correlation there between that and $60 games?

    * 7% ($4) goes to marketing, and puts Mad World and Marcus Fenix on MTV.

    We’re paying for that up front now, are we? Because it’s totally awesome to directly pay for the majestic privilege of something we just can’t get enough of these days: advertising. Hey, how much went into buying a place at the SpikeTV awards? Oh, i’m just DYING to know, i’m almost giddy.

    * 5% ($3) goes to “market development” — paying for cardboard Standees of the Gears Crew and elbowing other games out of the way for shelf space at your local retailer.

    Something else i’m absolutely happy to pay for the perpetuation of.

    * 5% ($3) goes to actually manufacturing and packaging the disc.

    That much, huh?

    * 5% ($3) is spent paying the Man for IP licenses or maybe hiring some big name voice actors. If your game isn’t an original IP, here’s where you get dinged by Marvel, Disney, or Ray Liotta’s agent.

    Yeah, but that’s OK. It kind of makes up for the completely silly amount of movies i torrent. What can you say when you gleefully pirate the fuck out of an entertainment sector that charges a lot for very little? Hey, wait a minute…

    * 1.5% (just $1) goes into the publisher’s pocket.

    Bullshit. BulllllllllllSHIT.

    * 1.5% (also $1) goes into the distributor’s pocket.

    This is the only thing that seems reasonable. I don’t know why. I stopped caring 35% ago.

    * 0.3% (about 20 cents) goes into corporate costs. Management, overhead, lawyers, etc.

    Yep, 20 cents per copy sounds about right for those low-cost, almost altruistic departments.

    * 0.05% (less than 3 cents) go into the cost of paying for the Developer’s Hardware. Who knew an SDKs can cost tens of thousands of dollars?

    Yeah, but they’re really cool, which is why developers want to own them for every possible console. It’s a collector thing.

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