Rising game production costs killing developers. From Pac-Man’s $100,000 to PS3 average game costs of $15 million!
The European Games Developer Federation (EGDF) has big concerns about the game industry. With profit margins so tight, the line between survival and failure can rest on the sales from just one Christmas. The fear is that many companies will simply not survive the festive period. “It is not unlikely that after Christmas, we may find there are some casualties,” says EGDF chairman Fred Hasson.
The BBC reports that back in 1982, the Japanese company Namco produced Pacman for $100,000. Now, the average PlayStation 3 title is estimated to cost $15 million! Even after adjusting for inflation (Pac-Man would be about $215,000), that is still a significant rise. Blockbuster games like Halo 3 even cost Microsoft an estimated $30 million to produce, with millions more spent on marketing.
While production costs have tripled in recent years with the introduction of next-gen consoles, sales and revenue have hardly changed. This means that for many of the smaller games companies, staying profitable is a serious issue.
One such company is Blitz Games, based in Leamington Spa in the UK. Its founder and chief executive, Philip Oliver, says it’s a battle to control spiraling costs. To quote:
“These costs have risen so sharply because of the complexity of the devices which we are writing the games for. The costs have risen most sharply on the graphics side. We have entered a new era of high-definition video gaming. This has led to team sizes having to increase in this area, for new tools to be created for this and generally the costs are rocketing. This is actually having a severe hit on the industry.”
