Game Marketing Tips, Analysis, and News

Friday, October 15, 2010

Game Budgets To Rise Even More?

Here's an example of doubling down: The lead producer at Guerrilla, developers of Killzone, feels that game budgets need to increase. It's not enough that publishers are having trouble making money, sales continue to decline for traditional videogames, and other types of games are booming with shorter development cycles and lower price points. You think it should be even harder to make money?

OK, there's still room for AAA titles, but the risk is getting greater. Maybe not for a developer that has an iron-clad contract, but at least for the publisher. And even developers can't really depend on those contracts; just ask the (former) head guys at Infinity Ward. I don't think making life more difficult for publishers is really the answer. Not in a market where Sony just announced that Gran Turismo 5 will be delayed once again; that project must be closing in on $100 million in development, and no revenue to show for it yet. The rumor mill is buzzing about this blog post, wherein the anonymous author claims Bioware's MMORPG Star Wars: The Old Republic is already north of $300 million in development costs, and it is not a good game (amid other rants about Mythic and EA).

Here's a list compiled in February of the highest game budgets (estimated) at that time... and it's already outdated.

1. Grand Theft Auto IV - $100 million
2. Gran Turismo 5 - $80 million
3. Shenmue - $70 million
4. Too Human - $60+ million
5. Metal Gear Solid 4 - $60 million
6. Halo 3 - $55 million
7. APB - $50 million
8. L.A. Noire - $50 million
9. Final Fantasy XII - $48 million
10. Killzone 2 - $45 million

Interesting to note that the producer of one of the titles on that list is arguing for bigger budgets, isn't it?

Yeah, there will be big budget titles, but they'd damn well better be hits, and there will be fewer of them. Meanwhile, the industry has to figure out a way to make hits without spending like Jim Cameron on a new film. More like Zynga's scheme, where you spend a few months in development and reap years of amazing profits. Or something like this, where Lord of the Rings Online has doubled its revenue since moving from a subscription model to free-to-play. And paid subscriptions are up, too.

The game industry's key business models are changing rapidly. The days of endless growth in videogame retail sales ended two years ago, and we are unlikely to go back. This era represents the greatest change in the game industry since the NES revitalized the console market in the 1980's. Smart marketers and developers have already realized this and are planning changes in the way they do business. The others are asking for more money.

No comments:

Post a Comment