Behind the Veil #2: The Color of Money - Diabloii.Net

Behind the Veil #2: The Color of Money


The Color of Money

In the last column, I identified the four main ingredients to successfully designing a computer game: money, intelligent people, a solid design, and strong code. Over the next four columns I will examine each one in detail, before starting on the process of game creation itself. This edition: money.

So how much do you think it costs to make a computer game? Today’s computer games are complex mixtures of graphical eye-candy, music, sound effects, plot, and interface, not to mention the code behind it all. More than that, there are people behind the scenes who make it all happen.

Let’s suppose you pay everyone $50k a year, and take two years to finish your game. Let’s suppose you have one person working in each area of the game, so six people over two years is $600k. Add to this office space, phones, power and water bills, taxes, staplers… the numbers add up. And then you realize that you probably need another 4 people in each department to get the game finished in only two years.

After that, if you’re releasing an online game, you need to buy the servers, bandwidth, hire Customer Support staff, and you need what’s called a “Live Team” to keep the game updated and fresh (a future installment will be all about this team). Remember when I said Sony shells out US$1.5 million a month on Customer Support?

It really surprised me when I discovered how much it would actually cost to make a computer game. Even if most people are working for free, like the company I’m in, the costs are still there; they’re just personal costs instead of company costs. They still add up when you consider gas, wear and tear on your car, the top-of-the-line computer you need to make a really good game, etc.

If you plan to create an MMORPG, and you plan to take two years to finish it, you’re probably going to spend three years and $10 million creating it, and another $5 million launching it. As I mentioned in the last column, the first iteration of Shadowbane was dropped when Take-Two discovered how much it would cost to actually launch the game.

Unfortunately, unless you have people who are willing to make a game for an average wage of nothing, there’s no way out of the super-high cost world of computer game design. The overuse of technology to make games look cool means that if you hope to compete in the market, your game must look at least as good as the games that came before you (I think there’s already a column about this on this site). This means hiring lots of people to do the graphics, and professional graphical engineers are expensive.

So what makes it all worth it? The return on investment. Diablo 2, a game we all know and love, shipped 2 million copies to stores in the first print run, and another 1 million shortly thereafter. If each copy sold to the stores for an average of $30, that’s $90 million returned on what was probably a $5 million investment. Raise your hand if it’s suddenly become clear how they can run battle.net for free…

Now, if you’re making a pay for play game, the numbers are a little different. You need to remember that you’re not selling a game, but a service. It takes an entirely separate team to keep the game interesting after launch, and they have to be paid as well. Costs continue because income continues. Let’s look at some numbers. Assuming it costs $10 a month to play:

Subscribers
100,000
200,000
300,000
400,000
500,000

Monthly Gross Income
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000

Yearly Gross Income
$12,000,000
$24,000,000
$36,000,000
$48,000,000
$60,000,000

Yearly Expenses at 60%
$7,200,000
$14,400,000
$21,600,000
$28,800,000
$36,000,000

Yearly Profit at 60%
$4,800,000
$9,600,000
$14,400,000
$19,200,000
$24,000,000

5-Year Profit at 60%
$24,000,000
$48,000,000
$72,000,000
$96,000,000
$120,000,000

Yearly Expenses at 40%
$4,800,000
$9,600,000
$14,400,000
$19,200,000
$24,000,000

Yearly Profit at 40%
$7,200,000
$14,400,000
$21,600,000
$28,800,000
$36,000,000

5-Year Profit at 40%
$36,000,000
$72,000,000
$108,000,000
$144,000,000
$180,000,000

40% expense may seem like a lot, but it’s what most MMORPGs shoot for. Between Customer Support, the Live Team, power and internet costs, server upgrades, taxes… the costs add up. If you reach that 40% cost rate with 500,000 users though, the profits are pretty remarkable. If you can make it to release, and last through a few years, it’s well worth the time.

The simple truth is that it takes a lot of money to make a good computer game that can compete in today’s market. The money has to come from somewhere, and a later installment will be all about that, but if you can get it then you’re one quarter of the way to the building blocks of your game.

Disclaimer: Behind the Veil was written by Chris Marks and hosted by Diabloii.net. The opinions expressed in these columns are those of the author, and not necessarily those of Diii.net.

Tagged As: | Categories: Retired Columns

Comments

You're not logged in. Register or login to post a comment.