Should Video Game Publishers Reveal Development Costs?Video game publishers love comparing the industry to Hollywood, particularly when it comes to cinematic cut scenes, voice actors and first day totals. Sega, for instance, famously announced that hardware and software sales for its ill-fated 1999 console, the Dreamcast, exceeded first day ticket sales of George Lucas’ Star Wars Episode I: The Phantom Menace over the first 24 hours.
Despite this self-directed praise, companies often neglect to inform consumers how much it costs to make games on a regular basis. Some do, yet none go a step further in breaking down where the money goes. For the most part, prices continue to rise, with the expectation that players will continue to pay.
This runs contrary to Hollywood, which reports exactly how much dough was used to make everything, from low budget indie films to summer blockbusters. Thus begins a careful analysis by casual and diehard fans to see whether X movie made back that money and then some.
"Publishers don't reveal costs because the truth is that most still invest way too little in their titles and just try to work the teams harder." -Ed Del Castillo
In fact, it doesn’t take long to locate figures. In less than ten seconds, we discovered that Harry Potter and the Deathly Hallows: Part 2 cost an estimated $125 million and made a worldwide gross of $1.3 billion as of December 2011. If only we could do the same for games.
This ultimately begs the question, should companies reveal costs for every game?
“I am strongly in favor of more transparency in regards to cost and profitability,” said Emeric Thoa, The Game Bakers’ creative director. “Publishers want to manage their brand image and stock value, and they only give figures when they make groundbreaking sales.”
Ed Del Castillo, president of Liquid Entertainment agrees.
“[Publishers] don't reveal costs because the truth is that most still invest way too little in their titles and just try to work the teams harder. Publishers don't want you to know that they allocated 25 percent of the budget for God of War. It would make it almost too obvious which games to buy because, like movies, bigger budgets typically mean better products. If we could make this happen, you would see a massive restructuring of publishers and a gross improvement in the quality of games, not to mention quality of life for both traditional and mobile developers.”
Taking this a step further, YoYo Games’ head of publishing, Stuart Poole, sees educational value in releasing this data.
“Consumers should get more knowledge on how the industry works and the amount of risk there is in making a video game. Most games don't cover their costs, and with piracy thrown into the mix, many games end up losing money. I think if more people understood this, it would help them understand the pricing.”
Doing this could help justify the cost of a particular game, where a person may willingly spend more than ten dollars on an iPhone or iPad title if he or she knew how much a developer/publisher invested.
Not so, said Paul O’Connor, brand director for Appy Entertainment.
“The only justification a gamer requires to buy a game is whether or not the game is fun to play,” he said. “Cost of production doesn't enter into it. I saw several movies this past summer and I don't know how much they cost to make, nor did the ticket price I paid vary with the cost of production. I went because I thought I'd like those movies, not because of how much the producers spent on hairdressers and craft services.”
O’Connor wasn’t alone in feeling this way.
“When you go to the movies,” said Corey Redlien, studio director at Wandake Games, “you don't necessarily care how much it costs to make. Avatar is still Dances With Wolves in space regardless of how much James Cameron spent on it.”
Valid point, but most hardcore fans would take interest in where the money goes, yes? There would have to be a group of people, however small, just waiting to obsess over numbers.
“Consumers don’t care what the content costs. They care about the experience,” said Jamie Ottilie, CEO of Galaxy Pest Control. “An inexpensive game to build like Cut the Rope can easily generate as much interest from gamers as an expensive game like Infinity Blade.”
“I don't think the budget should be a reason for a player to buy a game at a higher price,” said Thoa. “The content of the game should be the reason for a higher price. The problem on the App Store is not the price, it is the visibility. There is so much content on the App Store that there is no reason to pay $10 for a game if it has the same content as a $1 app, but if you make a game that has a bigger scope with a bigger price, right now it has little chance to get noticed.”
Joseph M. Trinagli, 5th Cell’s general manager chimed in.
“I don’t believe the customer would be more sympathetic to various pricing models if they knew how much the game cost to make. Consumers tend to judge value based on what they get out of it.”
To that point, Mediatonic’s co-founder, Paul Croft, was the most blunt.
“Most consumers don't care about how much something cost to make. They only care how much it costs them.”
At the same time, some that we questioned were quick to point out that publishers make figures readily available.
“This is already happening on AAA console games and even some iOS titles,” said Ottilie. “Read the press for Infinity Blade or the latest iteration of Call of Duty, and you’re bound to find budget estimates and maybe even the actual marketing spend.”
That said, we doubt many casual players would put down Words With Friends or Kinect Sports: Season 2 to look up development figures, for the same reason they disregard interviews or studio profiles, and that’s fine.
Conversely, there’s no doubt that some would take great interest in knowing the total cost for each title, and also the individual cost breakdown. It may explain, for instance, why the tank mission in Gears of War 2 (you know, the one with the ice) was subpar.
That’s probably taking things a bit far. At the same time, we think this info would become yet another set of numbers to obsess over, similar to stock prices and units sold.
Just think about how this could apply to the worst games on the shelf.
They spent two million bucks on what?
