Why Do Games Cost So Much To Make? - AAA Game Budgets - Extra Credits

Let's talk numbers: marketing, office space, dev tool licenses, voice actors, and more that goes into the average AAA game budget. Why do some games never turn a profit while others seem to magically make it work on the cheapest budget possible?
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♪ Intro Music: "Penguin Cap" by CarboHydroM

♪ Outro Music: “High Tide” by FoxyPanda

[extrahistory]

There's no such thing as a one-size-fits-all budget when it comes to the vast world of AAA games, but let's take a look at the most typical costs and see where game studios can cut corners--and where they absolutely can't, and why.

[cw]

It's hilarious when small studios or indie teams make games that are so much more fun to play with a small, small fraction of the AAA budget.

[AsherReigns]

If the game industry was as open about their budget as the movie industry we’d be seeing a different conversation.

[guyrainey]

For as big and as long as it took to develop, Breath of the Wild only needed to sell 2 million units to make its budget back. And it was the most expensive game Nintendo has ever made.

[KingsandGenerals]

The problem is the same across all industries. The movie industry is as bloated and slowly but surely becomes less profitable. The bubble will burst. The costs need to be brought down or the gaming industry has no future.
EDIT. The biggest problem is the lack of customers. There are too many games that I would love to play, but I don't have enough time. 10 years ago fewer games competed for my attention. Obviously, I stopped buying. So, I think, current model cannot sustain itself. There either will be a new big market for the Western AAA game (China?) or many companies will just stop producing so many yearly titles. And that is a good thing.

[IndigoRose]

The whole debate about the cost of game development always feels like two people completely talking past one another. On one side, you have consumers saying they are unwilling to pay, or, increasingly, cannot even afford to pay more for games. We have consumers saying they are unwilling to purchase games that contain predatory monetization schemes or that gate content behind microtransactions. Now, some of these people can be pretty toxic and hateful about how they voice those opinions (which is bad, obviously, being angry is fine, but being a jerk is not), but in the end what they're saying is "I am unwilling/unable to purchase games like these in this state at this price".

In response, developers and people like the Extra Credits team say "These games can only exist at this price and in this state. That's the only way they can be profitable enough to make."

The problem is, even if we take that statement at face value, it doesn't actually change anything. If a product doesn't appeal to a consumer, you can't make them change their minds by saying "this is the only way to make this product". It will still be just as unappealing to the consumer. Maybe if you're a popular company you can coast on consumer goodwill for some time, relying on the customer-base to purchase products they otherwise wouldn't because they specifically want to support you, but that sort of goodwill can only last for so long, and it is rapidly drying out even for previously extremely popular companies like Blizzard (and let's be completely honest here, when it comes to Activision/Blizzard, any customer goodwill was directed entirely at the Blizzard part of the company).

Now, obviously not everyone feels this way about 'AAA' games, because they're still making a profit (and a huge profit at that, judging by the bottom line reported by 'AAA' publishers). But the amount of people who feel dissatisfied with the content, price and monetization of 'AAA' games is steadily increasing, and publishers clearly know it. But they keep trying to solve the problem by telling us there's no other way things could be. They are doubling down on unpopular decisions and practices, and trying to appease the growing dissatisfaction of the consumer base by telling us their hands are tied. And wether that is true or not, it's not a solution, it doesn't help in any way. Those who can't or won't buy these games won't change their minds unless the games themselves change into something they consider to be worth buying.

TLDR: Saying games 'need' to be more expensive doesn't actually make consumers any more willing to pay more for them, and if the growing trend of consumer dissatisfaction continues, the 'AAA' industry only has two real options. Change, or collapse.

[datas_cat]

I don't think I've ever purchased a game because a specific voice actor was cast...

[playererror]

Why do I get the feeling that even if you could reduce the budget drastically you would probably still get games with transactions and loot boxes in them, Don't want to sound like a paranoid jerk (I literally do not care for most AAA releases, just not my thing) But somehow I doubt that publishers would get rid of ways of making extra money... Just a suspicion though.

[CSDragon]

Andromeda is a really bad example. The issue wasn't that the graphics were bad, the issue was that the animation was actually broken.
If you gave it the graphics level of ME1 and fixed the animation, it would look better. Because the graphics level wasn't the problem.

[treekid]

because of marketing
prime example cod mw2
development cost 50 million
marketing cost 150 million

[KillItAndBurnIt]

What I'm hearing from this is that the AAA gaming scene is basically unsustainable, either due to increasingly ridiculous budgets or increasing consumer contempt?
I'm curious if you're gonna do a video about indie games?

[roenais]

all this video says to me isnt that we need to pay more for AAA games, but that AAA games are going to fail. the industry seems like its inevitably going to collapse, because AAA game standards are higher than what the average consumers budget will allow, but the average consumer won't accept less than high quality.

[nerdyviking]

I understand budgets are tight but when EA can remove microtranactions it says it needs to make money and then tell it's investors it won't be a problem someone is feeding someone a load of bull I'm gonna say it's the consumer

[Nohandlenameforyou]

Speaking as an owner who cannot afford consuls or good PCs I literally cannot play super HD graphics on my machines. I do not want better graphics, just good games.

[reaper]

The main question is even with this being true and the dlc and microtransactions being deemed necessary for a game to be profitable. Why are major publishers reporting record profits to share holders and to not worry about a loss even if dlc was removed?

[doubtcent]

Well that's why all my games these days are indie titles.
AAA games just aren't what they used to be, and their investors who usually have little to do with the industry have made it worse.
Let's go back to independent developers with better games and are more in touch with the individual

[wolfhunter]

I know that this might sound selfish but, as consumers we shouldn't care about how a game is made or how much it costs to make. We are consumers we should only care about the cost to us and the quality of the end product because that's what we deal with. If a game cost a bunch of money to make, but the quality of the game is poor, why should I or any of us as consumers should care about it. You wouldn't buy a shit car for a bunch of money just because the guy selling it payed more to make it.

[Turtlewax]

If costs can't be cut, and the only way to recoup those costs is exploitative business practices that target people with gambling addiction, then maybe it's time for the AAA space to undergo some severe contraction. The loss of competition will hurt the games that get released, but I would rather have fewer super flashy games than have dozens that try to prey on their consumer base.

[DreetenVeelokeetn]

Mixing up standard company running costs with project costs and adding them all up into one “price to make a game” sum. Yeah, I can see this is going to be a thorough discussion...

[AegixDrakan]

The graphics arms race sucks so damn much.

I saw one dude whining that Prey was "Too ugly looking to buy" and I'm like "...What? The hell are you smoking? It looks friggen great."

I mean, I like my pretty graphics and all, but the degree to which it's being taken is getting downright preposterous.

Oh, and by the by, good management can save you insane amounts of money. The studio I'm writing for has done some incredible things with a pretty low budget. And the studio does not believe in crunch time. There's been busy weeks, but never actual crunch. And there are still places where we could be more efficient.