Over the past dozen years the cost of making games has skyrocketed. Mass market games can cost 10-30 million dollars. While sales has grown very well, it hasn't kept pace. Even the price of a game to the consumer has remained the same in real cost.
The following chart compares the average cost of developing a mass market titles (in millions) versus industry sales (taken/projected from various sources):
The result is that the ratio of hits per titles developed needed to maintain a profit has dropped. How many $10 million failures can a hit really pay for?
If this trend continues the industry for mass market games, will no longer be sustainable. How do we avoid this?
- Increase market size
- We've been talking about this for years. Games that appeal to a larger audience than the core gamers. Nintendo has been doing this fairly well on the Wii. Their only limit is making enough hardware!
- Increase prices of games
- Not going to happen. There are too many alternatives for our market to spend their money and the rental market is already an example of the push back on prices by consumers.
- Low cost games / online distribution
- This model is growing slowly. It's not a short term (5-10 year) solution.
- Reduce cost & risk of mass market games
- This has been a main focus of developers and publishers for awhile. Unfortunately this has led to reduced quality (shorter gameplay, more derivative titles and less innovation). Outsourcing, once seen a major area of saving, turns out to not save much cost. This has also raised discussion of improved development and production methodologies such as agile.