Red Steel development costs might surprise you
by David Hinkle 
{ Jul 26th 2006 at 12:30PM }
A French news site is reporting that the biggest third-party title for the Wii, Red Steel, will incur costs of around 10 million Euros in development. Now, for you American folks, that's roughly 12.65 million buckaroos. It may seem like a lot, but in the grand scheme of things, it isn't that big of a deal.Think about development costs for both the Xbox 360 and PS3. Imagine if this game was being developed on either of those systems, we could easily see that doubled (maybe even tripled in the case of the PS3), due to excessive costs associated with creating those photo-realistic HD graphics. Also, this game has been in development for under a year and will launch with the console during the fourth quarter of this year, which again would make costs rise significantly would it be made for the other two systems, as even more man power would have to be dedicated to pushing the game out on time.
Now, if the development cycle were a little longer, say 2-3 years, we'd see a significant drop in the development cost, but as it stands now, should this figure be correct, $12.65 million US is not that much money to produce a AAA title.
[Via Zogdog Forums; Thanks Danger-P!]
Reader Comments (Page 1 of 1)
Dracula Jones @ Jul 26th 2006 12:53PM
Welllll, let's see if it actually turns out to be a AAA title. I remain skeptical after the hands-on E3 reviews.
vidGuy @ Jul 26th 2006 1:06PM
This game has the potential to sell 500,000 or 1,000,000 copies, if its tweaked up and delivers what it says it will.
That's $25,000,000 to $50,000,000. While $13 mil is a chunk of change, the possible benefit is significant enough to warrant the risk.
I'd expect most full-sized games on the Wii to cost about $5 to $10 million to develop. Of course, that beats out the likely $20 to $50 million to develop for other systems.
I'm crossing my fingers. If I see that they've improved on the control, I'll be buying it at launch, like I'm sure many other Wii owners will.
vidGuy @ Jul 26th 2006 1:10PM
And yes, I know not all of the $50 price tag goes to the developer, and yes I'm just guessing at PS3 and 360 development costs for the biggest games (I bet Halo 3's cost is way up there)... but my point still stands.
Red Steel could be a huge hit. It looks great to play.
student @ Jul 26th 2006 1:23PM
I'm curious to have more of a frame of reference. I wonder if we can hear how much any other titles (for all next gen systems) cost to develop.
Loban @ Jul 26th 2006 2:23PM
This game looks like it could be good, but then again I wouldn't be surprised if it wasn't. But it will sell regardless just because it's a launch title.
Spaz @ Jul 26th 2006 3:19PM
This is an interesting point, and one Nintendo certainly had in mind when going with a "simpler" console than its competitors. Frankly, it's a pretty sound business decision. If a developer only has to sell 300,000 copies to turn a profit (instead of selling at Halo-level, 2 Million in a month proportions), who do you think they're going to want to develop for?
Isaac Klavsky @ Jul 26th 2006 5:04PM
Meaning its more profitable to make a bad game that won't sell much. That's not a great philosophy, but it can also create a lot of genre diversity and developer interest.
Spaz @ Jul 26th 2006 5:31PM
Well, I'm pretty sure their philosophy isn't to make "bad games that won't sell much", but to make (as you say) games with a lot of genre diversity. There's not as much of a risk doing a "different" sort of game (say, Animal Crossing or Chibi-Robo) when a failure at the register won't mean huge losses. It's definitely MOST profitable to make a good game that sells tons, so I think that's generally the aim of any developer.
Duscrom @ Jul 26th 2006 6:10PM
You have a point. I read on Wikipedia that the PS3 and Xbox 360 won't run unless there are AT LEAST 15 million polys on screen at once. Textures... there must be AT LEAST 300 MB of COMPRESSED textures on the screen before the system will even work.
On the Wii they don't have to do that, since the console dosen't have steep requirements to run. It's not like the Wii allows a developer to be lazy and not put work into the games visuals and sound and stuff.
SuicideNinja @ Jul 26th 2006 6:23PM
If I remember correctly from a previous article, Publishers were complaining that development costs for a game are getting to be around 20-25 million. It had something to do with the costs of Next Gen development rising, so the game prices went up $10 [or more] for the consumer.
In comparison to those numbers, 13 million is cheap.
vidGuy @ Jul 26th 2006 7:37PM
"7. Meaning its more profitable to make a bad game that won't sell much. That's not a great philosophy, but it can also create a lot of genre diversity and developer interest.
Posted at 5:04PM on Jul 26th 2006 by Isaac Klavsky "
I don't know about that. You are assuming that games that are cheaper to make are "bad". Just because a game didn't cost $30 million doesn't mean it'll flop, and just because a game DOES cost $30 million doesn't mean it'll be a hit.
Let's use Spaz's figure of 300k sold before the developer turns a profit. Let's estimate that out of every $50 game sold, $25 goes to the developer. I have no idea how close that is to the true numbers, but that would be $7,500,000. Now seven and a half mil isn't a lot to drop on game development, but it isn't chump change either. It would be a very low risk, though, compared to developing a game that costs $30,000,000 and requiring (by these estimates) 1.2 million copies sold to BREAK EVEN.
So, how many of those 30 million dollar games can a company afford to churn out? If they're selling like Halo, GTA, or Zelda, plenty, because they are making tens of millions in profit. But what if the game is a flop? The most likely answer is 'just that one'.
So for a developer entering a market, a cheaper developing cost is very attractive because it carries much less risk. Once the developer gets established in the market it can start to create bigger budget titles.
And as I said, developing cost doesn't equate to quality. The whole point of this news is that the Wii is supposedly easier to program - thus making it less costly - than its competitors (regardless of what Nintendo says in its PR, the Wii is competiting with the 360 and PS3). If Red Steel cost $13 million to make on the Wii, maybe it would have cost $20 million to make on the 360. Based on the numbers we are using as estimates, that would require an additional 280,000 copies to be sold of the 360 version than the Wii version would need to break even.
All in all, the Wii will attract many developers, some of which will make big-budget, blockbuster games and some of which will spend less than a million creating their work. But more games equals more fun, and it's been shown to be the winning blow in the console war. Lower development costs will only benefit Wii.
boots @ Jul 26th 2006 9:19PM
What? How stupid is this? And they consider Wii "cheap"? I thought they said it was going to cost *less* than the gamecube to produce. Read this:
http://www.igniq.com/2005/08/report-cost-to-create-xbox-game-182.html
Costs multiplied by 10 then? Yeah right. So either Nintendo is bullshitting about how they are "cheap to develop for" (even when their hardware is way below next-gen standards).
Cheap, my ass. I don't care how much PS3 and X360 cost to develop for, Wii costs a similar amount even when it has inferior specs.
Artefacto @ Jul 26th 2006 10:27PM
Wow! 12 million is very expensive.
Considering that it is a next-gen game it reasonable.
Just imagine: if the dev-costs for Wii are about 10 million dollars, then the PS3 and XBX360 must be waaay higher.
For comparison, here are the current generation dev-costs (source: gamespot)
The full development figure table released by CESA is below.
Platform - average development cost / number of titles used for calculation
Xbox - 202 million yen ($1.8 million) / 13 titles
PlayStation 2 - 96 million yen ($877,634) / 194 titles
GameCube - 90 million yen ($822,857) / 11 titles
PlayStation Portable - 90 million yen ($822,857) / 6 titles
PlayStation - 80 million yen ($731,429) / 1 title
Game Boy Advance - 53 million yen ($484,571) / 47 titles
DS - 37 million yen ($338,286) / 3 titles
Dreamcast - 25 million yen ($228,571) / 2 titles
vidGuy @ Jul 27th 2006 12:07AM
"even when their hardware is way below next-gen standards"
What specs are you looking at? The RUMORED specs put the Wii at nearly double the power of the XBOX, which means Wii is most definitely next-gen material.
"I don't care how much PS3 and X360 cost to develop for"
Well developers care. Say that figure's right and the average XBOX game cost less than $2 million to develop. What would you rather do, jump to $5 to $15 million, jump to $20 or $25 million, or drop out of the business?
Plus, you are missing two things here: 1) this is still a rumor and 2) "biggest third-party title" could also be construed as the most expensive. Mario and Zelda likely cost $10 or $15 million to make, but not Wii Sports. You aren't going to need to spend $10+ million to make a game for Wii. The other two systems? Who knows.
JadedMason @ Jul 27th 2006 1:17PM
I'm all for fanboyism on a fanboy site, but let's backup some of this stuff with some solid references. It is entirely too easy to make the claim that the game would cost more without backing it up with some form of comparison. Give us some backbone for this claim. How much have similar games cost to develop on the XBox 360 and PS3? Do we even know?
Good work on researching the cost of a Wii game, but lets follow-up with some solid research on our competitors before slinging some mud.
epobirs @ Jul 27th 2006 7:07PM
David, I'm having difficulty why you would expect any great reduction in development costs from a multi-year development cycle. Every passing month incurs costs that must be billed to the project. Time is money and burn rates matter.
These can be as simple as the power bill for the building where the team operates. Lights, AC/heating, workstations, etc. can add up to thousands of dollars a month just for that most basic of needs but the project is dead without it.
While some project members may have lump sum contracts or back end payments, a lot of the crew are going to be salaried or hourly employees whose wages keep driving up the project total budget as it drags on.
Chances are if a project has such a lengthy duration it was either overambitious at the start or had some ideas not work and have to be scrapped, then start over. Sometimes the only thing that keeps it afloat is to change venues. Microsoft twas the original financial backer and intended publisher of Psychonauts but the games went horribly past schedule and Mcirosoft had to give up and take a write-off on their investment. Majesco thought they'd gotten a great deal by picking up the tab to complete the project and publish it but we know how that turned out.
boots @ Jul 30th 2006 6:15AM
Well vidGuy, I didn't assume this was the average Wii title. However, we don't know anyway. This might be the average, or not. The average cost of a PS3 game might also be lower than we think, and the highest could be 30 million (ör is that the average? I doubt it).
Anyway, comparing those budgets to hollywood movies sounds like they are small, but the audience is much smaller anyway.
Joystiq and its sister blogs should do some research about *why* games cost that much (as in detailed numbers about costs), and not simply how much they cost.