What's Killing the Video-Game Business?

[Onkel Neal]

What's Killing the Video-Game Business?

Games weren't always expensive to make: In the early days, a boy with an Apple II could rule the world. While there are still scads of cheaply made games on the market, all of today's big publishers employ hundreds of professional developers per game. These projects take years to complete, as each new generation of hardware allows for unprecedented advances in graphics, sound, and everything else. The greater the complexity of the game, the larger the development team. The larger the development team, the bigger the budget.

While industry leaders anticipated that budgets would creep higher, the shift to high-definition gaming with Microsoft's Xbox 360 and Sony's PlayStation 3 has proved to be more expensive than estimated. At a conference in the spring of 2006, then-Midway developer Cyrus Lum sounded the warning, telling his audience that game development budgets could rise as high as $15 million to $25 million for a single title—previously unheard-of averages. "We need to rethink how we're financing games," Lum concluded.

Yikes, $15 million, that's 200 people at $75,000 each. I don't claim to know what it takes to make a game but, wowee, that's a lot of people.

it cost Rockstar $100 million to produce, 1,000 people worked on the project

A thousand people??