inXile: AA development costs have went from $5-$6 million in 2012 to $15-$20 million today

Nirolak · Nov 19, 2018

I wanted to split this off from the rest of the Brian Fargo interview because I thought it was worth it's own discussion.

It also fits with the sea of AA developers lining up to be acquired over the past 3-5 years.

Eurogamer said:
It's interesting if you think about 2012, when the crowdfunding revolution happened. You had myself and Double Fine and Obsidian shortly thereafter - and even Larian [Studios] for that matter. The budgets back then were $5m, $6m, so we'd raise $3m from Kickstarter, maybe do another couple of million in Early Access, throw in some more of our money, and you'd be pretty close to having your costs covered.

But since then, the category of what we all consider to be double-A has raised from $15m to $20m in that short period of time. The landscape has changed greatly since then.

Source: https://www.eurogamer.net/articles/2018-11-19-inxile-acquired-by-microsoft-the-interview

gundamkyoukai · Nov 19, 2018

Make sense 5 million can't really do much into day market even at AA level.

Deleted member 9306 · Nov 19, 2018

I guess also this might be why a lot of kick starters had to get more money in addition to the initial 2-3 million.

Also, I think this is good to keep in mind when people complain about expensive games. Games cost a LOT to create nowadays, even little ones, hence the seemingly "high" prices.

Etain · Nov 19, 2018

I'm kind of curious where the money gets directed, or if perhaps service costs have gone up so it isn't as viable to crowdfund for their games since the money that can be raised didn't go up the same way.

Argh, it is kind of frustrating how it keeps rising for everyone, even on the lower end. Especially on the lower end.

Nuclear Muffin · Nov 19, 2018

He's right. A few years back, you could've made a much more well developed game than Yooka Laylee on $5 million.

Now? $5 million gets you hardly anything.

Heckler456 · Nov 19, 2018

Eusis said:
I'm kind of curious where the money gets directed, or if perhaps service costs have gone up so it isn't as viable to crowdfund for their games since the money that can be raised didn't go up the same way.

Argh, it is kind of frustrating how it keeps rising for everyone, even on the lower end. Especially on the lower end.

I think you just need more people, or the same amount of people for a longer period of time.

Etain · Nov 19, 2018

Heckler456 said:
I think you just need more people, or the same amount of people for a longer period of time.

I think I'd count that as services then. I'm probably going to need to find resources that explain how development changed the last decade.

Rodjer · Nov 19, 2018

And people are questioning these acquisitions, even if the AA games are ""cheap"" compared to AAA, 10-20 million USD is still a big chunk of money for Indipendent developers.

rokkerkory · Nov 19, 2018

15-20m for AA game? That's not bad actually... but no wonder they needed MS' support

Nirolak · Nov 19, 2018

Eusis said:
I'm kind of curious where the money gets directed, or if perhaps service costs have gone up so it isn't as viable to crowdfund for their games since the money that can be raised didn't go up the same way.

Argh, it is kind of frustrating how it keeps rising for everyone, even on the lower end. Especially on the lower end.

It's generally just staffing costs. Wages go up over time, and the number of people you need to make games of the scope, graphical fidelity, and quality that will actually sell each year gets higher and higher.

Compare something like Vermintide 2 to Payday 1 in the Left 4 Dead genre, and the jump is tremendous.

Baby Bird · Nov 19, 2018

And we'll probably have a new generation of consoles launching in a little more than 1 year, so it's not gonna get any better.

Aokiji · Nov 19, 2018

this stuck out to me as well when reading the interview Nirolak
i honestly don't know how this will jump again next gen when gamers will be expecting massive production values unless your game is
A) retro
B) stylized

Rodjer · Nov 19, 2018

Aokiji said:
this stuck out to me as well when reading the interview Nirolak
i honestly don't know how this will jump again next gen when gamers will be expecting massive production values unless your game is
A) retro
B) stylized

I think the AA games will still exist but only under publishers, games from THQ Nordic and Focus Home are "AA" and they are doing decently.

Instro · Nov 19, 2018

The quote doesn't really make sense. He says the budgets for AA games went from 15m to 20m in the time span, not that budgets rose from 5m to 15m-20m. Maybe they didn't consider their 2012 era offerings as AA?

Nirolak · Nov 19, 2018

Instro said:
The quote doesn't really make sense. He says the budgets for AA games went from 15m to 20m in the time span, not that budgets rose from 5m to 15m-20m. Maybe they didn't consider their 2012 era offerings as AA?

I think he garble mouthed that, because he's been saying AA budgets have doubled or tripled a lot recently, so I think that "from" is supposed to be a "to" in that last quote.

Usually those interviews were about huge budget leaps for inXile, Obsidian, and Larian games.

Luckett_X · Nov 19, 2018

San Fran, LA and California rents ain't cheap.

Deleted member 5167 · Nov 19, 2018

Previous generational expenses have been anticpated to double prior to a generational transition. and then in reality be more like triple, so its interesting to see a confirmation that this happened this generation too, when discussion of rising costs constantly sees people incredulous that it happens citing things like middleware as big cost savers, rather than cost controls.

Seems pretty likely this will happen again with the next transition.

iiicon · Nov 19, 2018

That explains the decline in mid-level studios turning to Kickstarter over the last few years (and the existence of Fig as a way to attract more VC to even out development costs).

I wonder what that means for the future of companies like Fullbright. Obviously a Valve isn't going to step in and buy all these devs.

FlintSpace · Nov 19, 2018

How much we think was Hellblade production cost ?

Welfare · Nov 19, 2018

Yup, costs are going up.

Microsoft will most likely be giving them between $25M-$30M for their games if they stick to AA development.

Nirolak · Nov 19, 2018

Aokiji said:
this stuck out to me as well when reading the interview Nirolak
i honestly don't know how this will jump again next gen when gamers will be expecting massive production values unless your game is
A) retro
B) stylized

Usually cost ramp slows down a bit for a category eventually (see how Horror movies are budgeted, or how big films often stick to $200 million), but yeah, I don't think we're there yet.

That said, it's hard to imagine $30 games with $60 million budgets, so I think we'll see them work on ways to make AA games look appealing in the $30-$40 million budget range.

Ocean Bones · Nov 19, 2018

Isn't this around the same price Uncharted Drakes fortune ran back in 2007?

Derrick01 · Nov 19, 2018

And to think not even 10 years ago you could make a game as crazy detailed and good looking as uncharted 2 or 3 on a ~30 mil budget lol.

Luckett_X said:
San Fran, LA and California rents ain't cheap.

This definitely plays a big role. These smaller companies (well, that weren't acquired by MS) need to get the hell out of california. It's far too expensive.

Instro · Nov 19, 2018

Nirolak said:
I think he garble mouthed that, because he's been saying AA budgets have doubled or tripled a lot recently, so I think that "from" is supposed to be a "to" in that last quote.

Usually those interviews were about huge budget leaps for inXile, Obsidian, and Larian games.

I'm sure, it still reads funny though. On that note, are there any good explanations for the big increases in costs in such a short time span? 5-6 years a short time for costs to triple. Obviously Bard's Take appears to be a more expensive game to make up front, but I'm assuming it's more than just "we tried to make bigger/more expensive games than before".

Glio · Nov 19, 2018

Dr Wily said:
Previous generational expenses have been anticpated to double prior to a generational transition. and then in reality be more like triple, so its interesting to see a confirmation that this happened this generation too, when discussion of rising costs constantly sees people incredulous that it happens citing things like middleware as big cost savers, rather than cost controls.

Seems pretty likely this will happen again with the next transition.

I wonder if it will reach some level of bubble

Hey Please · Nov 19, 2018

Given PoE raised around $4.4 million and made Deadfire and Larian Studios made DoS II by raising around $2 million, I am a touch confused as to what caused the sudden jump in the span of 6 years? Development for multiple platforms? Better graphics? Greater scope?

Rodjer · Nov 19, 2018

Shubh_C63 said:
How much we think was Hellblade production cost ?

500k to break even, 500k x 30 = 15m USD

15m USD - 30% of Steam/GoG/PSN cut = 10.5m USD

Deleted member 30077 · Nov 19, 2018

i-Lo said:
Given PoE raised around $4.4 million and made Deadfire and Larian Studios made DoS II by raising around $2 million, I am a touch confused as to what caused the sudden jump in the span of 6 years? Development for multiple platforms? Better graphics? Greater scope?

Raising 2 million doesn't mean the game costs 2 million to make.

Rodjer said:
500k to break even, 500k x 30 = 15m USD
15m USD - 30% of Steam/GoG/PSN cut = 10.5m USD

I think it's pretty impressive that only 20 people made this game in 3 years time. That seems extremely efficient.

Rodjer · Nov 19, 2018

i-Lo said:
Given PoE raised around $4.4 million and made Deadfire and Larian Studios made DoS II by raising around $2 million, I am a touch confused as to what caused the sudden jump in the span of 6 years? Development for multiple platforms? Better graphics? Greater scope?

Both PoE and Divinity didn't cost only 4.4 million and 2 million.

Dest · Nov 19, 2018

Derrick01 said:
This definitely plays a big role. These smaller companies (well, that weren't acquired by MS) need to get the hell out of california. It's far too expensive.

Yup. I work in tech in general and got out of California, and it seems like some companies are also making the move out. I get paid less, but walk away with more money because of the fact that everything is just cheaper. I don't understand why everyone feels like they need to be there. Companies could save hella on office space, taxes etc if they moved. Employees would also probably be far less stressed with not having to live in California. Can say that I'm MUCH happier being away from that hellhole.

TheSyldat · Nov 19, 2018

Ooor they could also stop trying to be "bay area based" or New port beach based , and you know be in more modest places ...
Sorry but if the costs are skyrocketing like crazy it's also in large part due to stubbornly staying in a geographical area where the rent prices for EVERYBODY has lost all sense of reality forever ...

There's a buttload of tiny european studios that are spending even half of that and yet delivered games that were on par with InXile production ( Lords of Xulima just to name drop one )...

Also a lot of those devs rely on insanley pricey propietary software tool kits that are nowadays rivaled by free to use , and royalty free and patent free tools that are equally as good , but nooo its too much to ask for them to form thesmelves on tools that respect them and their wallet ...

Sorry Brian but just admit that you wanted to say yes because it was just plain easier ...

Hey Please · Nov 19, 2018

napata said:
Raising 2 million doesn't mean the game costs 2 million to make.

True. Generally they are raised to secure greater private capital. That said, I have yet to discover proof that the game cost multiple folds the amount they raised.

Turrican3 · Nov 19, 2018

Nirolak said:
That said, it's hard to imagine $30 games with $60 million budgets, so I think we'll see them work on ways to make AA games look appealing in the $30-$40 million budget range.

This is almost unbelievable... in a bad way (i.e. I'm sure this is accurate, and it worries me a lot!) :-\

Rodjer · Nov 19, 2018

TheSyldat said:
There's a buttload of tiny european studios that are spending even half of that and yet delivered games that were on par with InXile production ( Lords of Xulima just to name drop one )...

Sure, but at the same time, if you want to make a grand scale title in a tiny european and cheap country like Czech you are going to need 36 million USD https://www.pcgamesn.com/kingdom-come-deliverance/kingdom-come-deliverance-cost-budget

TheSyldat said:
Also a lot of those devs rely on insanley pricey propietary software tool kits that are nowadays rivaled by free to use , and royalty free and patent free tools that are equally as good , but nooo its too much to ask for them to form thesmelves on tools that respect them and their wallet ...

If we are talking about InXile, Obsidian and Divinty, they all used Unity for their games.

Deepwater · Nov 19, 2018

Derrick01 said:
And to think not even 10 years ago you could make a game as crazy detailed and good looking as uncharted 2 or 3 on a ~30 mil budget lol.

This definitely plays a big role. These smaller companies (well, that weren't acquired by MS) need to get the hell out of california. It's far too expensive.

The primary location of Software development talent is tied to wherever Google/Amazon/Facebook plant their feet. So much of the tech industry infrastructure is tied in California that it'll take an economic bubble bursting before any of that changes. And it'll likely be a housing bubble because it's very unsustainable over there.

There are other prime locations honestly. Chicago, Houston, Atlanta, Raleigh/Charlotte, Detroit. When the bubble pops that's where companies will be moving to if I had to bet.

DopeyFish · Nov 19, 2018

i-Lo said:
Given PoE raised around $4.4 million and made Deadfire and Larian Studios made DoS II by raising around $2 million, I am a touch confused as to what caused the sudden jump in the span of 6 years? Development for multiple platforms? Better graphics? Greater scope?

Artists. It's almost always artists.

More geometry to model. More textures to paint. More animations to rig.

We went from a programmer dominated industry to an artist dominated industry.

TheSyldat · Nov 19, 2018

Rodjer said:
If we are talking about InXile, Obsidian and Divinty, they all used Unity for their games.

Unity doesn't do everything for you , and also don't forget that on the asset store a lot of things are paid for and not free at all and the price can add up real quick
Add to that middleware for sound design such as Wwise , special propietary distributed cross compiling software solutins (despite Canonical having something way better way quicker way more flexible for way cheaper "but you need to learn how to linux to use it though" that's your fucking job mate ! )
Etc etc etc

Again a lot of that cost could have been slashed down by half with better decisions being made when it comes to the creation of their production pipeline and where they were renting ...

Big structures such as Ubi and EA that have been existing for long having difficulty to transition I can understand and defend. InXile on the other hand was founded out of pure cloth everything needed to get off the ground , and rather than be smart about it they chose to take the path of least resistance, now they are biting the bullet.

Cort · Nov 19, 2018

This just adds another layer to poe 2's failure, which is a shame

Illusion · Nov 19, 2018

Deepwater said:
The primary location of Software development talent is tied to wherever Google/Amazon/Facebook plant their feet. So much of the tech industry infrastructure is tied in California that it'll take an economic bubble bursting before any of that changes. And it'll likely be a housing bubble because it's very unsustainable over there.

There are other prime locations honestly. Chicago, Houston, Atlanta, Raleigh/Charlotte, Detroit. When the bubble pops that's where companies will be moving to if I had to bet.

Detroit is so finicky with this. People are so afraid of being priced out of their homes. People coming in are skeptical of the crime, housing, and then Detroit's Mayor/City Council wanting to tax the f**k out of any huge corporation since they desperately need the money.

Arthoneceron · Nov 19, 2018

It's no mistery why some video game companies want some insane amount of monetization these days, even the most disgusting ones like EA.

Aokiji · Nov 19, 2018

Nirolak said:
Usually cost ramp slows down a bit for a category eventually (see how Horror movies are budgeted, or how big films often stick to $200 million), but yeah, I don't think we're there yet.

That said, it's hard to imagine $30 games with $60 million budgets, so I think we'll see them work on ways to make AA games look appealing in the $30-$40 million budget range.

im hoping the tools get better and that being able to release on 4+ successful platforms (at least early in the gen) will help out

Hey Please · Nov 19, 2018

DopeyFish said:
Artists. It's almost always artists.

More geometry to model. More textures to paint. More animations to rig.

We went from a programmer dominated industry to an artist dominated industry.

Ah, that kind of explains a lot. Thanks.

Thomas Puha · Nov 19, 2018

i-Lo said:
Ah, that kind of explains a lot. Thanks.

Yep, and everything around just costs more, living expenses go up, salaries slowly go up. The problem is really simple. Games mostly cost the same as "back in the day" yet now we make them with 5-10 times more people so the budgets are so much more. More people, bigger office spaces etc. Movie tickets have doubled up in price pretty fast, game prices have not.

Theorry · Nov 19, 2018

gundamkyoukai said:
Make sense 5 million can't really do much into day market even at AA level.

Surge was 5m tho. :)

Mecaknight · Nov 19, 2018

Thomas Puha said:
Yep, and everything around just costs more, living expenses go up, salaries slowly go up. The problem is really simple. Games mostly cost the same as "back in the day" yet now we make them with 5-10 times more people so the budgets are so much more. More people, bigger office spaces etc. Movie tickets have doubled up in price pretty fast, game prices have not.

It's a valid argument, but as a customer, I'm not sure I'd be ready to buy games today as I did 15 years ago. I'm not sure that even if my favorite studio made a $100 game, that is exactly what I expect them to do, I'd buy it. I may not be representative of the mass market, but considering the number of games that are already part of my backlog, I'd drop modern gaming altogether to go back to classics I haven't played yet.
Steam is partly to blame for this because we're accustomed to wait for price drops 2-6 months after release, but I'm not seeing it changing in a near future.

Hey Please · Nov 19, 2018

Thomas Puha said:
Yep, and everything around just costs more, living expenses go up, salaries slowly go up. The problem is really simple. Games mostly cost the same as "back in the day" yet now we make them with 5-10 times more people so the budgets are so much more. More people, bigger office spaces etc. Movie tickets have doubled up in price pretty fast, game prices have not.

Thanks.

To the underlined portion: I take it the increase in the number of people on a given project, if mostly artists, is due to the expansive asset creation even though the underlying game itself is not redefining the genre.

Deleted member 268 · Nov 19, 2018

Rising costs is what will cause this industry to consolidate until it resembles Hollywood. A handful of huge players that own just about everything and a couple of smaller independent operations here and there.

Take Two's Private Division is a silver lining we can hope will be emulated so we might lose indies but retain auteurs.

TheYanger · Nov 19, 2018

Derrick01 said:
And to think not even 10 years ago you could make a game as crazy detailed and good looking as uncharted 2 or 3 on a ~30 mil budget lol.

This definitely plays a big role. These smaller companies (well, that weren't acquired by MS) need to get the hell out of california. It's far too expensive.

I mean, Uncharted 2 or 3 look like AA games in many ways these days.

That's a big part of it, our expectation of all levels of these games goes up over time almost invisibly. It works fine if you're an indie making a retro game, though even those have pretty high expectations on animation quality for most games now. But like, a PS2 looking AA game is still well below standard these days.

Nirolak · Nov 19, 2018

i-Lo said:
Thanks.

To the underlined portion: I take it the increase in the number of people on a given project, if mostly artists, is due to the expansive asset creation even though the underlying game itself is not redefining the genre.

Well, also, you just have to keep up with industry standards to an extent to be taken seriously.

Like, look at the reactions people have to the graphics in Bloodstained or Left Alive. They really hurt the perception of the games. Now, they could be bad otherwise, but no one wants to run into these kinds of issues in such a competitive market.

Deleted member 5167 · Nov 19, 2018

i-Lo said:
Thanks.

To the underlined portion: I take it the increase in the number of people on a given project, if mostly artists, is due to the expansive asset creation even though the underlying game itself is not redefining the genre.

Player demands aren't solely graphical; as featuresets get added to one game, others have to follow suit to compete, and then they become "standard features" that a title will get criticised for not having.
eg If you're making an open world game, its pretty likely players want faster travel options like vehicles, they want day / night cycles, they want weather effects, they want an inventory, they want a crating system, they want a levelling system, they want player customisation options.
Each of these features might once have been a USP for any given open world title, but are now expected as 'standard'. And each of those features each exponentially add to the cost of making a 'basic' title.

inXile: AA development costs have went from $5-$6 million in 2012 to $15-$20 million today

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