Article : Only 30% of games even break even!

Here ya go: http://www.xbox360degrees.com/2005/03/08/News/bungie-doubles-development-team-for-halo-3.html

That was an easy game you picked fortunately. ;)

I want to emphasize also that for multiplatform titles, it's even rougher in terms of team sizes, as often there are certain members that are on the project solely to aid in development on one platform or another.

Interesting.

Gears of war had 20-30 people on it at any one time apparently

The total cost of development was $10 million, according to Epic's Mark Rein, and only 20 to 30 people were involved with the development at any time.[17] However, work on the customized Unreal engine was outsourced to China, and those figures are not included in these values.[17]

http://en.wikipedia.org/wiki/Gears_of_War_-_The_Soundtrack#Soundtrack

So what does Epic know that other companys don't. Even the bbc doesn't seem to think that the average cost has increased all that much.

http://news.bbc.co.uk/1/hi/technology/4442346.stm

They state that last gen games were between 3/6m and next gen could go up to 10m or 20m.
 
Yes but UE3 was made and has been liscensed to many others. Even if we put in liscensing costs for th engine to make it fair its what another 5-10m at most for that engine ? Your still looking at 15-20m budget. That was a game that has some of the best graphics of this gen.
Usually, an even bigger part of the costs on games that are hyped to hell and back is going to be marketing (as it was for Halo 3, for instance). I also wouldn't be surprised if UE3 wasn't that high in terms of initial costs since Epic usually has a very small team for core engine development, but ongoing costs for updating and support of licensees would actually be many times greater. And that's of course, not including the millions spent on content and lesser millions spent on development of the actual game itself.

I don't know how true it was , it was most likely true at the start of teh gen as developers had no experiance with the new system , however costs should have come down by now. How much more expensive is it to make high res textures vs low res. Aren't they all done in high res and then sample down anyway.
That's a gross misunderstanding of the cost distribution. The reality is quite the opposite because programming difficulties do not add up to quite so large a chunk of costs in the first place (at least not comparatively, anyway). It's always about the content. In fact, as devs understand the platforms more, the more the capacity to do stuff expands and the more content you need to fill in that hole.

Second of all, resolution isn't the issue with content costs, but the quantity. Whereas a model might have only had 1-2 textures per piece in the previous generation, nowadays they'll have 10+ easily. Where models were once a few thousand polygons created directly in low-res, you now make a high-res normalmap source geometry and a completely separate in-game model and tweak it a thousand times over. Where a character might have gotten by with around ~500-600 animations previous gen, 1500-3000 is a decent figure nowadays. And although resolution doesn't directly affect cost of development, the indirect effect of it is that quality standards are that much higher. When you downsample a high-res texture, obviously details are lost, but when they're kept high-res, every detail is totally visible and matters.

Moreover, it's not just that they have content to create, but a whole lot of tuning to do. Creating 2000 animations is all well and good, but then tuning things like state transitions and blend curves and things like IK combinations and layering and contextual blends and all that still remains after the raw animations have been created. And the size of these datasets is a combinatorial explosion. With large amounts of content, the natural direction to go on these sorts of things is to be very data-driven, after all. In many cases, this data adds up to more than the original content they deal with.

It's not as though 100+ GB of content comes cheaper just because we know the systems a little better now.
 
So what does Epic know that other companys don't. Even the bbc doesn't seem to think that the average cost has increased all that much.

http://news.bbc.co.uk/1/hi/technology/4442346.stm

They state that last gen games were between 3/6m and next gen could go up to 10m or 20m.

Here is the first paragraph from Mark Rein's interview:

Next-generation gaming development costs have naturally skyrocketed, as the advancement of technology means more money is needed for additional personnel and tools. However, Epic Games VP Mark Rein claims the company's next-gen Xbox 360 holiday blockbuster Gears of War cost "around $10 million" to produce. Rein states that GOW "wasn't cheap but didn't cost the crazy figures you hear other companies quoting of $20, $30 million". He also said that the GOW development team is only comprised of 20-30 members.

How you walk away from these quotes thinking that things are inexpensive rather than expensive, I don't know. Also, call me crazy, but how is going from 3-6M to 10-20M not a huge jump in your estimation? Do you have the millions just lying around? :)

Consider that development costs along even the lines of these arbitrary figures represent more than a doubling. And in return? They are charging 20% more at retail. So, an expense doubling offset by a 1/5 revenue increase; that's not a good situation for any business.

In terms of how Epic made Gears work so well, credit their art team and art directors - they made that game what it is.
 
Sony should take that into consideration with their next console. They should make it more user friendly otherwise the increased development costs will make developers less willing to choose it.

Thats one strategic advantage MS has and will continue to aim for
 
It's not about user friendliness in the hardware so much as the tools. Next gen is gonna warrant a whole load more content, more animation frames, more everything. If it's all created by people the same way it is now, costs will go up once again. Hopefully though advances in content creation systems will offset some of this.
 
While we're on the subject of costs, how did PC games do it? They've had the 'HD' hurdle to overcome for quite a while, their models were usually a good deal more complex etc. etc. Or is the short answer, 'they didn't'?
 
Usually, an even bigger part of the costs on games that are hyped to hell and back is going to be marketing (as it was for Halo 3, for instance). I also wouldn't be surprised if UE3 wasn't that high in terms of initial costs since Epic usually has a very small team for core engine development, but ongoing costs for updating and support of licensees would actually be many times greater. And that's of course, not including the millions spent on content and lesser millions spent on development of the actual game itself.

This is the same with movies. You hardly ever hear the advertising budget. However you can still have independent movies that gross very highly. As for liscensing upkeep , they get paid by the party that liscenses the engine. So they should be profiting off the unreal engine.

That's a gross misunderstanding of the cost distribution. The reality is quite the opposite because programming difficulties do not add up to quite so large a chunk of costs in the first place (at least not comparatively, anyway). It's always about the content. In fact, as devs understand the platforms more, the more the capacity to do stuff expands and the more content you need to fill in that hole.
Devs should share assets with other devs in their company. I really don't see why game A needs all new textures over game B. If they are both set in an urban area. If your going to create a ton of high res textures for a fps set in a city then why would u recreate the same assets for a skate boarding game set in a city. Sure you might want to make a few new models here and there but why replace all the texturs ?

it seems like a hell of a waste to me.

It's not as though 100+ GB of content comes cheaper just because we know the systems a little better now.

Shouldn't it become cheaper because of better tools? Also for the 360 its not like devs are creating 40 gigs of content. Its limited to a dvd size also and while compression may have become better the actual content (textures) will take up more size as the resolution of the textures increased.

How you walk away from these quotes thinking that things are inexpensive rather than expensive, I don't know. Also, call me crazy, but how is going from 3-6M to 10-20M not a huge jump in your estimation? Do you have the millions just lying around?

We both took diffrent things away from that comment. I took away that if you have smart plan and a realistic time frame and staff size you can create a tripple a quality game for much less than your competition. It sucks if for some reason another dev team can't create a game as great as gears of war for the same amount of money. However any projects costs can slip out of control.

Consider that development costs along even the lines of these arbitrary figures represent more than a doubling. And in return? They are charging 20% more at retail. So, an expense doubling offset by a 1/5 revenue increase; that's not a good situation for any business.

I look at gears of war at 10m and its a tripple a title. Was 3m a tripple a game or a crap game ? Was 6m a tripple a or crap game. Was it a mix ? From 6m to 10m is only a 4m increase. however assuming an xbox title would sell 1m copies and cost 6m to produce it could only make 50m. An xbox 360 title that would sell 1m copies and cost 10m to produce could make 60m. That is an additional 10m on the table at the cost of 4m or at worse case 7m. Now I know a game doesn't make that much as everyone gets a cut , however final take home should favor the xbox 360 game as I don't believe ms takes a larger cut and gamestop hasn't increased their cut. Lets also not forget that with this generation there are many more ways to make money off a game , you have gamer pics , themes and of course map packs and content updates. Most of those can be done with little or no cost to the developer.
 
While we're on the subject of costs, how did PC games do it? They've had the 'HD' hurdle to overcome for quite a while, their models were usually a good deal more complex etc. etc. Or is the short answer, 'they didn't'?
The short answer is more or less that they didn't.

As mentioned before, resolution alone isn't the big factor, but rather how much you can do, and in turn how much you're expected to do. We were already crossing into HD resolutions well before DX9 and SM2.0 and such. But what's the bigger impact on cost? Obviously being able to do that much more per pixel means you're expected to do that much more per pixel and move that much more information down the line, and that's where more content comes into play. Similarly, CPU power increases meant more stuff to do per frame which meant more information and tuning data for artists and designers to keep tweaking at. For that matter, multi-core CPUs are a relatively recent development in the PC space considering how long it had been a battle entirely centered around clock speed.

On that note, it's worth mentioning that a lot of big-budget titles are often not PC exclusives (assuming that the genre is not ill-suited to consoles). Also a lot of PC-specific production also leads down the line of trying to cover a broad range of hardware specs, and so they often split down the middle of their target market, which means that they're working on the basis of capacities that aren't exactly top-of-the-line when the game comes out. OTOH, if you worked on a game right now with the intention of targeting a 32-core Larrabee, you can bet it wouldn't be cheap.

This is the same with movies. You hardly ever hear the advertising budget. However you can still have independent movies that gross very highly. As for liscensing upkeep , they get paid by the party that liscenses the engine. So they should be profiting off the unreal engine.
Making a profit doesn't mean they don't have costs. They made a profit off of Gears as well, but that doesn't mean it was made for free. My point was that the cost of that upkeep is likely a fair bit greater than the cost of developing the engine in the first place.

Devs should share assets with other devs in their company. I really don't see why game A needs all new textures over game B. If they are both set in an urban area. If your going to create a ton of high res textures for a fps set in a city then why would u recreate the same assets for a skate boarding game set in a city. Sure you might want to make a few new models here and there but why replace all the texturs ?

it seems like a hell of a waste to me.
Where do you get the idea that devs are NOT doing this at all? Stuff gets totally scrapped only when you are undergoing a major transition and things aren't done the way they used to be. Asset sharing and maintaining a database of old assets is quite common otherwise, though it certainly yields mixed levels of success. The stuff that really takes time isn't textures and models, but all the adjustments done to them. A new character takes relatively little time to just initially create, but it's when you do all the adjustments, all the tuning, all the revisions, all the tweaks, all the design-related stuff, all the scripting... that's where you eat up time. And asset sharing largely only saves you time on the front end of that picture. Sure, we don't need to create a new tree model for every game, but big deal... we might have a new feature in the next game that says we'll have to rig or markup that tree differently than we did before, or we might have to set up different collision geometry for it, or we might have to punch in different numbers for the flexibility of its leaves or put new trigger volumes around that tree... and just how much have you really saved in the end here?

Shouldn't it become cheaper because of better tools? Also for the 360 its not like devs are creating 40 gigs of content. Its limited to a dvd size also and while compression may have become better the actual content (textures) will take up more size as the resolution of the textures increased.
The quality of tools has indeed improved, but by no means can you possibly say that it has improved enough to offset the difference in asset quantity. I should also clarify that when I talk about tens of GB of content, I'm talking about the original working content quantities that the artists and designers really create and edit and mess with, not the final compressed on-disc content. After compression, packing, archiving, etc, a game can easily fit on a DVD even if it has 40 GB of original content.

To give you an idea, TR:U fits well within the confines of a single Xbox360 DVD, but the actual game folder with all its uncompressed assets, scripts, XML, etc. is quite a bit over 200 GB*. And a large part of that is not just textures or animations or models, but tuning data.

On the opposite end, you had TR Anniversary, which was a budget title even by previous-gen standards, and had a relatively small staff working on a separate code branch from Underworld, and they produced something that, even at a retail price of $30, could have broken even with only around half a million units sold, and it clearly did far better than that. It does happen, and nearly all the same people who worked on that are part of the team pumping out 200 GB of content for a 360 title.

* : Okay, so it's more like 190 GB in terms of "true" GB, but when people speak of disc capacity, it's never in "true" GB. That ended forever with CDs being the last examples to the contrary.
 
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I have no idea if the real failure rate is 70%, but it is high. The industry has been referred to as hit driven for as long as I can remember.

Game costs aren't easy to talk about, I know of dev houses who are doing PS3/360 titles for 1.5 million, they're not tripple A titles, but the break evbn point on sales is a lot lower.

And on the other side of the coin I worked on games circa Sega Genesis that had break even points in the millions of units, because of hidden costs (mostly licensing).

Also just to complicate things publishers will break even on a product at a different sales point than developers if they aren't the same entity.

Annual sports games are actually extremly expensive to do because of the short development cycles (which lead to large teams) and the licensing costs.

At larger publishers it's gotten to the point that engineering is as expensive as content, though that has less to do with platform complexities, than it does to do with head count driven by deadlines and growing codebases.
 
I look at gears of war at 10m and its a tripple a title. Was 3m a tripple a game or a crap game ? Was 6m a tripple a or crap game. Was it a mix ? From 6m to 10m is only a 4m increase. however assuming an xbox title would sell 1m copies and cost 6m to produce it could only make 50m. An xbox 360 title that would sell 1m copies and cost 10m to produce could make 60m. That is an additional 10m on the table at the cost of 4m or at worse case 7m. Now I know a game doesn't make that much as everyone gets a cut , however final take home should favor the xbox 360 game as I don't believe ms takes a larger cut and gamestop hasn't increased their cut. Lets also not forget that with this generation there are many more ways to make money off a game , you have gamer pics , themes and of course map packs and content updates. Most of those can be done with little or no cost to the developer.

In the paragraph above, I'm having trouble understanding what your central point is. Gears of War is a best-seller, and a fine game. Obviously the economics around that particular title make a ton of sense, but that's the very argument that myself and others are making: the top games make all the money.

How many games have you bought this gen for the 360, and which games are they? Then next time you're browsing online or at the store, take note of all the games you haven't bought and consider for a moment whether you believe that development for those games was super cheap or not. The fact of the matter is that not just the development-side of the industry, but the consumer perception side as well is focused almost entirely on a selection of 'monster' games. And those games represent a very small slice of the overall pie in terms of title count.

A generation ago, a game that sold under 100K might still be profitable enough to let its developer develop for another day. Today, if that game were developed on the 360 or PS3 and seeking retail release, there is a very real chance that the developer(publisher) could end up seriously in the red on the project.
 
Devs should share assets with other devs in their company. I really don't see why game A needs all new textures over game B. If they are both set in an urban area. If your going to create a ton of high res textures for a fps set in a city then why would u recreate the same assets for a skate boarding game set in a city. Sure you might want to make a few new models here and there but why replace all the texturs ?
There was much discussion on this point at this generation's start. Consider a realistic city racer - why should Bizarre Creations, Turn 10 Studios and Polyphony Digital all go and create London individually, tripling the total workload?! If there was one pool of perfect materials which developers could buy into and scale to fit their game, it'd save a lot of work. That might happen one day. Likewise people models, all people are the same. So why not have a big repository of faces etc., and a standard character rendering system? Sadly console performance isn't high enough that assets can be used without huge amounts of optimization. And this only applies for certain games. Anything going for a stylised look, like Fable 2 or Banjo, needs to start from scratch.

Also consider the revision process. It's rare for artwork to be Day 1 what's used in the final product. Look at the making of Pixar's Toys and the funky looking Buzz and Woody models. See how Drake from Uncharted evolved during the game development. Look at all the art revisions during the creation of Star Wars, such as Wookies starting out as Ewoks. If a Wookie model already existed from a Yeti game, a develop of a Star Wars game could hypothetically start out ignoring it as they create an Ewok type character, before the idea-evolution process led them to the final Wookie design, during which time they'll have built the thing as they worked on the Ewok.

I can only see asset reuse working on a grandiose scale if the design begins with 'what assets can we use?' If a developer goes shopping on a huge generic content website and buys up a village and people, great. If they start off wanting a look first, with an art director working with a concept artist to come up with something, chances of finding a pre-built asset to match is minimal.
 
I have no idea if the real failure rate is 70%, but it is high. The industry has been referred to as hit driven for as long as I can remember.

Game costs aren't easy to talk about, I know of dev houses who are doing PS3/360 titles for 1.5 million, they're not tripple A titles, but the break evbn point on sales is a lot lower.

And on the other side of the coin I worked on games circa Sega Genesis that had break even points in the millions of units, because of hidden costs (mostly licensing).

Also just to complicate things publishers will break even on a product at a different sales point than developers if they aren't the same entity.

Annual sports games are actually extremly expensive to do because of the short development cycles (which lead to large teams) and the licensing costs.

At larger publishers it's gotten to the point that engineering is as expensive as content, though that has less to do with platform complexities, than it does to do with head count driven by deadlines and growing codebases.

I think it's a lot more interesting to ask whether the % of break-even titles has increased or decreased with the shift to next-gen, per category. The market has expanded, prices have gone up and we don't really know how much more expensive games are for HD titles.

It also stands to reason that Wii games are cheaper, but then again there are a lot more games, and that's even more true for the DS.
 
Making a profit doesn't mean they don't have costs. They made a profit off of Gears as well, but that doesn't mean it was made for free. My point was that the cost of that upkeep is likely a fair bit greater than the cost of developing the engine in the first place.

No it wasn't made for free. Gears cost them 10m. However the upkeep of the engine is paid for by liscensing it out. In fact its most likely making a profit on liscensing the engine out and is able to upgrade it for their future games using that revenue streams.

Where do you get the idea that devs are NOT doing this at all? Stuff gets totally scrapped only when you are undergoing a major transition and things aren't done the way they used to be. Asset sharing and maintaining a database of old assets is quite common otherwise, though it certainly yields mixed levels of success

Right but every time cost is brought up people talk about the art and content creation. if you have a large amount of assets and are continueing to increase that bulk of assets then you should be using as much as possible in your future titles. Thus each title you put out should make the next one cheaper. For instance if We made 4 games and then decided to make a sequal to one we should be able to draw on those 4 games worth of assets (providing they match up). Thus I should not have to spend as much to develop the game as I did the first game. So if the first agme cost 20m the 5th game should cost less than that. Esp if we are using the same engine.

The quality of tools has indeed improved, but by no means can you possibly say that it has improved enough to offset the difference in asset quantity. I should also clarify that when I talk about tens of GB of content, I'm talking about the original working content quantities that the artists and designers really create and edit and mess with, not the final compressed on-disc content. After compression, packing, archiving, etc, a game can easily fit on a DVD even if it has 40 GB of original content.

To give you an idea, TR:U fits well within the confines of a single Xbox360 DVD, but the actual game folder with all its uncompressed assets, scripts, XML, etc. is quite a bit over 200 GB. And a large part of that is not just textures or animations or models, but tuning data

Right and how big was a TR on the original xbox when it was uncompressed. Why don't they Design it once and reduce it for there over all the games. Did the new Tomb raider need new designs over the previous tomb raiders this gen ?

In the paragraph above, I'm having trouble understanding what your central point is. Gears of War is a best-seller, and a fine game. Obviously the economics around that particular title make a ton of sense, but that's the very argument that myself and others are making: the top games make all the money.

But gears of war wasn't a known quality. Its only looking back taht we know what its to become. Why doesn't EA invest in producing an engine like Unreal 3 and then use that across the board. It seems to me that the unreal 3 engine is being used in many diffrent genres .

How many games have you bought this gen for the 360, and which games are they
I've owned 19 xbox 360 titles and have another 5 preordered for thsi year. They run the guantlet from big games to small games. On xbox live I have another 15 games that run the guantlet

A generation ago, a game that sold under 100K might still be profitable enough to let its developer develop for another day. Today, if that game were developed on the 360 or PS3 and seeking retail release, there is a very real chance that the developer(publisher) could end up seriously in the red on the project.

Even factoring full retail price at $50 bucks that is only 5m. Factor in everything else and they most likey would have broguht in 1-3m depending on if they published it themselves. Were there any games that were tripple a games that were that expensive? This gen if you wanted something low budget there is the arcade.
 
There was much discussion on this point at this generation's start. Consider a realistic city racer - why should Bizarre Creations, Turn 10 Studios and Polyphony Digital all go and create London individually, tripling the total workload?! If there was one pool of perfect materials which developers could buy into and scale to fit their game, it'd save a lot of work. That might happen one day. Likewise people models, all people are the same. So why not have a big repository of faces etc., and a standard character rendering system? Sadly console performance isn't high enough that assets can be used without huge amounts of optimization. And this only applies for certain games. Anything going for a stylised look, like Fable 2 or Banjo, needs to start from scratch.

I can understand that but look at forza and pgr. They use the same engine I believe so why not just create the content and use it in both engines an for that matter any racer that ms would make this gen. Use it all on the same engine that is constantly updated and there you go u just saved yourself remaking New York 8 times.
 
There was much discussion on this point at this generation's start. Consider a realistic city racer - why should Bizarre Creations, Turn 10 Studios and Polyphony Digital all go and create London individually, tripling the total workload?! If there was one pool of perfect materials which developers could buy into and scale to fit their game, it'd save a lot of work. That might happen one day. Likewise people models, all people are the same. So why not have a big repository of faces etc., and a standard character rendering system? Sadly console performance isn't high enough that assets can be used without huge amounts of optimization. And this only applies for certain games. Anything going for a stylised look, like Fable 2 or Banjo, needs to start from scratch.

Also consider the revision process. It's rare for artwork to be Day 1 what's used in the final product. Look at the making of Pixar's Toys and the funky looking Buzz and Woody models. See how Drake from Uncharted evolved during the game development. Look at all the art revisions during the creation of Star Wars, such as Wookies starting out as Ewoks. If a Wookie model already existed from a Yeti game, a develop of a Star Wars game could hypothetically start out ignoring it as they create an Ewok type character, before the idea-evolution process led them to the final Wookie design, during which time they'll have built the thing as they worked on the Ewok.

I can only see asset reuse working on a grandiose scale if the design begins with 'what assets can we use?' If a developer goes shopping on a huge generic content website and buys up a village and people, great. If they start off wanting a look first, with an art director working with a concept artist to come up with something, chances of finding a pre-built asset to match is minimal.

For content it's iffy, though on the engineering side we're seeing more of this, aren't we? Is the industry adopting these increasingly sophisticated middlewares and frameworks I hear mentioned?
 
But gears of war wasn't a known quality. Its only looking back taht we know what its to become. Why doesn't EA invest in producing an engine like Unreal 3 and then use that across the board. It seems to me that the unreal 3 engine is being used in many diffrent genres.

UE3 doesn't have much to do with this; I think you'd be mistaken if you viewed Gears of War as primarily an engine-based endeavor. Now, it was a great showcase for Epic and their engine licensing, that is true, but again it was the artists that made that game what it was - they are the ones that created the 'feel' for the game. Of course EA has their own internal engine teams, you just don't hear about them because they are not on a licensing warpath like Epic.

I've owned 19 xbox 360 titles and have another 5 preordered for thsi year. They run the guantlet from big games to small games. On xbox live I have another 15 games that run the guantlet

Ok, well now list out the top 5 non-XBLA 360 games you've bought that you feel were outside of the mainstream. I mean I might be completely wrong here, I'm not trying to pigeonhole you, but I am trying to make the point that if you go through a lot of 'gamers' libraries, you're actually going to find that they own a lot of the same games. It's the games they don't own that are the ones that are losing money, not the ones everybody does own.

Even factoring full retail price at $50 bucks that is only 5m. Factor in everything else and they most likey would have broguht in 1-3m depending on if they published it themselves. Were there any games that were tripple a games that were that expensive? This gen if you wanted something low budget there is the arcade.

Your $5M is the total pie before everyone has had their cut. The developer(publisher) is not seeing that $5M, I can assure you, and smaller devs aren't going to be self-publishing to begin with due to the outlays required. The publisher by the way is the one to put the most on the line financially, and thus when things in fact do go well, the one to reap the most benefit. Gears of War, remember, was a Microsoft published game title. The massive marketing push that came with that title, and what made it a near-assured success, stemmed from Microsoft themselves being the force making it the marquee title of 2006.
 
If there was one pool of perfect materials which developers could buy into and scale to fit their game, it'd save a lot of work. That might happen one day. Likewise people models, all people are the same.

This already happens, in the form of texture/material/sound effects libraries; even character models. Especially for ahem, lower-tier titles. You wouldn't use an off-the-shelf character model for your main character, of course, but for something like the crowd at a sports event, a decent character modeller can pull 5 models from the library, tweak them to the games' exact requirements and import them into the game, all within a working day - while the creation from scratch would probably take at least a couple of days.

We have two projects right now for the same platforms, one of them is targeting photo realistic-style and all environment textures are based on photo references and libraries; the other is much more cartoony as an art style and all textures are hand-painted. The textures for the first one take maybe 5x less work in total, after you include all the revisions and iterations.
 
I think the idea will work fabulous for photorealism, crossing over with movies too. Now we can scale assets reasonably automagically for a lot of uses, it's a clear business proposition for a company to set up to create a library of assets at CGI quality for any computer related production. Moving outside of that though, how much scope is there? I can't see a situation where Fable 3, FFXV and the like will be able to pick premade assets. Could this even affect the future direction of games, with games choosing art-style based on what's available ready-made?
 
No it wasn't made for free. Gears cost them 10m. However the upkeep of the engine is paid for by liscensing it out. In fact its most likely making a profit on liscensing the engine out and is able to upgrade it for their future games using that revenue streams.
Nice of you to ignore the part where I actually said what the point was. It doesn't matter how they're making money when the question is what sort of costs exist (existence of a cost has nothing to do with how you subsume it). Nor does it matter that Gears is turning a profit when you're talking about the industry as a whole being largely full of failures, simply because Gears is ONE game.

Right but every time cost is brought up people talk about the art and content creation. if you have a large amount of assets and are continueing to increase that bulk of assets then you should be using as much as possible in your future titles.
That's all well and good on paper, but the point I was making is that it isn't that simple. When talking of content, the only thing you speak of are textures and models. Sure you can save time and money on the initial start-up with that, but that doesn't save you much over the entire development cycle where the evolution of assets. Being able to hit the ground running is great and all, but that alone isn't going to bring you from $50 million down to $10 million. Most importantly, your little hypothetical scenario where it just keeps adding up is wholly unrealistic. Now if you're using the same things for the same purposes on the exact same tech, the story can be different (e.g. assen's example of crowd character models), but it's light years from being a silver bullet.

Assets are costly all right, but the bigger picture of content creation is the "use" of assets. Using older assets as a starting point is normal, but it's not something that scales to the point of being able to hide even a large fraction of your costs for just any development team, because everything is going to be advancing as you move from one game to the next. New tools and features are always in development, and that always means adapting stuff. And then of course, with hardware cycles comes major changes.

Right and how big was a TR on the original xbox when it was uncompressed. Why don't they Design it once and reduce it for there over all the games.
I'm not sure I follow the question. What do you mean by "reducing" it for there? What does the original Xbox have to do with that? What happens when the old Xbox is dropped altogether? What happens when you need to support something that the Xbox couldn't do at all?

Did the new Tomb raider need new designs over the previous tomb raiders this gen ?
In a word, YES.
This is one of those examples I mentioned where part of the process was completely ripping out all legacy code and pipeline. And no, it's not running on the same engine at all anymore.

That said, when development started, it's not as though we said "make all new assets now." Leftover assets from TR:Legend were of course used when development started so that we would at least have a "ground" set of content with which to actually run the darn thing. It was as more new tech and new features were developed and more old codepaths and art pipeline paths were being deprecated and later ripped out that new content was created that actually used it all, but by no means did it mean we were able to develop at half the cost in half the time.
 
Having been in the midst of a studio failure myself, I must say I'm surprised even a third make money. :) As everyone has said, it's a hit-driven business, and when you factor in ballooning costs and shrinking margins, it's no surprise that most games never even see the light of day.

Just like Hollywood, gaming has its share of Waterworlds and FF: TSWs, and the occasional Titanic.
 
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