KZ2 and game budgeting in general *spin-off

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Okay, so 20+ million Euro is the full development cost ? 40+ mil Euro will match the US$50+ mil in the OP, assuming 50% goes to marketing. Development cost is still lower than rumored though.

If it sells the same as KZ1, then the ROI will be positive.

20M+ doesn't necessarily mean "slightly above 20M." That is quite indefined and, when all is said and done, the "+" could be substantial. Also, the marketing figures that were Euro centric and he focus on the article may indicate the moneys being discussed are local investments, i.e. the funds spent locally on development. You would not say a 200M movie which had 2M of investment in the country was a 200M movie.

That said the numbers are substantial as is, and I doubt their dev budget includes the cost of promotional material like the Blur Studios CGI (which are not cheap).
 
Over 200 people reported by who ? Anywho, we only need to look at the total allocated budget (40+ mil Euro). That's the number they need to make back (whatever they spent). They are at 1M+ right now.

They need to rebalance their soldier classes fast though, so that noobs like me can fight better.

Like I said, the figures you guys locked into earlier are ambiguous. First it was 'Oh, 20M' and then it got pointed out that it was "more than" and equally so for marketing... but where are the costs outside of the Netherlands? How about all the localization, distribution, etc and CGI footage, etc. I highly doubt as I said before they are including the original, and expensive, CGI into the "development" budget spent in the Netherlands. From Sony's perspective, how much oversight (ninja, focus groups, etc) did the project take outside the traditional 3rd party published title? How much bandwidth did they eat/pay for which they would have monetized off of a 3rd party?
 
20M+ doesn't necessarily mean "slightly above 20M." That is quite indefined and, when all is said and done, the "+" could be substantial.

Some reported it as 20 mil Euro, so 20+ mil Euro should be a good guess. Not to mention Sony declared that GoW3 has a bigger dev budget (at US$40 mil). Who reported over 200 staff ?

Also, the marketing figures that were Euro centric and he focus on the article may indicate the moneys being discussed are local investments, i.e. the funds spent locally on development. You would not say a 200M movie which had 2M of investment in the country was a 200M movie.

Why ? Execs often like to report the overall number to the press (except when talking to analysts) because they sound more impressive.

That said the numbers are substantial as is, and I doubt their dev budget includes the cost of promotional material like the Blur Studios CGI (which are not cheap).

In the sentence you quoted above, we already mentioned that the marketing budget is separate.


EDIT:
Like I said, the figures you guys locked into earlier are ambiguous. First it was 'Oh, 20M' and then it got pointed out that it was "more than" and equally so for marketing... but where are the costs outside of the Netherlands? How about all the localization, distribution, etc and CGI footage, etc. I highly doubt as I said before they are including the original, and expensive, CGI into the "development" budget spent in the Netherlands. From Sony's perspective, how much oversight (ninja, focus groups, etc) did the project take outside the traditional 3rd party published title? How much bandwidth did they eat/pay for which they would have monetized off of a 3rd party?

If it's the allocated development and marketing budget, everything falls within. Otherwise, it's just something Sony covers as overhead for any/all title development.
 
Tech-sharing "does happen" too. Your "dreams and realities" quote applies in both cases.

Of course, we shared tech on MLB2K in LA with the NBA2K guys in San Fran. It would have been impossible to meet the one year schedule otherwise. But in the end we still each had to create mountains of new code, tools, scrips and art all from scratch. My original posts are to attack the notion of oh, we can just take the KZ2 engine, recompile our game with it and presto it all works. I can't emphasize enough how far from the realm of reality such a scenario actually is. Sometimes we take tech, physical code, libraries or whatever from others and use it, other times we take ideas and code it all ourselves. But for the most part, you still see legions of coders making new stuff.

Plus...sharing is far from headache free as I'm sure you know. I'll give an example without naming the studio or product in question. There was "tech" we took from a sister company which was intended to save us time. At first it did. I took it, integrated it into our product, and we were all merry. Then a new drop came of said tech. I took it, integrated it, and it broke everything. Spent days figuring out the issue, fixed it and we were merry again. New drop, new integration, new problems again. Rinse and repeat this scenario multiple times. Eventually I got so fed up I broke off and just wrote the damn thing myself.

The problem in the end is that these other companies, be it a sister company, one that owns you or whatever, are not coding these technologies for you. They are making it first and foremost for their product, and then providing it to others as a convenience at their own risk. What this means is that you can expect future versions of said tech to mysteriously break your product because revisions will be made that suit the original owner of the code and their product, not you. Throw in the fact that coders are physically either incapable or unwilling to document changes, revisions, etc, and you have nightmare scenarios that can develop, all from trying to save time by sharing code.

So yeah we share stuff, but it's far from "oh take their thingy, slap it in your code and off you go". Plus as has been said before, some tech may benefit game 'x' yet have no impact on game 'y'. Take Edge. It's talked about as if anyone can just take it, quickly throw it into their game and double their frame rate. As you know, on some games Edge will make zero difference. None, zero, nada. It just depends. Likewise with engines. I was at a company once that took significant time and money to port their game from their own in house engine to another 'well known' engine that was licensed, and when complete the resulting frame rate was worse! Talk about a waste of time and money. A painful lesson, but in the end it's not a huge surprise. Said licensed engine was ultimately not built for our needs but for someone else's.

Anyways I probably sound like a broken record here, but the point is to emphasize that a lot of this tech is tuned to solve very specific issues and problems, and sharing them is not only hard, but sometimes simply not feasible, or would yield a worse result. Engines are a prime example of this, I've seem more than once a game run better on an in house engine compared to the 'engine du jour' available for licensing.
 
Who knows, we may be entering the stage of "forced blockbusters" where 1M+ sales can be manufactured through investment with the knowledge that return on investment will be lower, percentage wise, and the risk of a couple big projects going south could be catastrophic. But movie studios seem to bank on the premise of a number of big titles being the the realm of relative break even in the hopes of a couple run away successes that make many-fold profits.

The problem here is that with the exception of MGS4, there really hasn't been any runaway first party blockbusters on PS3 to prop up the big budget titles that may not have lived up to expectations (whether in losses or just making a marginal profit).

However, with that said, there's always a chance that KZ2 will have some legs and it'll continue to sell well over the next few months. I'm not holding my breath on that, but it could happen.

Also, I'm pretty sure God of War III has the potential of being the largest blockbuster (first party) on PS3. God of War is first party right?

Ooops, I just realized that while MGS4 was a PS3 exclusive it wasn't a first party title. So, uh, has Sony even had a first party blockbuster on PS3 yet? I'm drawing a blank on this one, and it's rather surprising me.

Regards,
SB
 
I think the original Resistance and Motorstorm maybe the closest to what you may consider a blockbuster sales wise.

LBP did OK as did Uncharted.
I really thought KZ2 would be the one (there is still a chance it will be), but I awfully wrong on my 1M prediction this NPD so...
 
Also, I'm pretty sure God of War III has the potential of being the largest blockbuster (first party) on PS3. God of War is first party right?

I loved God Of War on PS2...but did it sell huge numbers on that box? Plus I think the landscape is different today. There is so much good content out there that you really need something to stand out, and I think that 'something' has become good online support, like co-op, etc...


LBP did OK as did Uncharted.

I think LBP might be an exception compared to other games. There's nothing like it now, and nothing like it planned, so it should have a much longer than normal shelf life since it is effectively unchallenged. I'm secretly hopeful that it will pass 2mil someday.
 
I loved God Of War on PS2...but did it sell huge numbers on that box? Plus I think the landscape is different today. There is so much good content out there that you really need something to stand out, and I think that 'something' has become good online support, like co-op, etc...

If GOWIII was to feature co-op.
Who would the second character be? Mini-Kratos?
He is bald after all and is kind of evil too.

I have a feeling that after all is said and done, we will NEVER find out the actual cost of KZ2. The closest we will get is Sony or GG PR similar to when Epic released the cost of Gears of War.
 
I loved God Of War on PS2...but did it sell huge numbers on that box? Plus I think the landscape is different today. There is so much good content out there that you really need something to stand out, and I think that 'something' has become good online support, like co-op, etc...




I think LBP might be an exception compared to other games. There's nothing like it now, and nothing like it planned, so it should have a much longer than normal shelf life since it is effectively unchallenged. I'm secretly hopeful that it will pass 2mil someday.

I still need to pick up LBP.
I want that game more than any of the currently available PS3 titles. GOWIII is my most anticipated game though--here's hoping that they don't screw it up. If NG2 Sigma turns out great then there is another withdrawal from the old piggy bank.
 
The better titles sell beyond 1 million within 2-3 months (e.g., LBP, KZ2, Uncharted, ...). GT5P was 2+ mil last year. Didn't bother to check whether RFOM, and other earlier titles exceeded 2 after they went Greatest Hits. The third party devs perform better with MGS4 leading the charge.

Sony should take the opportunity to understand its user base (if not already). Their customers may be more different from 360's than I thought (which may turn out to be a very good thing *if* Sony can tap on it even more effectively).

EDIT: Ah, Uncharted was 2+ mil last November too. The best selling PS3 titles may have all passed 2 mil last year.

Of course, we shared tech on MLB2K in LA with the NBA2K guys in San Fran. It would have been impossible to meet the one year schedule otherwise. But in the end we still each had to create mountains of new code, tools, scrips and art all from scratch. My original posts are to attack the notion of oh, we can just take the KZ2 engine, recompile our game with it and presto it all works. I can't emphasize enough how far from the realm of reality such a scenario actually is. Sometimes we take tech, physical code, libraries or whatever from others and use it, other times we take ideas and code it all ourselves. But for the most part, you still see legions of coders making new stuff.

Who has that notion ? Major software development is hard and tedious in general, even for non-gaming industries. When all is said and then, tech sharing is valuable for the tech community. If you approach it wisely, cost saving is real regardless of how much additional code you need to write to meet the project requirements.
 
I have a feeling that after all is said and done, we will NEVER find out the actual cost of KZ2. The closest we will get is Sony or GG PR similar to when Epic released the cost of Gears of War.

Probably not. Especially since even if we get an idea of the budget we continue go 'nah, but it's gotta have cost more/less than that!'
 
Well getting back to the game budgeting in general.

I'm curious to hear what others think that budget should encompass.
Should it include marketing or just the cost that are directly correlated to making the game?
 
joker454 said:
I loved God Of War on PS2...but did it sell huge numbers on that box? Plus I think the landscape is different today. There is so much good content out there that you really need something to stand out, and I think that 'something' has become good online support, like co-op, etc...

Both did over 2 million... I don't think good online support is necessarily going to cut it. Kick-ass co-op perhaps (as a facet of online play) as a way to enhance the title's single-player campaign. For one, I think split-screen multi-player is actually making a bit of a comeback.
 
Well getting back to the game budgeting in general.

I'm curious to hear what others think that budget should encompass.
Should it include marketing or just the cost that are directly correlated to making the game?

Of course it has to include marketing. But when people talk about headcounts, outsourcing, space rental, etc. then they should use the development budget instead. Using the total budget in this case will blow up the numbers inaccurately.
 
Well getting back to the game budgeting in general.

I'm curious to hear what others think that budget should encompass.
Should it include marketing or just the cost that are directly correlated to making the game?

Depends what we're talking about. We have to make the distinction if we're say, talking about a 'x-year development cycle' as opposed to 'how much money Sony needs to rake in to break even'. But in general we have to be more careful about taking speculative numbers for marketing -- for instance, none of the marketing figures given were given more thought than 'well, 2 million pounds for marketing in the UK -- 20 million dollars!' It's just an extension of the usual pointlessness of NPD threads -- we're arguing based on numbers that we truly don't have.
 
Of course it has to include marketing. But when people talk about headcount, then they should use the development budget instead.

The question then is do you forecast the marketing budget at pre-production?

What if the game is crap? Do you still spend those marketing dollars knowing that a game is going to crucified by the critics--and some developers know their games not be well received?
 
I think the original Resistance and Motorstorm maybe the closest to what you may consider a blockbuster sales wise.

LBP did OK as did Uncharted.
I really thought KZ2 would be the one (there is still a chance it will be), but I awfully wrong on my 1M prediction this NPD so...

These are just personal definitions of the following, and I'm sure each person has a different definition. So to me...

Blockbuster would be a title that sells at least to expectations if not a bit beyond. Making enough to fund at least 1 additional title off the profits, help make up the losses for underperforming/disappointing titles, as well as making a bit of a profit on top of that.

A runaway blockbuster would be something that far exceeds expections and/or makes enough of a profit that you can fund multiple new games while still making a very nice profit on top of it. Addionally it could competely wipe the slate of all losses suffered by underperforming/disappointing titles. Halo 3 for example. Or CoD4/5. L4D might be approaching this if it's sales keep up. Although it might fit in that I think it far exceeded expectations... So you could also lump the original Katamari in here as it far far exceeded expectations even if it didn't have gaudy sales.

So MGS4 I would stick in as a Blockbuster meeting expectations and making enough to fund developement of another game while also making a tidy profit. Likewise, it can help the balance sheet by keeping the company in the black if they had other titles that were losing money. Unfortunately I messed up and it's not a 1st party title but a 3rd party title.

I don't consider anything on PS3 a runaway blockbuster. However, as I said before I expect God of War III to be one. It has quite the cult following and if the gameplay is good should have quite a bit of word of mouth.

Lack of co-op and online multiplayer would certainly limit how much legs it has to continue selling well (Halo 3 for example). So it would have to be hugely front loaded in sales

Regards,
SB
 
I'm curious to hear what others think that budget should encompass.
Should it include marketing or just the cost that are directly correlated to making the game?

Personally, it should include every dollar spent to get that game from concept to the shelf, otherwise it's not a true cost. Put it this way, when I budget for buying a house I don't just take the mortgage payment into account, I also include the monthly property tax, otherwise I'd just be fooling myself.
 
The question then is do you forecast the marketing budget at pre-production?

What if the game is crap? Do you still spend those marketing dollars knowing that a game is going to crucified by the critics--and some developers know their games not be well received?

How is this relevant to the topic ? In general, the answer is no.
 
http://www.1up.com/do/newsStory?cId=3155511

I don't have time for a long post patsu, but my point is pretty simply that people are artificially hanging to the lowest number possible to extrapolate how much it costs or Sony to break even on this title. The above news post, discounting the fact GG cost Sony to be aquired, had 100 staff when purchased, over which 45 were on KZ2. Note that in the Fall of 2006 (!) they were projecting a 21M budget and are very specific in reference to the budget costs related to the Norwegian media market. Obviously GG must have done something to undergo delays and still remain under budget to hit the 20M market. Just the cost of the 45 people (the 200 number came from this thread, someone siting a local broadcast notes it was 140, whatever it was it was above the 45 initially on hand) overthat 4 year period is substantial. I don't know which of you have ever run a business, but if you have a 50K a year employee and start tossing in the cost of benefits and insurances, payroll taxes, liabilities, supplying the cost for workers to do their jobs (quality PCs and software for game dev are not cheap it is easy to see how a dev cycle like this would be expensive internally.

Not including all the Sony provided services as the publisher and invested platform owner. I also find it laughable that the KZ2 marketing budget is only 20M but includes 2 major CGIs on top of all the other marketing expenses. I am sure KZ2 gets a free pass on those DLC costs, but even there you can see Sony had a real cost to cover outside traditional avenues (ones which Sony spent a lot of money on I might add).

Lets put it this way: If Sony developed KZ2 with 20M they really are cheating out their partners. They need to have expansive seminars and material for every partner to contol budgets like they did. 20M would be a meager "total development budget" for the length of time and resources invested into the title.

And yet there is a reason that a lot of publishers and even Sony are bleeding like crazy. And we don't hear of a lot of studios chasing the KZ2 appoach to game dev. Because at the end of the day, even if the numbers can be toyed with, a 3rd party has to account for all these "overhead costs" at some point.

If KZ2 was a 3rd party the measure stick would be the amount of invstment KZ3 received. Unfortunately as an invested 1st party asset we are only left with whatever bones the companies wish to disclose (or message... no one wants to be known as the 100B game that sold 10k copies!). But if we see studios struggle with smaller staffs and shorted dev cycles and reasonable sales numbers we can make some basic assumptions. And logic tells me they didn't delay their title and still fall under their project budget projection from 2006 and that is all inclusive of all dev budgets and an expanding dev team.
 
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