KZ2 and game budgeting in general *spin-off

[obonicus]

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.

Then you're not including marketing? Where does it fit in, between the concept and the shelf?

 

[Acert93]

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.

Only if you are determined to stick by PR budget numbers whch, as I pointed out, are not in the interest of Sony to be inflated.

If you were an employer, how much would it cost you to pay for ~50 programmers and artists for 4 years including all pay, benefits, and business expenses?

Now put that into a 3rd party scenario where there is no nebulous "overheard" that some platform holder picks up the tab and magically takes off your development tab...

 

[obonicus]

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.

This, in essence, is what scificube was talking about. If we're going to say 'those numbers are wrong', we have to do it with more than 'I've got a gut feeling, it doesn't add up'. They have made numbers public. We have NOTHING. The burden of proof is on us if we want to discredit numbers, and this applies to any numbers that have an official source.

 

[joker454]

Then you're not including marketing? Where does it fit in, between the concept and the shelf?

Definitely marketing as well! So update it to be concept to shelf to the users home, for clarity...

 

[patsu]

Only if you are determined to stick by PR budget numbers whch, as I pointed out, are not in the interest of Sony to be inflated.

If you were an employer, how much would it cost you to pay for ~50 programmers and artists for 4 years including all pay, benefits, and business expenses?

Now put that into a 3rd party scenario where there is no nebulous "overheard" that some platform holder picks up the tab and magically takes off your development tab...

Well, we have the devs CEO openly boast about their budgets. So I don't know if they are PR budgets or we are just being... ourselves. How much overhead and additional resources do cross platform titles add ?
Note that the articles use Euro not US$

Despite R2's disappointment, I am still freaking amazed at Insomniac's ability to deliver a full game with 3 totally different game modes in 2+ years.

 

[BadTB25]

How is this relevant to the topic ? In general, the answer is no.

I think the relevancy is that if you budget to spend $5M on a title, but when you show it at E3 or some press events and the media is giving you a negative reaction.
Do you go ahead and spend that money anyway or do you pull back and cut your losses.

I think its relative to a discussion about budgeting because it adds an element of flexibility. When company A the game is going to cost $20M, does that mean that money is spent regardless of how it turns out? Will the number grow if the company thinks they are on to something and want even more "awareness" of its product? Will it shrink? They all can effect the budget.

From the title, it appears that this more than just about KZ2.

 

[patsu]

I think the relevancy is that if you budget to spend $5M on a title, but when you show it at E3 or some press events and the media is giving you a negative reaction.
Do you go ahead and spend that money anyway or do you pull back and cut your losses.

I think its relative to a discussion about budgeting because it adds an element of flexibility. When company A the game is going to cost $20M, does that mean that money is spent regardless of how it turns out? Will the number grow if the company thinks they are on to something and want even more "awareness" of its product? Will it shrink? They all can effect the budget.

From the title, it appears that this more than just about KZ2.

Money is usually dispensed at regular checkpoints. Very seldom do people give you one lump sum up front. I assume this is the case for the gaming industry too.

In a few cases I know (non-gaming), it's even reimbursement-based. i.e, You have to spend your own money first. So you must be f*cking sure !

Once the budget is allocated, it is possible that the project could not use all up.

 

[Silent_Buddha]

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.

Very true, and if that 21 million quoted in 2006 was the budget for KZ2 being completed on time with no delays.

If the title is delayed that budget goes out the window as it does for all games that are delayed. How much it goes over 21 million depends on whether they had to also bring in more people in an attempt to get the title out without further delays.

Added to that, if the title it being delayed, there's a good chance that you probably had people working overtime before the original deadline trying to make the deadline. And overtime just multiplies cost.

I think it's probably safe to say that the actual developement costs (not including marketing) is probably somewhere between 21 million and 40 million euro's. Depending on how long the game was delayed and how over budget it was due to delays.

Regards,
SB

 

[Acert93]

This, in essence, is what scificube was talking about. If we're going to say 'those numbers are wrong', we have to do it with more than 'I've got a gut feeling, it doesn't add up'. They have published numbers. We have NOTHING. The burden of proof is on us if we want to discredit numbers, and this applies to any numbers that have an official source.

Besides common sense math not working (still waiting on the Forbes link) note that the cotext is the Netherlands and a budget projection from 2006 BEFORE the game was delayed. Sticking to "20M" like most of you in the first couple pages with this attitude neglects the nuance of the numbers (20M+, Netherlands, before delays, before project expansion) to begin with.

Anyhow, Sony needs to make more than 40M (convert that to USD and that goes much higher) to even get close to "breaking even" by the most conservative numbers. Would anyone disagree with this? As it stands, your arguement needs to be directed at those making cases for the game already breaking even and noting minimal "development costs" with no certainty of cuts and costs. Essentially you are argueing all posts are worthless which begs the question why you posted all your numbers to begin with

 

[patsu]

They didn't manage to deliver in 2006 doesn't mean they have used up all the US$21 mil budget at that time. It's allocated. Doesn't necessarily mean it's all spent.

 

[Acert93]

Well, we have the devs CEO openly boast about their budgets.

If you are nationalistic and you are bringing in serious media business to a smaller market this is a good thing to trumpet to local press (which is EXACTLY what the article I linked to was doing). Of course that article is old old old.

 

[Acert93]

They didn't manage to deliver in 2006 doesn't mean they have used up all the $$

Delayed and under budget!

Lets just continue to argue how we can cut out (or magically include) all costs and then go back to projections like earlier in the thread about the break even and profit points ... sheesh!

 

[patsu]

??? I have a $50 million project that got delayed for a year but I still came in way under budget in the end. Do you have their books ?

In KZ2's case, where is the under budget ? The reported one is 20+ mil Euro which is more than US$21 mil. Sorry, it's 40+ mil Euro total budget.


I'd love to see Insomniac's project costing though.

 

[betan]

I don't have time for a long post patsu........................

nice one

As for the goggling the forbes article, I'd think the first hit with [Forbes gears of war] keywords would be the one you were asking for. The numbers are on the ecmascript/image slide show.

I'm curious though, what other per disc expanses you guys know/expect such that $40+ sounds too high to you?

 

[joker454]

I'm curious though, what other per disc expanses you guys know/expect such that $40+ sounds too high to you?

The numbers I've heard batted around are $20/unit for 3rd party and $30/unit for 1st party. But this is just from chatting with others in the biz, no clue if it's accurate or not.

 

[scificube]

The simple matter here is that there is no agreement on what should be attributed to the cost of developing KZ2, how much of that cost is amortisized, how much it *actually* cost to produce KZ2 and by what definition would KZ2 be considered a successful venture in light of the *numbers.*

There is no solid basis from which we should extrapolate anything here.

Somehow...one groups says Sony is lying because its in their best interest...yet the same can be said of outsiders who are "proud nationalists" or skeptics or whomever else we should enlist to drum up assumptions from nothingness...none should be merited as proof of anything.

None of that is solid.

The only reason the cost of KZ2 is relevant is to judge whether others should follow suit. Well, unfortunately KZ2 tells us nothing new. What studios choose to do is up them. Pushing for the boundaries will cost you more and be a more risky undertaking while not doing so won't be on the average. This is no great revelation. Another question posed is whether Sony should have invested as much as they did in KZ2. I really don't see a need for numbers to answer that question. The answer is yes because Sony must differentiate its platform from the X360 and if not KZ2 another title would serve the exact same purpose. In fact, title*s* are already being lined up for that sole purpose with budgets that will eclipse KZ2. Fiscally Sony's first party efforts have almost all been profitable which is all that is required despite the desire for earth shaking blockbusters. Until the practice stops yielding ROI I'm not sure how much there is to discuss on the matter to be honest.

 

[ErnstH]

Fiscally Sony's first party efforts have almost all been profitable which is all that is required despite the desire for earth shaking blockbusters. Until the practice stops yielding ROI I'm not sure how much there is to discuss on the matter to be honest.

Opportunity cost. It's more a question of couldn't they have spent the money on more profitable ventures.

 

[scificube]

Opportunity cost. It's more a question of couldn't they have spent the money on more profitable ventures.

Is it really a question?

The answer is yes. The answer is no.

The could spend less and make less. The could spend more and make more. The could do any permutation of the two.

It is not as if Sony will spend as much on every first party title as they did on KZ2. On some titles they will spend as much and on some titles they won't. On some titles Sony will rake it in and on some titles Sony won't.

Something I think is lost in discussion here is the KZ2 was a sequel to a title that was largely panned by the media, and itself served as whipping boy #1 for reasons that shouldn't escape anyone and others that had nothing to with KZ2 itself. KZ2 is not a followup to a God of War or Gran Turismo game and the franchise very much has to earn the right to be considered one of the big dogs with the likes of them to Sony, the media, and consumers. KZ2 merely established faith in the franchise and Guerilla Games on the whole. The real test is KZ3 as far as I'm concerned.

 

[V3]

Now I wonder what FFXIII's budget may be...

Well previous PS FF is around the 40 mil. So perhaps this one is in the same ranged too. The Japanese seems to be able to get more with their budget compare to western devs. Maybe the devs in Japan don't get paid as much.

Also they normally get 2 millions in Japan alone. And they have DQ9 to fall back on if FFXIII tanked.

 

[V3]

The real test is KZ3 as far as I'm concerned.

Franchises generally degrade overtime. If KZ2 can't beat the original KZ the chance that KZ3 will is close to zero.

Frankly I just don't see the appeal of KZ. The original material that they rip off has limited appeal to begin with.