Investing in games may seem costly, but the demand for games is growing — and profit from games increases alongside it. Precise numbers for the last year aren't quite there yet, but it’s estimated that, in 2021, the industry’s worth grew by 14.4%, reaching $178.37b and the sales jumped up by 63%.
More and more people a) start playing games, b) ready to pay for them or in-game items. This article will outline a video game budget breakdown for you to start estimating how much you need to invest to craft a good game and how to optimize your expenses along the way.
Take a Look at How Video Game Cost Estimation Works
The real costs of video games range. Let’s size up the averages and then dive into the details.
Free Preliminary Cost Estimate
So: how much does it cost to make a video game in 2022? For production alone, the price lands between $50,000 and $700,000.
The Exact Price for the Development of a Video Game
To figure out a more accurate estimate of a budget, consider five fundamental factors that impact it.
These factors are the main influence on the cost — but keep in mind that there are also marketing & advertising costs, community management, HR-related expenses, etc.
Also, keep in mind that the rates will change depending on developers’ seniority. For instance, in America, wages of senior Unity developers fluctuate between $60-$70/hour. Junior Unity devs get $30-34/hour. Developers’ salaries will also depend on how rare the technology you want them to work with is; if that’s an unknown, new SDK — and you want them to be real good at it — the payment expectations might jump up.
How to Calculate Video Game Development Budget
Now that you know the general picture, let’s dive into specifics.
Development Team: The Salary
The average team of developers is a group of at least 5 specialists:
- Game Designer. This person implements all the details from a game design document (GDD), develops the world’s system, designs levels, internal economy and balance, UX, monetization mechanics, gathers narrative together, integrates interface-related controls, etc. Their services’ cost per hour is $40/hour in the USA and about $30-$32/per hour in Europe.
- Developers. Developers work with game engines (Unity, Unreal Engine, Godot, Phaser, internal custom engines) and write in C++, C#, UnrealScript, Java, etc. to code through the game’s physics, art assets, mechanics, internal behaviors, etc. Their hourly rate is at the average of $48 in the US, and about $32-$38 in Europe.
- 2D/3D Artist & Animation Artist. People who make everything beautiful & moving. Animators are paid $16/hour in Europe, and $30/hour in the USA, on average. Game 2D/3D artists get $26-$36/hour (but those who do assets for 3D games are usually paid more.)
- Sound/audio engineer. An audio engineer creates and masters SFX, creates genre-related ambiances, curates soundtracks, works with voice actors, and edits voice samples. In Europe, audio engineers charge $10-$20/hour. In America, the average rates range from $22 to $55.
The budget of your product will depend on:
- Where your team is;
- How many people are in your team;
- Team members’ hourly rates;
- The urgency and complexity of a project.
Let’s calculate it together using the formula below:
Suppose there are 7 members in the team, and, together, their average rate is about $32/hour. The game is mid-sized — the production will take about a year. Your estimated game cost is ($32x8)x7x20)x12=$430,080, if you’re working with a team from Europe.
Developers aren’t the only people you’ll need for game development. Project managers, character and environmental artists, narrative writers, game economy designers, and other specialists are often important to create a compelling player experience, too. Understand what aspects of the game — aside from development — you’d want to focus on from the start and allocate costs accordingly early.
Software, Software Licenses, And Data Needed For Development
Add costs of software licenses, plugins, and services your team will use in the estimate.
You’ll definitely need a game engine. Game engines Unity and Unreal, for instance, charge nothing if the game doesn’t make $1 million. GameMaker Studio’s subscription tiers range from $4.99 to $79.99/month. There are open-source free options like Cocos2D, too. Paid ones need to be renewed every month or year.
Subscription prices for sound design tools like tools Wwise and FMOD start at $750 and $2,000. You’d also need software for 3D modeling (Maya, Blender), graphic design (Photoshop, SAI), software for data and project management, and so on.
You’ll also need to pay for data storage and servers (in AWS) and analytic solutions that’ll help you track players’ behavior. Plus, if you want the game to be released on consoles or in mobile play markets, you’d need to pay console manufacturers (for their development kit) or to get ready that a part of your revenue from in-app purchases or downloads will be given away to the publisher (App Store, Google Play).
Mind the ownership rights for soundtracks, images, and other in-game assets. If you want a cool song to play in your game, buy the rights to use it. Also, you can’t take Trinity from The Matrix: Path of Neo as a character for your game and can’t use Harry Potter’s world as your setting without paying for an IP.
Patent protection extends to technical solutions, mechanics, and hardware. For example, to use the Nemesis AI from Middle-earth: Shadow of Mordor in your game, pay WB Games for the patent.
This concerns logos, character’s design, magic animations, etc. — they have to be unique or you have to pay to put them in-game. Also, if you work with independent freelance artists, buy rights to use their work as well.
Purchasing The Right Equipment For Development
The equipment you’ll need for your game affects the budget. (Even if you work with a third-party partner, the skills of working with specific devices justifiably add to your team’s hourly rate.)
You’ll need to buy different devices for testing a game: old and new consoles, devices on iOS or Android platforms (iPhones, iPads, tablets, etc.), Nintendo Switch, PCs with different characteristics. VR games will require VR headsets. Plus, people who work with game engines must have powerful PCs/laptops to withstand the pressure of rendering.
For Content Creation
Add to the estimate the rates of voice acting and renting a studio (or equipping it by yourself.) Artists and animators will need drawing tablets, powerful PCs, and monitors with good image resolution.
Post-development expenses impact the real costs of video games, too.
Quality assurance, testing experts build confidence in the level of quality of the game, find defects and failures. The budget for testing will depend on when you start testing and what type of testing the game needs. Assign 10% of the whole budget to QA and testing. Their hourly rate is $9–$35 on average, depending on the country and type of testing they perform.
Marketing activities should begin in the background of the production. Cooperate with streamers and game journalists, be active on social media, do everything to show people what you develop and why it’s cool. The marketing budgets are hard to estimate because they’re extremely dependent on how much you’re willing to pour into promotion.
Applying the Cost Minimization Strategies
Now, let’s get to three ways you can cut all these costs.
Automate. Introduce automation in testing and QAs, patching, updating, use project management software that allows for establishing of on-demand workload. That will cut costs of repetitive work, streamline the development, and allow your team to prioritize better.
Implement Agile & DevOps practices. Establish better collaboration between backend team and game designers, shorten write-release-test cycles to spot errors and bugs early, add CI/CD practices to integrate testing into development.
Add a QA specialist to your team as early as possible. It will help to prevent defects in future by checking requirements, user stories, design, code, etc. at an early stage.
Outsource. In-house teams are expensive to hire, onboard, and manage, which is why so many big game studios are outsourcing game development (or some aspects of it) to build a game more affordably. For example, you can hire an external team if you don't need to have one on a permanent basis (to do separated tasks like localisation testing, sound design, and others.)
Understanding the Stages of Video Game Creation
Why does game production take so much time and money? Well, because it’s a complex process:
The first stage is about project ideation. You conceptualize the game's idea, decide on the game type, platform, features, and characters, define target audience and timeframe, etc.
Pre-production has its own three stages of documentation: your team develops a brief description of a game, a pitch (game proposal you’ll show to publishers), and a concept document. They form a GDD. Then, GDD helps create wireframes and game’s prototype that covers the game's story via storyboards and sketches and includes descriptions of the main mechanics and game’s settings.
A stage, where the development happens: modeling, designing art and visual effects, designing audio, coding, scripting, and more.
The game must pass QA audits within the team, then — with a selected group of playtesters. But remember that testing it’s a regular process after any changes and it can be performed even from beginning of development
Beta- and alfa releases are exactly where playtests happen. Players help you identify what you couldn’t cover and you react to feedback. The most intensive marketing also happens here, hyping up your audience for the launch.
Time to define a hierarchy of bugs, kill what you can, and polish the game. History knows no perfect releases, so it’s time to prepare for the feedback again — on a bigger scale.
Your game is live. Regular maintenance is a post-launch priority. More bug detection & killing is required, plus it’s time to build new patches for fixes. Also, content for the new chapter of your game waits for development.
Find out more about how the game development process works in iLogos.
High-Cost And Low-Budget Famous Games Examples
How much do video games cost if they’re developed by a large game studio? GTA 5 cost a fortune – $265M, Final Fantasy VII — $145M, Dead Space 2 – $120M. Genshin Impact’s development costs $200m/year in 2022 and had a dev & marketing budget of around $100m pre-release.
The inexpensive games with mind-blowing profits are Terraria, Minecraft, and Rocket League.
Choose the Right Company To Develop a Game
To pick a good partner to craft your game, check:
- reputation (reviews, client’s feedback; don’t be hesitant to contact their previous clients!);
- portfolio (case studies, reviews of their games in stores);
- services they provide (are they good at the genre/type of game you’ve chosen?)
- process of producing a game (will they cover the stages of development you want them to cover?);
- hourly/monthly rates (can you afford their rates?)
- advanced tech competencies (are they skilled enough in the industry to continue working with them post-release — if you’ll need, e.g. to expand to other platforms?)
Game Genres That Will Get All The Attention in 2022
Single-player or multiplayer? Puzzle, shooter, or horror? Choose the one from the most profitable categories in 2022:
Massively Multiplayer Online Role-Playing Game
Examples: EverQuest, Blade & Soul, 9Dragons.
Multiplayer Online Battle Arena
Examples: Dota 2, League of Legends, Smite.
Examples: Ring of Elysium, Cyber Hunter, Spellbreak.
Now that this piece has answered the question of the game development cost, remember: if you’re scared you won’t get revenue from the game, it’s not a reason to abandon your idea. You need only the first part, chapter, or act of your game playable to start monetizing.
Why Does It Cost So Much To Make A Video Game?
Increased demands – increased prices. Online games form a billion-dollar business with growing revenues year-to-year, so employees who make it happen charge accordingly.
What Is The Average Cost Of A Video Game?
A typical video game’s cost for production alone is $50,000–$700,000.
How Much Does It Cost To Develop An AAA Game?
Video game budgets for Triple-A games start at $10M.
What Are Video Game Budgets?
The budgets start at several thousand dollars and skyrockets, depending on skills, technology, and promotion that need to be involved to launch it successfully.
Why Is Video Game Development So Expensive?
Game making is a lengthy and labor-intensive process — and good games are extremely profitable.