Nintendo's own Reggie Fils-Aime states developing games for the Nintendo DS is cheap, costing only a few hundreds of thousands of dollars to develop and only needing to sell 100k units to make a profit. At this level, companies can’t afford to take chances on defining new categories. Double this amount to get the true cost to a company, by the time they promote and manufacture the product. Here’s the problem as I see it: Production values have risen to a level that games are starting to cost $3 million to $10 million to produce. Sierra founder Ken Williams argues that high production costs hinder risk taking and video game innovation. That is really a function of the capacity of the hardware, and the fact that it is not a high-definition gaming box, so we're producing less art than for high-definition games.' ĮA CEO John Ricitiello said in January 2009: 'Development is typically a third to a fourth as much for a Wii game then it is for a PS3 or an Xbox 360 game. In June 2009 Ubisoft reiterated that major titles for PS3/X360 cost $20-$30 million to make and that games for the next-generation may exceed $60 million.

Leading on from this, an Ubisoft executive gave a breakdown of the company's average development costs per game - with a DS title costing between 500,000 to 1,000,000 euros ($785,000-$1.57m), PS3/Xbox 360/PC titles averaging 12 million to 18 million euros ($18.8m-$28.2m) to create for all 3 SKUs, and a Wii game expected to cost 5 million to 6 million euros ($7.8-$9m) to develop. Ī 2008 system comparison analysis by Ubisoft 'Wholesalers typically pay around $30 per game and with the costs of getting the goods to the wholesalers, any co-op advertising or marketing, and return of good contingencies being roughly $14 per game, the publisher is going to typically get $16 for every unit sold. The costs of developing games for the next-generation of consoles such as Microsoft's Xbox 360 and Sony's PlayStation 3 is estimated to be roughly $10 million as compared to $3-$5 million for the Xbox, PlayStation 2 and GameCube.'The exact licensing fee varies based on the manufacturer ( Nintendo, Sony, Microsoft), as well as any deals they may give a publisher, but it can generally be anywhere from $3 to $10 per unit. Companies may invest heavily on a new IP upon which they can create sequels and/or spin-offs in the future. The cost of developing a video game may decrease over time as dev kits become cheaper, more tools are created, developers become more familiar with the platform, and manufacturing costs are reduced. Video game costs and budgets See also: Most expensive games

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