Video game development has gone from a solo effort into a billion dollar business, where armies of coders, production designers and other staff work to produce blockbusting virtual experiences.

A VISITOR from another planet who came to earth in the mid-1980s, played some computer games, returned to their galaxy, and then returned for a quick go on today’s modern consoles, would surely be amazed at the progress made in game development. While hits from 25 years ago such as the ZX Spectrum’s Manic Miner were programmed by one man, today’s mega titles like Activision’s Call of Duty: Modern Warfare 2 (MW2) have budgets in the millions of dollars and can require teams of dozens if not hundreds of coders, programmers, actors and artists.

While the technology available to developers has advanced rapidly, so have the risks inherent in producing a game in a crowded market which could become either the next Half-Life 2 if you’re lucky, or the next E.T. the Extra-Terrestrial if you’re not.

Today’s major titles like the aforementioned MW2 are more akin to blockbuster movies than the arcade games of yore. The comparison with Hollywood is not incidental. Modern Warfare 2 had a budget of 40-50 million dollars, similar to a mid-size film. The launch budget, including marketing expenses and production and distribution costs, was around 200 million dollars – a budget which Michael Bay, whose movies this game in particular are reminiscent of, wouldn’t turn his nose up at.

Big shark

“My goal was to create a launch that would compare very favourably to the biggest box offices of all time,” Activision Blizzard Chief Executive Bobby Kotick said last November at the game’s launch. Although this type of mega-bucks financing is still relatively rare, it is becoming more common. The upcoming Gran Turismo 5 has a budget close to 60 million dollars, according to the production studio’s head Kazunori Yamauchi. Taken as a whole, the U.S. games market is worth well over ten billion dollars, with the Japanese market being even bigger.

If the game in question has an astronomical budget, it’s fair to say that gamers are willing to pay back the expense with interest. In the eight days after its launch MW2 had generated a record 550 million dollars in sales, selling around 8 million copies, with analysts predicting future total sales to be somewhere from 15 to 20 million units, representing revenue of over one billion dollars.

Grand Theft Auto IV, released in 2008, took in over 500 million dollars in its first week, which was more than the opening weekend of the movie Spider-Man 3. With online gaming concomitantly increasing in popularity, income for games companies is potentially a much longer term factor. Downloadable content such as map packs and expansions are much in demand from avid gamers.

Little fish

While the success of major titles from massive studios funded by the likes of Sony, Microsoft, EA and Activision form the backbone of gaming’s stratospheric rise in popularity, the view is not necessarily so rosy for smaller developers. Competing directly with major brands can be a one-way ticket to bankruptcy.

Creating a niche product is one way of increasing the likelihood of economic survival says Simon Bradbury, director of the independent Firefly Studios who are best known for their series of PC-only castle building simulation games called Stronghold. “The series to date has sold over five million copies but has cost a lot to make,” he tells SixDegrees.

“We think it has been successful mainly because it occupies its own space in the computer games world. We do well because we are only really half RTS [real-time strategy] with the other half being this unique builder type of game.”

Different types of games require different numbers of personnel to execute properly as well as different lengths of time to polish off, according to Bradbury. “I’d say that the straight PC games take more man months to create but our new MMO [massively multiplayer online game] Stronghold Kingdoms for example has actually taken longer to make because we’ve had to learn a whole new set of tech over the last three years,” he says.

“A simpler MMO is currently an easier way into the games industry for new developers as a lot can be achieved with a couple of guys - whereas a fully feature-rich RTS will take a team of ten people as a very bare minimum.”


A typical team working on a PC game would consist at a general minimum of one lead designer, four or five artists, about four coders, two or three level builders and testers, and a couple of producers who glue it all together.

Like any business these days, you’d also need someone looking after web sites and someone to keep an eye on the finances. Constant improvements in hardware coupled with increased demands from gamers, as well as a general expansion in the user base, have made Bradbury’s job more difficult.

“It’s become harder for sure for us PC strategy developers. Partly because of the need to create and display better graphics, but also because the games get a higher degree of polish and user feedback with every year that passes. For action games like FPSs [first-person shooters], for example, the bar has gone through the roof. These titles are now almost a different industry, with film-like budgets meaning much tighter production control – again making it more expensive. The manpower required to create a modern believable story driven shooter is insane.”

As anyone visiting a games store will have noticed, a large number of new releases are sequels to previously released titles, which has had the knock-on effect of encouraging developers to often stick with tried-and-tested solutions rather than create something truly innovative.

“Major titles are so expensive and tightly budgeted now that there really is very little room for innovation in game play. There can be better or worse implementations as far as story and graphical realisations go of course, but, in my opinion, the formats are now set in stone,” Bradbury suggests.

So on the one hand, companies that develop for what is often referred to as the “hardcore” gaming format – the PC – may find themselves having to rely on niche products to ensure success. The incredible popularity of console gaming all over the world has created more opportunities for smaller companies, mainly due to the possibility of releasing downloadable titles without the added expense of production and distribution of the actual retail product.

A euro saved is a euro made

Frozenbyte is a Finnish games development company based in Helsinki. Their first couple of games, Shadowgrounds and Shadowgrounds Survivor, were released as PC only titles, but they see themselves moving more towards downloadable titles in the future, as with their latest release, the innovative Trine.

“We are focusing on games which are distributed via downloadable channels, namely games for XBLA, PSN and PC’s downloadable channels like Steam,” Frozenbyte CEO Lauri Hyvärinen explains.

“Our goal is to create premium titles for downloadable channels, i.e. games with enough quality that they would be suitable for retail distribution too. The market for downloadable games is very vibrant at the moment and there’s many benefits compared to retail distribution. It’s also an excellent way for a developer to self-publish. This is the biggest change that has happened in the past few years and we embrace it. Simultaneously the PC retail market for games has become much worse and consoles have taken an even bigger hold of the market.”

As distribution channels have widened, developers are able to release games with budgets of next-to-nothing. “While the trend of increasing development costs has lasted ten years, the rise of new downloadable channels allows developers such as ourselves to create games with budgets ranging from zero to a million euros,” Hyvärinen explains.

“Sometimes even the millions poured into the development of a title doesn’t always result in a high-quality game, whereas very small-budget downloadable games can be true masterpieces. I’d encourage gamers to look at the downloadable channels closely right now and in the coming years, as there may be some real gems there waiting to be picked up.”

In it for the money

While bigger games have massive budgets, the influx of cash doesn’t guarantee that the end result will be a good or successful game. “The greatest hits of 2009 included both sequels and a lot of new franchises, so I’d say it’s getting better in terms of safe solutions versus innovation,” argues Hyvärinen.

“Some of the 2009 hits were made in the downloadable channels by mid budget and experienced developers, such as Torchlight and Shadow Complex (and makers of Trine, if I’m allowed to blow my own trumpet). On the higher budget retail side, there were many great new titles too. As we move ahead into 2010 and beyond, I think – and hope – that this diversity will continue and perhaps even increase.”

But if money is no guarantee of success, then what is? “I’d say a brilliant idea is a good thing to begin with, but it’s not always even needed,” suggests Hyvärinen.

“The game is formed during development, and to get that right you need to have a perfect team with enough resources to make the game they are happy with, given the time limit. So it’s teamwork from start to finish, and there’s always the risk of making just one wrong turn and going straight to hell. But hey – who said its all fun and games?”

Nick Barlow