Quite often when we deal with potential business proposals to build games or license our IP, we hear the statement “You guys are expensive”, “The cost is too high”, “It doesn’t fit into our budget”. We cant really complain there since as a customer they have the right to determine what they should or can pay. The idea behind this post is to throw some light on some of the misinterpretation or difference in understanding with the costs of building or licensing games.

First, letting the cat out the bag. Game development is an arduous and expensive business to be in. While the recent advancements in tech and tools have lowered the barriers to enter this industry, it still doesn’t dilute the fact that it needs tremendous amount of time and money to setup and operate a game development studio. The cost of operating this business pretty much boils down to the talents. Designing and Developing good games need greater talents and those talents come at a cost. And we are not even factoring the hardware and endless software and cloud subscriptions. Now with the advent of Mobile gaming, the landscape of the industry has changed. It has allowed publishers and platforms to considerably lower their risks as opposed to Console games, where the investment levels are significant. But with the mobile games segment becoming a crowded market place, it calls for building fairly unique and exceptional experiences that can stand the test of time. This had led to a point where now studios are investing significant resources in development and more importantly, in live-ops and post launch updates. This in turn make the development costs shoot up.

The Garage Company Effect

Given the multi fold growth of the industry in recent times, the amount of game developers, Indie, studios, garage companies, freelance developers have also grown. This sort of a ripple effect has a direct impact on the perceived costs too, as at times publishers or platforms gather quotes from a variety of such developers and base their assumptions on the cost as a lot of those Devs price themselves cheaper to win some business but end up operating with mediocre talents and poor development processes. It would rather be impossible for a studio like us to match our costs with some of those Devs and more often we simply walk away from such proposals. This isn’t to dismiss some of the amazing Developers out there who could genuinely be struggling to get the right costs despite having good talents and we speak for them too!

You pay for the Craftsmanship

Think of a Craftsman sculpting the finest art piece. Well, we would qualify for that.

One of the perspectives we often try to make the potential publishers or platforms see when they approach us for building games or licensing our IP is, they not only pay for the game but for the supreme talents, years of research and development, experience, titles under our belt, the gazillion times we failed, communication skills, understanding the vision, expertise, professional attitude and a whole host of other more important aspects of running a studio. Building games involves skilled craftsmanship, putting in tremendous attention to detail with every aspect of the game, right from the design,the characters, the mechanics, the gameplay, progression, to UX and UI and many other countless areas. No matter what the genre of the game is, the process is always meticulous and thats exactly where a great game and an average game gets distinguished. With such attention levels, there is a tremendous cost associated.

Indian Developers should be cheaper?

One of the other reasons is that at times Global companies have this sense of perception towards the Indian Games Industry when it comes to the costs and assume its got to be super cheap. Sure from the angle of Economics and purchasing power parity, our operating costs should arguably be cheaper than the western counterparts but certainly not at rock bottom levels where one can think of building a Multiplayer Shooter for just a couple thousand dollars. Recently there was an instance where we had some proposals from a European customer to build instant H5 games and they had their own impressions on the costs which was at the other end of the spectrum. They simply assumed that a HTML5 game ought to be extremely cheaper when compared to traditional Android games. Yes in theory and No in practice as it boils down to the scope of the game you are looking at. H5 games and tech has a come a long way where complex game experience are being built in recent times and eventually it makes no difference with the costs as we end up burning more development time on a game with complex features. In this case we ultimately had to walk away from the deal as we simply couldnt make them understand and it simply didn’t make sense.

At the end of the day, the Industry is after all progressing and evolving with better games and talents and this tends to naturally raise the value of the overall business. And hey after all, us Developers would need to live a comfy life too right?

The New entrant’s understanding

New entrants to the business from various other industries generally tend have a different expectation with the costs of building games. For instance we are talking about Individual investors, Advertising Agencies, Brands, TV channels etc. They could be looking to Invest into this business, start to gather the necessary knowledge from the internet and in the process end up low balling inadvertently. We have had several inquiries where for instance, they want to build a game like Subway Surfers or a Match 3 Game like Candy Crush in under a month and for 1 Lac INR ($1500) because they thought it was possible according to their research and the recent advancement in tools with ready made packages in the Unity store allows you to do that.

Well, all we can do there, smile and wave at them!

At the end of the day, the laws of doing general business prevails. You get what you pay for. We are often reminded of the famous art challenge from Mark Crilley where he attempts to sketch a Batman in 10 Min, 1 Min and 10 secs. The results you see below speak for themselves. A simple and yet a great example of how you need to give that necessary time (or money) to achieve that standard of output. Again you get what you pay for. Aside kidding, we continue to elucidate our potential customers on all these aspects and draw comparisons to neighboring industries like Animations, VFX, Advertising where more money gets spent. Games brim with huge potential than other forms of Entertainment with the ability to attract and hook millions of users is multi fold compared to other mediums. Potential investors or companies cannot overlook this fact and got to realize the potential and possible ROI. With any business generating a tremendous ROI, the cost of investment is usually significant and gaming is no exception.

MARK CRILLEY'S 10 Min, 1 Min and 10 Sec challenge

Fortunately we work with a lot of studios and platforms who see the value in working with a best in class studio giving utmost importance to game’s quality and the Development process. While there are negotiations and bargain in the costs with such well informed customers too, it never breaches a certain threshold where it becomes unfruitful. Now this is the priority and mind set we would like to see in our future customers and we will continue to throw light on this aspect the best we can.