Why does Gears of War cost $60?

[sabre2922]

http://www.gametab.com/news/771546/

Forbes is running a neat little feature right now called "Why Gears of War Costs $60". It's a reasonable enough question, really -- and there's pie charts! What more could you want from the Internet?

Getting the straight dope on game development costs is, of course, difficult. Gamers know that prices have gone up about 20% for games coming out on next-gen hardware, but the companies aren't exactly forthcoming with specific reasons on how, or why.

Here's the skinny, as far as Forbes' article breaks it down:

ON A $60 GAME OF GEARS:

* 25% (aka $15) goes to pay the art and design guys.
* 20% ($12) goes to pay the programmers and the engineers.
* 20% (also $12) goes to your friendly neighborhood retailer. EB / GameStop, whoever.
* 11.5% ($7) goes to a "Console Owner Fee" - ie. whichever one of the Big Boys made your hardware (Sony, MS, Nintendo.)
* 7% ($4) goes to marketing, and puts Mad World and Marcus Fenix on MTV.
* 5% ($3) goes to "market development" -- paying for cardboard Standees of the Gears Crew and elbowing other games out of the way for shelf space at your local retailer.
* 5% ($3) goes to actually manufacturing and packaging the disc.
* 5% ($3) is spent paying the Man for IP licenses or maybe hiring some big name voice actors. If your game isn't an original IP, here's where you get dinged by Marvel, Disney, or Ray Liotta's agent.
* 1.5% (just $1) goes into the publisher's pocket.
* 1.5% (also $1) goes into the distributor's pocket.
* 0.3% (about 20 cents) goes into corporate costs. Management, overhead, lawyers, etc.
* 0.05% (less than 3 cents) go into the cost of paying for the Developer's Hardware. Who knew an SDKs can cost tens of thousands of dollars?

And there you go. $60 of Gears, a la carte.

OK given, the thread I posted of the Wii dissection and cost was lacking I thought this little article was umm more interesting to say the least.

[MegaDrive20XX]

I dunno bro, it's rather silly, but god I love Gears of War...I wanna be like Marcus when I get older...

[GrayFox]

$10.

Rough.

[DigitalSpace]

And that's not to mention the hidden benefits of shelling out $60 for the disc:

-Cliffy B gets a memo each day of who buys the game. He'll think about you for half a second before going on to the next name on the list.
-Annoying relatives will stay away. Wait, you ask, wouldn't annoying relatives just ask to borrow or play the game? Well, even if they just think of it, the game sends a signal that makes them think of ponies. And as we all know, anytime a relative brings up ponies, it's time to kindly show them the door.
-Somewhere in a dark office at EA's dunge - er, I mean World Headquarters, someone is getting yelled at for not thinking of this.
-Your lawn gets emo and cuts itself. More time for playing Gears of War!
-And finally, upon learning you own the game, women will want to do unspeakable wonderful things to you.

It's a cornucopia of awesome!

[FantasiaWHT]

Retailers don't make 20% margin on video games, that's BS

[Porksta]

Thank god for PC's, or we would not be able to make pie charts.

[Slate]

And that's not to mention the hidden benefits of shelling out $60 for the disc:

-Cliffy B gets a memo each day of who buys the game. He'll think about you for half a second before going on to the next name on the list.
-Annoying relatives will stay away. Wait, you ask, wouldn't annoying relatives just ask to borrow or play the game? Well, even if they just think of it, the game sends a signal that makes them think of ponies. And as we all know, anytime a relative brings up ponies, it's time to kindly show them the door.
-Somewhere in a dark office at EA's dunge - er, I mean World Headquarters, someone is getting yelled at for not thinking of this.
-Your lawn gets emo and cuts itself. More time for playing Gears of War!
-And finally, upon learning you own the game, women will want to do unspeakable wonderful things to you.

It's a cornucopia of awesome!

[googlefest1]

where is the percentage that is the profit of the game maker - this only lists some costs

[s1lence]

The better question would be, Why does Gundam cost 60 bucks on the PS3?

[agbulls]

Retailers don't make 20% margin on video games, that's BS

Fantasia, you're 100% correct. I was a DM for EB Games for 3 years--and can tell you from looking at cost reports that this is bull. On a $50 game, EB/GS is pulling in around $6-$7. Why do you think they want to sell you the used game so badly? Remember, that $6-$7 isn't including the cost of shipping the game to stores, or paying the people to work there.

[XianXi]

Retailers don't make 20% margin on video games, that's BS

Yes they do. When I was a buyer for a retail company most of the games we bought were between $35-40 and would retail at $45.99-49.99

[j_factor]

So where does the $10 difference come from for Wii games? Do they just pay their employees less or what?

[hezeuschrist]

So where does the $10 difference come from for Wii games? Do they just pay their employees less or what?

Essentially, yes. Same percentages, different amounts.

[jajaja]

So where does the $10 difference come from for Wii games? Do they just pay their employees less or what?

It cost less to develope the game so they can sell it cheaper.

Speaking of costs, anyone knows why on earth it cost so freakin much to develope a game. I.e Red Steel for Wii was like 13-14 million dollars. How can a "shitty"* game like this cost so much to make?


* = Got numerous of bugs, gfx looks like a GC game from 2003 etc.

[FantasiaWHT]

So where does the $10 difference come from for Wii games? Do they just pay their employees less or what?

I'd say the "console owner fee" might be significantly less, since Nintendo doesn't need to make up for losing money on their systems by charging more to license games.

[6502]

I'd say the "console owner fee" might be significantly less, since Nintendo doesn't need to make up for losing money on their systems by charging more to license games.

This is Nintendo...I remember reading an article shortly after the Gamecube came out that talked about how Nintendo had finally lowered their royalty fees down to the same level Sony and MS were at. Nintendo's always tried to get away with as high of a royalty fee as possible, so it doesn't seem likely they've suddenly changed policies with the Wii.

[DreamTR]

From what I understand, if you buy in BULK directly from the distributor or company, the prices are a bit better.

GameStop NO QUESTION gets a better rate than brick and mortar stores.

$49.99 game from Brick and Mortar = $41-43 distributor cost
$49.99 game from Wal-Mart/GameStop= $35-41 cost at BEST.