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Average Development Costs Soaring

January 14, 2010 Written by Cameron Teague

One thing that may be getting lost in the shuffle of this current generation at times is the fact that with the updated hardware and the growth of the gaming industry, development costs have also seen a sharp increase and it looks to be getting worse.

In a recent study by M2 Research, an entertainment analyst group, the average development budget of a multi-platform is now $18-$28 Million.   The cost drops to around $10 Million for a game released on a single console.  These prices shouldn’t be a shock as the high profile games top the $50 Million mark without breaking a sweat.  The figures are putting concern on the faces of many in the development community.  In an interview with Develop, Robert Walsh, the CEO of Krome had this to say about rising development costs.

“I think that’s one thing that the press, to a certain extent, is forgetting. They’re saying sales have increased over ten percent since last year or whatever; I mean, dev costs have probably doubled or tripled in the console transition.”

The effects of these high development costs have been evident in the multiple layoffs around the industry and the many games that have been canned.   It would be nice to think this trend would not continue but as games continue to getting bigger, so will their budgets.

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