Where does the money go?
polycounter lvl 9
So people keep saying, 'there is more money in games than films', but I see no evidence of that whatsoever. The film industry is full of rich producers, Hollywood types, actors, starlets etc, that are obviously ooozing money. I see no evidence of this in games, no over the top coked up producers, gold ferraris etc. Instead we have CliffyB, and good old Cliff Blezinski cant be taking ALL the industries profits :P
Can he?
So either someone is exceeeeedingly rich, and keeping it quiet, or its simply not true, OR
Games cost more to make than films, and the returns for all but CoD and BF3 games are smaller than they are for a similarly successful film. If so, this seems a total mess, considering how complicated, time consuming and expensive films can be to make.
Anyone got any facts and figures, budgets, returns, who gets the profits, what are the money sinks?
I am not complaining at all from a personal point of view, I am very happy with what I earn, but this mantra of 'theres more money in games than film' doesent add up at all from what I see in production, and Ive worked in both.
So, whose making the money?
And whose wasting the money? :P
Can he?
So either someone is exceeeeedingly rich, and keeping it quiet, or its simply not true, OR
Games cost more to make than films, and the returns for all but CoD and BF3 games are smaller than they are for a similarly successful film. If so, this seems a total mess, considering how complicated, time consuming and expensive films can be to make.
Anyone got any facts and figures, budgets, returns, who gets the profits, what are the money sinks?
I am not complaining at all from a personal point of view, I am very happy with what I earn, but this mantra of 'theres more money in games than film' doesent add up at all from what I see in production, and Ive worked in both.
So, whose making the money?
And whose wasting the money? :P
Replies
http://www.forbes.com/sites/johngaudiosi/2012/07/18/new-reports-forecasts-global-video-game-industry-will-reach-82-billion-by-2017/
Edit: Bleh other article was from a pay site
Cliffsnotes: The game industry is worth less today than the film industry was worth 6 years ago.
Can't find a good estimate of what the film industry is worth today but its between 108-180 billion. The game industry is worth 67 and isn't even projected to get to 100+ by 2017.
http://www.bloomberg.com/news/2013-04-26/activision-ceo-s-64-9-million-puts-him-in-top-ranks-of-pay-1-.html
those would be the major share holders. they usually get seats on the board of directors and have an influence on management. they are the top of the pyramid so to speak.
any publicly traded company produces quarterly financial reports. those reports are read by investors, annalists etc. privately held companies are a little harder to get info on but they generally release figures also if you look for them.
EA financial reports.
http://investor.ea.com/releases.cfm?ReleasesType=Earnings
Need we say more?
seriously though the cost of developing triple a games is skyrocketing(people being the main production cost) and return on investment is getting lower (less breakout hits) and unlike hollywood you don't have multiple points of sale for your product(that don't necessarily overlap i might add). also hollywood has multiple ineffciencies that allow people to get rich (studios, affiliates, subcontractors(people who need to be paid before the movie makes any profit so to speak) ). in games it generally comes down to the developer and the publisher, and maybe a few different distributors. and only one audience for the games they produce. plus nothing is a surefire hit.
TL;DR a bit goes to execs sure but most of the profit would go back into the machine to try produce a few more hits(to varying degrees of sucess). also explain why moneymen fire so many when projects complete
I remember some guy couldn't have a raise because he was literally maxed out for the cap of artists. smh.
Id like to see some of these ceos taking $1 salaries like Zuckerburg, Google execs etc. Its pretty much proof that their passion isnt about making great games but make money.
Development costs have indeed gone up quite a bit,(for some reason we zbrush the rope in the corner of the room that the player sees out of the corner of his eye for two seconds before moving to the next room.) but there is still a ton of money being made. Just check the link I posted.
Bobby Kotick was paid 64.9 million in 2012. Don't be fooled. Games are still making money. Is our current model sustainable? absolutely not. we need to address the problems that production brings in concern to the budget. If they weren't you wouldn't see continued production on more halo and CoD games.
Also most of the wage was based upon stock awards, from his $159 mill in stock.
yeah its a bit shit but you have to look at it in context, its not like the company brought in 100 mill, and he brought home 60 mill out of that. Activation blizzard made just short of 5 BILLION, that's $5, 000, 000, 000.
Very true, but thats a big part of my point, they're making a ton of money, and I have to wonder what the hell they are doing with it because it seems like they're laying off quite a few people.
20% of the games make 80% of the money.
Yes, this is a major problem with the games industry. One of the biggest problems facing the game industry today is the utter lack of a middle market. And publishers and developers have no one to blame for that but themselves. There have been proven instances of middle-of-the-road titles sold at lower prices succeeding. But everyone seems to want to chase the next Call of Duty or World of Warcraft.
A much more realistic approach to game development and marketing would see a much larger number of mid-tier titles with lower development budgets and lower initial prices. Stable sellers with a higher return on investment, (thanks to lower-cost development) would provide a much more sustainable business model.
The market for such titles exists. I'm constantly baffled why the major publishers never seem to see it. This obsession with "blockbusters" is going to end up killing the home console industry.
I've never worked in film but I run into people who get burnt out by Hollywood and come to the game industry for higher wages and stability (WTF?) so it sounds like a pretty rough field to me.
Justin, yeah I wasnt focusing specifically on artists here, Ive never worked in film as an artist either, I was a sound recordist and boom operator, and never on anything particularly big, but there just seemed a lot more money floating around, from funding, to high daily rates, to per diems, crew lunches etc etc.
Which makes sense, as we have established that there IS a lot more money floating around the film industry, and the idea that there is more money in the game industry than the film industry is not true.