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Video Game Development Costs Continue to Rise in Face of Nearly 12K Layoffs Since '08

Industry magazine Develop reports some rather depressing data about the increase in industry-wide layoffs found in a recent study conducted by entertainment analyst group M2 Research. Coupled with the results of another M2 Research report about the increasing cost of game development, the data indicates that the average cost of game development is on the rise, despite the trend of many studios thinning their herds.

According to M2, "...the final count for layoffs since the economic meltdown in late 2008 reached 11,488 worldwide, with the majority of the losses coming in 2009." Apparently, most of the layoffs from the 95 reviewed studios are felt at the ground level. That makes quality assurance staffers often the first ones out the door.

Studio closings like Pandemic, Grin, and 3D Realms have been all-too-common occurrences in the past year or so but studios don't have to be closed to feel the impact. We reported the most recent spat of such layoffs earlier today in which Warner Bros. Interactive let go employees from its studios Monolith, Snowblind, and Surreal.

However, average game development costs tell a much different story. Amidst the industry-wide whirlwinds of downsizing, restructuring, and layoffs many studios are spending more on development than ever before. M2 Research also reports (via Develop) that games developed for a single platform cost an average of $10 million. That said, the average cost of a multiplatform "nex-gen" game is currently reported to be around $18-$28 million.

Of course, there are almost always exceptions to the rule. Infinity Ward's Modern Warfare 2 is rumored to have cost around $50 million to make, and Polyphony's Gran Turismo 5's budget is rumored to be around $60 million.

From The Chatty
  • reply
    January 12, 2010 7:05 PM

    How hard is it just to have an actual full time job making games? Seems like people get fired immediately after a game is completed. This needs to come back and bite these companies in the ass at some point.

    • reply
      January 12, 2010 7:55 PM

      It really depends on the discipline. If you're an engineer (especially a good one) then (as far as my experience goes) your job is very stable. It's much harder for artists to get a full time gig, instead of a temp contract.

      It's not always the case that everyone is let go, but more so that contracts end and are not renewed at the end of the project. In the end the individual doesn't have a job, but firing vs. contract ending are two different things.

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