Video Game Development Cost

The biggest takeaway from this is that the cost of game development varies from project to project. It is based on the individual factors of each project.

One of the key factors is the country you develop the game in. Suppose you outsource the project to India, the cost would be on the lower side, at an estimated $30 per hour for a single developer. On the other extreme lies The United States, with a rough hourly rate of $100 per individual developer.

Countries known for game development outsourcing, such as Ukraine, Poland, and the Philippines, also have their own rates. in Ukraine and Poland, the rate comes at around the same ($60 and $65, respectively), while in the Philippines, it is a bit at the lower end at $40.

Bear in mind that these are not concrete figures. The figures can vary according to the skill level of the developers as well. The overall cost would, likewise, be based on the overall time period as well.

Bear in mind that these are not concrete figures that help you determine exactly how much it costs to develop a game. The figures can vary according to a few set of metrics:

• Skill Level of the Developers

In general, the more skilled a developer is, the more the cost would be. Inexperienced and/or low-skilled developers would be cheaper in comparison.

Whether you opt for a skilled or a low-skilled game developer depends upon the needs of your project. For certain aspects that do not require a lot of complicated execution, an inexperienced developer would be apt, as long as they have the proper guidance and oversight. This can result in a significant reduction in how much it costs to develop your game.

But if the project requires the expertise of someone with specialized knowledge in a particular domain, then you must consider opting for someone who has a lot of skills. Especially if something requires hyper-specialization, such as in-depth knowledge of a particular feature in a game engine.

• City

Even within countries, the price would vary depending on the city. For instance, a game development studio in New York might charge higher than a company in Ohio.

There are a myriad of factors that affect the video game development cost ranges based on the city. So if the game development outsourcing company you are aiming to hire belongs to a certain city where charges are on the higher side, you have to weigh in if the higher cost is worth it.

• Specialization

It also depends on the sub-domain the expert you are looking to hire hails from. For instance, a programmer might cost a higher charge per hour compared to an animator of a similar experience.

Country-Wise Segmentation of Game Development Cost

A New Equation to Calculate Video Game Development Cost

So, below, we are giving you a math equation to figure out the ballpark of how much your game’s development would cost.

Time x Personnel Cost

Time = The duration of your project’s development process.

Personnel Cost = The combination of the average cost of developers multiplied by the number of resources required.

For instance, if you are looking at a 3-month project with two developers each at $40 an hour, the overall cost would be:

(90 days x 2 developers x $40 = $7200)

There are numerous factors that determine the overall game development cost of a particular project. Below are 8 of them:

• Scope

The bigger your game, the higher your budget will be. Because the bigger the game, the more time and effort required for it.

For instance, if your game is a multiplayer game with a huge open world and an elaborate storyline, then it requires the designers to first design the entire experience in detail, the developers to code the numerous modules of the game, the artists and animators to create and animate a huge number of assets, and finally, the testers to test the game’s numerous aspects including the network latency

• Number of Resources

Game development teams, be it a small indie company or a large mobile game development services provider, usually have experts from different domains of game development because video game development is an endeavor that requires the expertise of people from multiple domains such as programming, design, art, testing, and project management.

So, in most cases, you require a lot of resources. And the more resources you require to execute your game project, the higher the video game development cost will be, as you must take care of multiple costs, including the remuneration of each individual and different overhead costs.

The more the number of people, the more this adds up and takes up a significant portion of the game development cost

• Experience of The Team

To make a great game, you need great resources. You need people who have both skills and experience.

But the higher your team’s experience, the higher the cost of video game development will be. Because expertise comes at a cost, and most often, to get quality work from experienced game developers, you must pay a premium cost.

The upside of this is that the quality you can expect will also be on the higher side. In addition, it is also less risky than hiring an inexperienced team of game developers.

• Marketing

It is important to market your game. Because if you do not let the world know about your game and its features to the target audience, you most likely won’t make any returns from it.

So, you have to market through the right channels and methods, such as influencer marketing, paid digital and physical ads, and community building.

Whatever method you choose, the overall budget required will have to be a good portion of your game. Rockstar’s Red Dead Redemption, for instance, had a reported budget of $200 million. Similarly, 45% of Cyberpunk 2077’s overall budget was towards marketing the game.

• Distribution

Just as important as marketing and promotion is distribution. You must make your game available at the right time and place to the right players.

There are two methods you can employ to distribute games these days.

First is physical distribution, where you distribute physical copies of your game through brick-and-mortar stores. Usually, this means you manufacture your game’s physical copies and sell them to a distributor, who in turn sells them to retailers, who then finally sells them to the players themselves.

Second is digital distribution, where you publish the digital copy of your game on one or multiple digital stores such as Steam, Google Play Store, Apple App Store, Epic Store, PlayStation Store, etc. Every time a player buys a copy of your game, the store takes a percentage cut of that sale.

Both methods have their own costs involved and can be a huge part of your overall game development cost.

• Software Licenses and Hardware

You need a set of dedicated software and hardware to create games. And both can have a significant effect on the overall game development budget you require.

For instance, game engines, the key driving force behind game development, often have licensing fees. Unreal Engine, from Epic (the engine behind games such as Fortnite and Pathless), takes a 5% cut from your overall generated revenue if the said figure exceeds $1 million. Meanwhile, Unity has different plans you can select from that range from free to $2040 per year.

Furthermore, hardware is just as important as game engines. And game development requires you to have powerful hardware that is capable of supporting tasks such as the creation and rendering of high-quality visuals and complex coding. You can choose to either rent the hardware from outside vendors or purchase the hardware yourself. Both approaches can vary in terms of cost (renting is usually cost-efficient while purchasing all the hardware would be expensive) and also in terms of benefits.

• IP and Licensing Costs

If you decide to use the intellectual property owned by another party, like a company or an individual, then you have to obtain the licenses of these IPs. Most of the time, this means you have to pay for the rights for a certain period of time.

For example, Electronic Arts (EA) acquired the rights to use the Star Wars IP from Disney back in 2013 for an undisclosed fee that is reportedly in the millions. Likewise, CD Projekt RED acquired the rights for the adaption of the Witcher series of books for a small sum of $9500 (which was later re-negotiated after a legal dispute between the author and the famed game development studio.)

Furthermore, IPs can also mean in-game music created by other artists. For instance, publishers like EA and Rockstar obtain the rights to use music from artists and record labels for a certain period of time, often for hundreds of thousands of dollars.

• Maintenance

Today, games do not cease being developed upon release. In fact, for a few games, the real effort just starts after the release, with the initial public release acting as a mere beginning.

These games rely on LiveOps for the most part. LiveOps involves the introduction of new features and content with the intent to prolong the lifespan and monetization period of the game. Performing LiveOps can be a huge factor in the overall game development cost as it prolongs the development duration of the game.

But even if you decide not to do LiveOps, you still must support your game for a period post its release. This can include listening to the feedback your players give and then rectifying the bugs and issues they point out through the release of patches.

Since there are numerous factors involved in game development, you have to calculate the total game development cost before you even commence development.

There are three main reasons for this:

• Understand the Feasibility of The Idea

There are chances that the budget you have at your disposal is insufficient for the game you have. You can understand this only if you calculate the cost of game development before you start production.

Suppose you have an idea for a multiplayer cross-platform shooter game. Such a game usually requires a massive budget. If you cannot afford to commence development, it is better to understand that before you write a single line of code or create a single asset, rather than sinking a lot of money and effort into it and finding it out later on.

• Identification of Key Domains

If the game is within your budget, then the next logical step is to understand where your budget will go towards. Through proper budgeting, you can understand the areas where a huge chunk of your investment will be going towards.

Thus, you will get a clearer picture of the overall development cost and find methods to iterate the strategy based on insights you get from the analysis.

• Proper Allocation of Budget

You must, at all costs, avoid going either over budget or under budget. Both are scenarios that can derail your game’s progress in development or, worse, even lead to the cancellation of the project altogether.

To avoid this scenario, you must allocate sufficient funds for all the different expenses within the development process – be it hiring new resources or outsourcing work to a different video game development company. Find avenues where you can cut down the cost and divert these savings towards endeavors where an increase in the budget can directly increase the overall quality of your final game product

Many would still be wondering how much it costs to develop a video game.

The cost of projects would depend on the specific features that need to be implemented and the complexity of the project. So even between two games that look similar from the outside, there might be a lot of variance in terms of the budget. For instance, one of them might have multi-player features which drive the up the cost even further.

But even so, there are rough estimates as to how much different game development projects would cost. Below we can give you a brief overview:

Action and Adventure Games Costs

Complexity and Scope:
Action and adventure games often involve intricate mechanics, dynamic environments, and rich storytelling. These elements can increase development costs due to the need for advanced programming, high-quality assets, and extensive testing.

Typical Costs:
Indie Action/Adventure Game: $100,000 – $500,000
AAA Action/Adventure Game: $10 million – $100 million+

Key Factors:
Detailed animations, complex AI behaviors, and extensive voice acting contribute to higher costs.

Role-Playing Games (RPGs) Costs

Complexity and Scope:
RPGs are known for their expansive worlds, deep narratives, and complex character systems. The development of RPGs often requires significant investment in world-building, dialogue, character models, and quest design.

Typical Costs:
Indie RPG: $500,000 – $2 million
AAA RPG: $30 million – $100 million+

Key Factors:
Cost is driven by the depth of storylines, the number of characters, and the variety of dialogue options.

First-Person Shooters (FPS) Costs

Complexity and Scope:
FPS games require sophisticated mechanics, detailed weapon models, and realistic environments. Multiplayer FPS games add additional complexity with server infrastructure and matchmaking systems.

Typical Costs:
Indie FPS: $200,000 – $1 million
AAA FPS: $20 million – $80 million+

Key Factors:
High costs are associated with detailed graphics, physics simulations, and online multiplayer capabilities.

Puzzle Games Costs

Complexity and Scope:
Puzzle games generally have simpler mechanics compared to other genres, which can lower development costs. However, unique and engaging puzzle design can still require significant investment.

Typical Costs:
Indie Puzzle Game: $50,000 – $300,000
AAA Puzzle Game: $1 million – $5 million

Key Factors:
Costs are mainly driven by the creative design of puzzles and user interface design.

Simulation Games Costs

Complexity and Scope:
Simulation games often involve replicating complex systems, such as managing a city or running a farm. The cost can vary widely depending on the depth and accuracy of the simulation.

Typical Costs:
Indie Simulation Game: $200,000 – $1 million
AAA Simulation Game: $5 million – $30 million+

Key Factors:
Costs are driven by the complexity of the systems being simulated and the need for detailed data and balancing.

Sports and Racing Games Costs

Complexity and Scope:
Sports and racing games require realistic physics, accurate representations of real-world sports or vehicles, and extensive motion capture. These elements contribute to higher development costs.

Typical Costs:
Indie Sports/Racing Game: $500,000 – $2 million
AAA Sports/Racing Game: $10 million – $50 million+

Key Factors:
High costs are related to realistic graphics, motion capture technology, and licensing of real-world teams or vehicles.

Casual and Mobile Games Costs

Complexity and Scope:
Casual and mobile games often have simpler mechanics and shorter development cycles, which can lower costs. However, competitive markets and monetization strategies may affect budgets.

Typical Costs:
Indie Casual/Mobile Game: $10,000 – $500,000
High-End Casual/Mobile Game: $500,000 – $2 million

Key Factors:
Costs are influenced by user experience design, monetization features, and marketing efforts.

Hyper-Casual Games

Hyper-casual games are a type of game that is characterized by their simplicity in terms of mechanics and in terms of design.

These games aim to target the widest set of audiences. These are monetized using different formats of ads and usually do not have much in the way of in-app purchases.

Some games in this genre include Helix Jump, Stack, Dune!, and Tomb of the Mask.

The budget for a hyper-casual game would fall between $5,000 to $50,000.

Casual Games

Casual games are a bit more complex in terms of the gameplay. These offer a bit more depth and are often meant to be played for longer periods of time compared to hyper-casual games.

Casual games can appeal to occasional gamers because of the simple mechanics and also to regular gamers because of the complexity. The monetization also often includes both ads and in-app purchases.

Famous casual games include Candy Crush Saga, Angry Birds, Plants vs. Zombies, and Fruit Ninja.

The price range of casual games would be between $10,000 to $500,000+.

Mid-Core Games

Mid-core games are a little more complex than casual games, often having meta elements such as leveling up and progression systems. These are tailored towards longer gameplay sessions than casual games.

It appeals to both regular gamers and hardcore gamers alike. The monetization is completed through ads, IAPs, and premium models.

A few mid-core games include Stardew Valley, Terraria, XCOM: Enemy Unknown, and Kingdom Rush.

The game development cost for a mid-core game would be between $100,000 and $1 million.

Hardcore Games

These are the types of games that appeal to people who consider gaming as a serious hobby. These have complex mechanics and meta elements such as progression systems.

Hardcore games are normally monetized using upfront payment models, where a player has to purchase the game for an upfront fee. Additional content such as DLCs can also be purchased using the same method.

Some of these games include Bloodborne, Dark Souls, Cuphead, Celeste, Doom, and Hades.

Because of their complexity hardcore game development cost would span between $1 million and $10 million.

AAA Games

AAA games are characterized by a single thing: production quality. If games are compared to movies, AAA games are the blockbusters among them.

These appeal to a wide range of audiences. AAA games also feature high-fidelity graphics, sprawling game worlds, and complex narratives.

A few AAA games include Cyberpunk 2077, Last of Us Part II, Horizon Zero Dawn, GTA V, and Elder Scrolls IV: Skyrim.

Hence, the development cost of games in the AAA category is on the highest side. These usually range from $10 million to $300 million.

The cost of developing a game is heavily influenced by its genre, with each genre presenting unique challenges and requirements. Understanding these cost implications can help developers and studios plan their budgets more effectively and make informed decisions about their projects. Whether you’re developing a high-budget AAA title or a cost-effective indie game, careful consideration of genre-specific needs will be crucial to managing development expenses.

Advancements in technology have a profound impact on the cost of game development. Technologies such as Virtual Reality (VR), Augmented Reality (AR), and advanced graphics engines can significantly elevate production values but also increase expenses.

VR and AR introduce immersive experiences that require specialized hardware and development tools, driving up costs for both software and testing. Advanced graphics engines, like Unreal Engine and Unity, offer cutting-edge visuals but demand higher investment in both technology and skilled personnel to utilize their full potential.

While these technologies can enhance gameplay and attract more players, they come with higher development costs due to the need for advanced expertise, additional hardware, and extended development time. Balancing these high-tech features with budget considerations is crucial for managing overall game development costs effectively.

The Impact of Team Size and Structure on Development Costs

The size and structure of a game development team play a crucial role in determining the overall cost of a project. A larger team may expedite development but often comes with higher costs due to increased salaries and coordination needs. Conversely, a smaller, more focused team can reduce expenses but might require more time to complete the project.

In-house teams, with their tight integration and control, typically offer streamlined communication but come with higher overheads. Outsourced teams can be cost-effective, providing specialized skills at lower rates, but may introduce challenges in coordination and quality control. Balancing team size and structure based on project scope and budget is essential for optimizing development costs and ensuring project success.

Economic Trends and Their Influence on Game Development Costs

Current economic trends, such as inflation and supply chain disruptions, are significantly impacting game development costs. Inflation drives up the prices of essential resources, including technology and labor, leading to higher overall development expenses. Supply chain issues can delay the acquisition of critical hardware and software, further increasing costs and extending project timelines. Additionally, fluctuating exchange rates can affect outsourcing costs, depending on the country of origin. As these economic factors continue to evolve, developers must adapt their budgeting strategies to manage these financial pressures effectively.

Understanding the cost of developing a video game can be complex and varies widely depending on numerous factors. To provide a clearer picture, we’ve analyzed several popular games to showcase their development costs and highlight the key elements that contribute to these expenses. Below, we present detailed case studies of various games, including those developed by Juego Studio and notable industry examples.

Case Study 1: “Adventure Quest” – A Fantasy Game by Juego Studio

Overview: “Adventure Quest” is a high-fantasy game developed by Juego Studio. The game features a richly detailed world, complex character interactions, and extensive lore.

Cost Breakdown:

Pre-Production: $100,000
Concept development and prototyping: $30,000
Market research and planning: $20,000
Initial design and storyboarding: $50,000

Production: $750,000
Art and Design: $300,000
Character and environment design: $150,000
Animation and special effects: $150,000

Programming: $250,000
Game engine customization: $100,000
Core gameplay mechanics: $150,000

Audio and Music: $100,000
Original soundtrack and sound effects: $100,000

QA and Testing: $100,000
Internal and external testing: $100,000

Post-Production: $150,000
Marketing and Promotion: $100,000
Advertising campaigns, trailers, and social media: $100,000

Launch and Distribution: $50,000
Distribution fees and platform certifications: $50,000

Total Estimated Cost: $1,000,000

Key Insights:

Art and Design accounted for the largest portion of the budget, reflecting the high visual fidelity and immersive world-building.
Production Costs were significantly influenced by the need for extensive programming and quality assurance.

Developing a video game can be an expensive endeavor, but with careful planning and strategic decisions, you can significantly reduce costs without sacrificing quality. Here are some practical tips and strategies to help you save on game development:

1. Utilize Pre-Made Assets

Pre-Made Asset Stores: Leverage asset stores like Unity Asset Store or Unreal Marketplace for high-quality pre-made assets. This includes 3D models, textures, animations, and sound effects. Using pre-made assets can save time and money compared to creating everything from scratch.

Customization: Choose assets that can be easily customized to fit your game’s style and needs. This ensures that you get the most value out of these assets while maintaining a unique appearance for your game.

2. Adopt Agile Development Methodologies

Incremental Development: Implement agile methodologies like Scrum or Kanban to develop your game in iterative cycles. This approach allows for regular testing and adjustments, reducing the risk of major issues and ensuring that resources are used efficiently.

Prioritize Features: Focus on delivering core features first. Develop a Minimum Viable Product (MVP) that includes only the essential elements of your game. This allows you to test and validate concepts before investing in additional features.

3. Outsource Wisely

Specialized Outsourcing: Consider outsourcing specific tasks such as art, animation, or sound design to specialized studios or freelancers. This can be more cost-effective than hiring full-time staff for these roles, especially if the tasks are not central to your core team’s expertise.

Evaluate Vendors: Research and select outsourcing partners with a proven track record and competitive pricing. Establish clear agreements and milestones to ensure quality and manage costs effectively.

4. Optimize Development Tools and Technologies

Open-Source Tools: Utilize open-source development tools and libraries. For example, engines like Godot or Blender are free and offer robust features that can reduce licensing costs.

Efficiency: Choose development tools that enhance productivity and streamline workflows. Tools that integrate well with your chosen game engine and support automation can save significant time and reduce development costs.

5. Focus on Efficient Project Management

Clear Specifications: Develop detailed project specifications and design documents. Clear documentation helps prevent scope creep and ensures that all team members are aligned with the project goals, reducing costly revisions.

Regular Reviews: Conduct regular project reviews to assess progress and address any issues promptly. This proactive approach helps prevent delays and additional costs associated with last-minute fixes.

6. Implement Quality Assurance Early

Early Testing: Incorporate quality assurance and testing early in the development process. Regular testing helps identify and resolve issues before they become more complex and costly to fix.

Automated Testing: Use automated testing tools where possible. Automated tests can quickly identify bugs and performance issues, reducing the need for extensive manual testing.

7. Leverage Community and Crowdsourcing

Community Feedback: Engage with your gaming community to gather feedback and suggestions. Early input from potential players can guide development and help you make cost-effective decisions.

Crowdsourcing: Consider crowdsourcing aspects like artwork, sound effects, or even game ideas. Platforms like Kickstarter or Indiegogo can also provide funding and support for your game development.

8. Minimize Overhead Costs

Remote Work: Take advantage of remote work opportunities to access a global talent pool and potentially lower labor costs. Remote teams can often work at a lower cost compared to on-site staff.

Lean Operations: Streamline your operations to reduce overhead costs. This includes minimizing office space, using efficient project management tools, and avoiding unnecessary expenses.