Tbf, a lot of major AAA companies nowadays can probably afford to have a $500m loss. The thing that gets me, however, is that it wouldn’t even be a $500m loss. Just because you don’t make money doesn’t mean it’s a total loss, it just means you didn’t cover your costs.
At what point is the loss worth the knowledge of what did or didn’t work?
At what point is the loss worth having made the thing, because you were doing something no one else had done on a massive budget, even though you didn’t cover your original costs?
Is $50m a reasonable loss?
$100m?
That’s where things get complicated and if all you do is look at spreadsheets then you’re going to miss the fact that your attempt was still worth something, even if it didn’t actually make money.
These companies tend to have cash cows to offset the losses too. Keep developing and supporting your CoDs, Candy Crushes, and League of Legends so you can drop $500m on a high-risk, high-reward release. C’mon, do something interesting… Are you really unable to make up for a potential +$100m loss when you have Candy Crush making billions for you?
I think, a big part of the problem is that much of the cost is sunken into things that don’t really teach you too much. The basic game concept prototype can probably be developed for less than $10m. You do still learn some things by making really nice graphics. But then making those nice graphics as well as sounds, voice recordings and world design for your massive open world, that’s when you’re just doing more of the same at quite the scale.
Tbf, a lot of major AAA companies nowadays can probably afford to have a $500m loss. The thing that gets me, however, is that it wouldn’t even be a $500m loss. Just because you don’t make money doesn’t mean it’s a total loss, it just means you didn’t cover your costs.
At what point is the loss worth the knowledge of what did or didn’t work?
At what point is the loss worth having made the thing, because you were doing something no one else had done on a massive budget, even though you didn’t cover your original costs?
Is $50m a reasonable loss?
$100m?
That’s where things get complicated and if all you do is look at spreadsheets then you’re going to miss the fact that your attempt was still worth something, even if it didn’t actually make money.
These companies tend to have cash cows to offset the losses too. Keep developing and supporting your CoDs, Candy Crushes, and League of Legends so you can drop $500m on a high-risk, high-reward release. C’mon, do something interesting… Are you really unable to make up for a potential +$100m loss when you have Candy Crush making billions for you?
I think, a big part of the problem is that much of the cost is sunken into things that don’t really teach you too much. The basic game concept prototype can probably be developed for less than $10m. You do still learn some things by making really nice graphics. But then making those nice graphics as well as sounds, voice recordings and world design for your massive open world, that’s when you’re just doing more of the same at quite the scale.