When any company makes any type of game, whether it is big or small, it is vital for that company to have a budget that they stick to and follow throughout the production of the game. Things called budget systems are used by big companies, for example Activision, to try and establish the type of profits they need to be making in order for the money they spend on making the game to be justified, for example when they released Spider-Man 3, it cost then over $35 million to create, not including marketing. This put a high amount of pressure on the game selling extremely well for them to make profit, or even just break even. The budget system takes into consideration things like how well their other games sold and how much money is sensible to pay on making a new installment of the series.
The reason for making budgets is ultimately to end up paying less money for the creation of the product than you end up earning for the sale of that product. The budget also will maybe have to include, for a big company like Activision, the salaries and wages of the people that will actually be creating the game for you, this is important to factor in to the budget you make, as you will need to pay your employees if you want to create a good game. Breaking even refers to a games company making as money on a game they have made as they spent to make it. Whilst breaking even isn't a bad thing, ideally any company or person wants to make profit. For this reason, it is very important to budget correctly to make sure you make profit and don't just break even, or even lose money on your product.
In the games industry, there are different industry trends that companies use in order to help with their sales. Franchised Intellectual property is used lots in smaller companies to really help and boost the sales of the game they are making. An example of this is a company called Climax Studios. This small games company have recently released a game under the hugely popular Assassins Creed franchise name. The Assassins Creed IP is owned by Ubisoft, but in the case of Climax Studios, Ubisoft have allowed them to develop and release a game within the Assassins creed franchise.
Original IP is the opposite of what talked about above, because this refers to a company that came up with a completely new idea, such as when EA came up with and released the first assassins creed. From that point, they could have kept the assassins creed franchise completely to themselves, therefore being called original IP. Instead, they chose to share it with other companies for them to also make assassins creed games.
A discount sale can be very useful for especially smaller companies as it can help to gain interest in their game and their company. By even reducing the price of your game by £1 or £2 it can help to sell large quantities of your games as people may be more inclined to buy your game if they see it is on sale or cheap.
The video games industry has been growing in recent years, and this is shown by the huge amount of money that was spent in 2014 alone, which was over 22 billion us dollars. This figure is up from 2013's 21 billion dollars. Whilst the growth isn't huge, its a healthy 1 billion dollars above the previous year. In comparison with the film and theater industry, this industry made just over 36 billion us dollars, which whilst is lots more than the video game industry, i believe that in the foreseeable future, the video games industries profits will continue to rise.
One of the biggest annual releasing games is Call Of Duty, there is a different call of duty released every year, and since 2003, the first release of Call of Duty, the franchise has revenue over 10 billion dollars. In the FPS game market, it will be extremely hard to compete with the huge title that is Call of Duty, your game will either have to be amazing or different in order to be successful.
Market trends are extremely useful to big game companies in the sense that, in order to gauge whether or not a game is going to be successful or not. A huge example of how market trends have helped products sell is with VR. When the oculus rift was announced, it was expensive and buggy, with not many games for it. As other companies saw how successful and interested people where, they started to develop a cheaper alternative that they knew would sale, thanks to the interest shown in oculus. Another market trend that has been up and coming massively recently has been mobile MMO strategy games such as Game of War and Clash of Clans has resulted in many similar games to be developed. These games are popular due to how easy they are to pick up and start playing quickly, and make a huge amount of money for the industry. Game of War made over $900 million last year from in app purchases, and similar games that follow the same sort of structure almost matched this figure.
The reason for making budgets is ultimately to end up paying less money for the creation of the product than you end up earning for the sale of that product. The budget also will maybe have to include, for a big company like Activision, the salaries and wages of the people that will actually be creating the game for you, this is important to factor in to the budget you make, as you will need to pay your employees if you want to create a good game. Breaking even refers to a games company making as money on a game they have made as they spent to make it. Whilst breaking even isn't a bad thing, ideally any company or person wants to make profit. For this reason, it is very important to budget correctly to make sure you make profit and don't just break even, or even lose money on your product.
In the games industry, there are different industry trends that companies use in order to help with their sales. Franchised Intellectual property is used lots in smaller companies to really help and boost the sales of the game they are making. An example of this is a company called Climax Studios. This small games company have recently released a game under the hugely popular Assassins Creed franchise name. The Assassins Creed IP is owned by Ubisoft, but in the case of Climax Studios, Ubisoft have allowed them to develop and release a game within the Assassins creed franchise.
Original IP is the opposite of what talked about above, because this refers to a company that came up with a completely new idea, such as when EA came up with and released the first assassins creed. From that point, they could have kept the assassins creed franchise completely to themselves, therefore being called original IP. Instead, they chose to share it with other companies for them to also make assassins creed games.
A discount sale can be very useful for especially smaller companies as it can help to gain interest in their game and their company. By even reducing the price of your game by £1 or £2 it can help to sell large quantities of your games as people may be more inclined to buy your game if they see it is on sale or cheap.
The video games industry has been growing in recent years, and this is shown by the huge amount of money that was spent in 2014 alone, which was over 22 billion us dollars. This figure is up from 2013's 21 billion dollars. Whilst the growth isn't huge, its a healthy 1 billion dollars above the previous year. In comparison with the film and theater industry, this industry made just over 36 billion us dollars, which whilst is lots more than the video game industry, i believe that in the foreseeable future, the video games industries profits will continue to rise.
One of the biggest annual releasing games is Call Of Duty, there is a different call of duty released every year, and since 2003, the first release of Call of Duty, the franchise has revenue over 10 billion dollars. In the FPS game market, it will be extremely hard to compete with the huge title that is Call of Duty, your game will either have to be amazing or different in order to be successful.
Market trends are extremely useful to big game companies in the sense that, in order to gauge whether or not a game is going to be successful or not. A huge example of how market trends have helped products sell is with VR. When the oculus rift was announced, it was expensive and buggy, with not many games for it. As other companies saw how successful and interested people where, they started to develop a cheaper alternative that they knew would sale, thanks to the interest shown in oculus. Another market trend that has been up and coming massively recently has been mobile MMO strategy games such as Game of War and Clash of Clans has resulted in many similar games to be developed. These games are popular due to how easy they are to pick up and start playing quickly, and make a huge amount of money for the industry. Game of War made over $900 million last year from in app purchases, and similar games that follow the same sort of structure almost matched this figure.