Financial Reality

It is hard to really understand the financial reality of game development until your paycheck and livelihood are tied to it. I certainly didn't think about it much at all prior to becoming a game dev. While making and playing PlanetSide 2, I saw countless posts from players talking about how the devs were making money grabs here, rolling in cash there, and otherwise protesting any and every attempt to generate more revenue for the game. Those same players often wanted to see different features made entirely. I wanted to explain some of the background to that, and why those things are so very often misunderstood, and so very important to any game you love. As a player you often have selfish priorities but don't really see the big picture - when the game makes more money, you will generally get a better game and more development on it. And when it doesn't...it doesn't.

Wikipedia has a great article on game development that covers some of the financial aspects. If you're interested in details, I recommend that. But here's the short of it. Making a AAA game is usually very expensive. And since you don't typically make money until you ship that game, you need most of that money up front. Tens to hundreds of millions of dollars, depending on how many developers are on the game and for how long. That means a business loan. When you do ship the game, the folks that loaned you that money don't just forget about it. They are investing in the game, and they not only want their money back, they also want to see a return on that investment. That means that a good chunk of the money the game makes goes to paying off a massive loan and investor returns; it doesn't go to devs so they can buy golden Lamborghinis. Then you have operating costs of the game - the salaries of the devs still working on it, the hardware, the customer service, the office space lease, the coffee in the break room, etc. And you have future costs for the game paid in-advance - how much will it cost to run it for the next several years? How many devs? What sort of support? After the loan and future costs are paid off is typically when you would start to see royalties, assuming the game makes that much money to cover operating and future development of the game. During all that time, the dev team is usually on salary or hourly, just like most of the jobs out there. In a perfect world, the game makes good money, investors are happy, it continues to get funding, and after a while the dev team starts to get some royalties for their efforts. But even in a perfect world that takes time to happen.

But what about an imperfect world? What if the game doesn't make enough money to pay off its loan or cover operating costs? Typically the response to any product not being in the black is obvious. 1) increase revenue. 2) reduce costs. Games are no different.

To increase revenue, new features will go in to try to bump it directly or indirectly (new things in cash shop, better player retention, etc). Those features are not free, and may not be anticipated. That means to make those features happen, other features get postponed or cut in favor of the revenue-increasing ones. This is usually in addition to cost cutting measures, as you don't really know if the revenue increasing features will work and they take time to build. So costs are often also reduced.

The biggest cost to reduce in a game are its people. Can't really cut game servers, and building space is not easy to adjust. People (devs, testers, customer service, etc) are easy to adjust, and they are a significant cost. This is especially true if you factor in multiple years of future development.  Remove one dev and you've shaved several hundred thousand off the amount of money you need to sustain the game in its lifetime. When one dev is removed, so too are all of the features, ideas, improvements, assets, and bug fixes that dev would have created or contributed to the game. Really important features would be offloaded to other devs, which means some of the features they would have worked on get cut instead. Because of this, typically lesser paying more volatile jobs are cut first - customer service, testers, and non-critical (or not-as-critical) staff. Then as that process continues more and more significant staff gets reduced, and with them more significant feature reductions deleted from the future of the game. Also out the door goes some types of projects, which may no longer have the manpower to effectively create. The scope is reduced. While sometimes devs simply move to another project in the company, sometimes they are simply laid off. The loss of personnel has another effect - morale goes right down the shitter. Watching talented friends and colleagues who helped you build a game pack up their stuff and likely forever leave the project is soul crushing. It's much worse for them (obviously), but I want to focus on the effect it has on the game. All those things are very bad for the game.

Most players will never know all of the cool stuff that might have been. Few are observant enough to put the clues together. From the player angle, you don't see the cost reductions; they see the new features that don't necessarily make sense to them, and features they are excited about get postponed, sometimes indefinitely. Why are they doing all this player retention work? Why are they putting out more things to sell? We want X Y and Z!! The shallow thinker looks at this and incorrectly thinks money grabbing greedy bastards ignoring what the players want to add more lining their already gold-lined pockets. But what's really happening is the financial reality of the game is taking its toll - reduced feature set, re-prioritization of that set, and scope reduction for those features. Those devs aren't trying to nickel and dime those players; they are fighting to save the game those players love and their jobs.

The big takeaway for the average player should be to try to read between the lines, and give your dev team a little benefit of the doubt. If you see monetization features going into your favorite game instead of things you might have expected, don't think those devs are being greedy. They may have thought of a way to make the game more successful, bring in more revenue, and increase feature development. Or they could be in trouble. In either situation, it's in your best interest as a fan of the game to be helpful. Give feedback that would help those systems and features be successful. If they aren't successful, then the result is likely fewer features in the future. And if there are troubles that process will repeat until the numbers balance out or the game collapses. Neither of those outcomes is good for those who love the game. You should want the game to be successful, and help it be successful if you are able. Support it; encourage others to support it. Give feedback and ideas on how it could be more successful. Do you not like the monetization features? They are there for good reason. Instead of trashing them, try to offer ways they could make it be more acceptable. And most importantly - give the devs a break. They're normal people working under stressful conditions on volatile projects that have very little in the way of job security. However much you want the game to be successful, they have a much bigger investment in that outcome.