07 The cost of developing a game

Submitted by ehanuise on Wed, 24/02/2016 - 17:09

Many gamers estimate the value of a game only by the box size and components.

When you buy a new boardgame, these are the most tangible assets you are buying, so it is easy to consider these as the only value of the game: Box, rules, boards, flats, components.

This does however overlook a very important part of the value of a boardgame, and of its cost as value and cost are closely related. Cost is what must be expended for the game to exist, value or perceived value will dictate the price the game will fetch on the retailer shelves. Of course you cannot price below cost, or you will very soon run out of business. And you cannot price over value, or no-one will buy your game.

Publishing a board game is not just a matter of ordering a couple illustrations, running production quotes and placing an order by a factory. There is a huge amount of work that must happen before art is commissionned and production is ordered. And that work has a cost, a large cost, which is not apparent if you only consider the components.

So, what is the actual cost of publishing a board game ?

There are three main phases to the publication of a game :

  • Development
  • Pre-production
  • production

Each phase has costs in time and money.

I will first digress a bit, about the cost of time. Do not fool yourself thinking time spend working on your projects does not matter. Your time has a cost, and you must take it into account, if only to understand the total value of the work you do on a game before it is published. If you do not value your time, you have a skewed view of the actual costs of producing the game. This is a business and to be profitable you must recover your costs, and make a benefit. Time must therefore be accounted for as a cost.

Let's posit you value your time based on a fixed wage, as it makes comparisons with other trades easier.

Let's say a basic salary is €1500, this being the amount you have to pay your bills, food, etc. To get this amount of money, your gross salary must be about €3000 (it will vary between €2000 and €4500 depending on the country you live in, tax rates, etc. I'll just use €3000 for the sake of simplicity. Adjust according to your specifics).
One month of work is 20 days on average (taking holidays and weekends into account, to keep something comparable to other jobs). This means one day of your work is worth 150€. Divide per 8 and that's 18.75€ per hour. Now compare that to a handyman, store clerk, or fast food manager, and you'll see that this is a very low ball scenario.

Now that we can value our time, let's make a rough estimation of the amount of time that goes into publishing a board game, between the moment there is an agreement with the designer to publish his game and the moment the games leave the factory.

Here is a breakdown of all the steps, and an estimation of the number of days each step uses. Usually many steps are split over several days, especially for steps that require collaboration with third parties: you send emails, get replies later, make changes, email, and so forth. It all adds up, and the number of days here is a summary of the total time used.
All used time has to be taken into account, as it is time that you can not use for other money-making or personal activities. This is work time.

I have made a shared Gdocs sheet of this, so you can download it and tweak the numbers as you want.
This is my estimation, and it is by no means absolute, definitive or 100% complete. I am sure there are errors and omissions. This is what seems to work for me.
Link to Gdocs : https://docs.google.com/spreadsheets/d/1ahKtQf8ZEtGakKqjGk8MJjcxdwfFtJp54Glp5locTgw

Days Step
2 Contract - negotiation and redaction
1 Original version playtesting
150 Development, playtesting and prototypes*
2 Post-development rules redaction, proofreading
155 Development total
2 Final components specifications determination
(size, materials, box size, etc.)
1 Quote request document redaction
2 Graphical brief redaction
4 Quote requests: contacting manufacturers and follow-up
2 Contact illustrators, ask for quotes, follow-up
1 Print run financing analysis
Production, illustrations, promotion, distribution
5 Art: ordering and follow-up
1 Pro product sheet for distributor and partners
7 Distributors and partners solicitation, and follow-up, contracts
2 Logistics costs projection, quote requests, follow-up
5 Final rules redaction and page-setting, proofreading
5 Final components (flats, boards, …) redaction and page-setting, proofreading
5 Final box redaction and page-setting, proofreading
3 Translations
5 Translated versions page-setting
2 Translations proofreading - follow-up with partners
5 preproduction copies for partners, press, demos, etc.
3 Shipping and follow-up of pre-prod copies
5 Communication and marketing materials
(images, flyers, sell sheets, ads, posters, slogans, press releases, etc.)
3 marketing plan coordination with partners and distributors
68 Preproduction total
0.5 Financing analysis update
0.5 Manufacturer final choice
7 Manufacturer order and production follow up
(proofs and blanks approval, issue solving)
8 Production followup total
231 Total
   
1,500.00 € Net monthly salary
3,000.00 € Brutto cost
150.00 € Daily (/20)
18.75 € Hourly (daily /8 )
23,250.00 € Development cost
10,200.00 € Preproduction cost
1,200.00 € Production followup cost
34,650.00 € Total cost
  Plus after that art costs, tooling and molds, manufacturing, logistics, taxtes and royalties.

* Development time varies according to the state the game is in when it is signed for publishing, and the editorial strategy of the publisher. Some publishers search finished games that will require little to no development. Others such as Flatlined Games believe it is better to invest a lot of time in development to bring editorial value to the finished product.

As you can see, this is no small amount! Sure you can set a lower salary as basis and squeeze some steps to a lower number of days, but the whole estimation has no point if you are not realistic with the time actually required, and the actual cost it has.

This 'time' cost comes in addition of art commissioning, production tooling (die cut patterns, molds, ...), actual production costs, logistics, taxes, royalties, and whatnot.

The total of all that must be taken into account to determine the actual cost of your games. If you only look at the factory quote and bill, you are only seeing part of your actual cost.

So when you next hear someone saying 'oh this is just a box, rules and deck of cards, it must cost nearly nothing to publish', you will know that in fact there is much more than just the components to the overall cost. Actually card games are expensive to make because they usually need lots of illustrations.

A note about crowdfunding and hidden costs :

I sometimes read that publishers that use crowdfunding 'take no risk at all', as the funding comes directly from the customers.
This is absolutely false, although it is an easy error to make because the costs of developing and pre-producing a game are mostly invisible to gamers.

Before a game can even be placed on Kickstarter, most of the work has to be done ahead of the campaign. All the money and time (which has an important cost as well) must be fronted by the publisher, as well as the promotion costs of running such a campaign. Should the campaign not be successfull (the failure ratio is about 40%) all these expenses will be at a loss for the publisher.
The risk for the backers is much lower: if the campaign doesn't fund, they are not charged and this has no incidence to them.

So Kickstarter isn't just 'easy money', funding games on crowdfunding platforms is a real risk for a publisher.