Gears of War 4 would have cost over $100M to make — and could have killed Epic Games

[DrunknMunky Veteran]

Quote

 

Gears of War 4 would have cost over $100M to make — and could have killed Epic Games

Ballooning budgets led to change of business model

By Allegra Frank on May 02, 2016 at 11:26a @LegsFrank

 

Gears of War 4 would have cost more than $100 million to make, Epic Games estimated. Anything but a major success would have put the company out of business, co-founder Tim Sweeney told Polygon. The sky-rocketing development costs led the company to sit on the game, ultimately selling off the Gears of War property to publisher Microsoft.

 

"The very first Gears of War game cost $12 million to develop, and it made about $100 million in revenue," he said. "It was very profitable."

 

Yet that profit was later mitigated by increasing development costs. 2011's Gears of War 3 cost "about four or five times more" to make than Gears of War did in 2006. According to Sweeney, the way Epic Games was going, the fourth game would have boasted a more than $100 million budget.

 

Making a profit off the project would have required the game to be a major success. "Anything less could put us out of business," Sweeney said.

 

Continues...

 

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Explains the state of GoW4 by The Coalition, IMO.

[Jack W]

All this shows me is that Epic Games is not able to properly budget for a franchise, and lacks the ability to reduce costs in non-essential areas. If the cost is rising that much each time, something is very clearly wrong.

[LaP]

9 hours ago, Jack W said:

All this shows me is that Epic Games is not able to properly budget for a franchise, and lacks the ability to reduce costs in non-essential areas. If the cost is rising that much each time, something is very clearly wrong.

Specially since after the first game you have a working engine, expertise and assets that are available to reduce the cost.

 

The first game of a new series starting a new generation should be the most expensive one to make logically.

[DrunknMunky Veteran]

12 hours ago, Jack W said:

All this shows me is that Epic Games is not able to properly budget for a franchise, and lacks the ability to reduce costs in non-essential areas. If the cost is rising that much each time, something is very clearly wrong.

 

3 hours ago, LaP said:

Specially since after the first game you have a working engine, expertise and assets that are available to reduce the cost.

 

The first game of a new series starting a new generation should be the most expensive one to make logically.

That is not what happened to game development last gen / this gen and why "AA" and why so many studios have closed. Halo 4 was not cheaper than Halo 3. I guess MS were clearly bad at financials across the board huh...

[Jack W]

Just now, Andrew said:

 

That is not what happened to game development last gen / this gen and why "AA" and why so many studios have closed. Halo 4 was not cheaper than Halo 3. I guess MS were clearly bad at financials across the board huh...

I'm not aware of the specific numbers Halo 3 vs Halo 4, but I can't see the difference being as large as the difference with Gears of War's.

[DrunknMunky Veteran]

Just now, Jack W said:

I'm not aware of the specific numbers Halo 3 vs Halo 4, but I can't see the difference being as large as the difference with Gears of War's.

Halo 3 was 60 million and Spencer has been quoted "nothing's even close" to the amount Halo 4 cost. If he's including third party publishers, then he was either over exaggerating, or they spent more than $250 million.

[NeoWind]

They want to generate publicity by inflating the number as high as it can for creating more sales and even do the game might not be that good.

[Jack W]

2 minutes ago, Andrew said:

Halo 3 was 60 million and Spencer has been quoted "nothing's even close" to the amount Halo 4 cost. If he's including third party publishers, then he was either over exaggerating, or they spent more than $250 million.

Without a straight figure, I'd say it's all heresay. Either way, if costs are rising that much, between one episode, then something isn't going quite right, it's a staggeringly huge difference.

[DrunknMunky Veteran]

Just now, Jack W said:

Without a straight figure, I'd say it's all heresay. Either way, if costs are rising that much, between one episode, then something isn't going quite right, it's a staggeringly huge difference.

Stakes are high, and like I say, AA games have all but been made extinct. There is no room for failure with that kind of money on the line, which mirrors exactly what Epic said to Polygon.

[LaP]

1 hour ago, Andrew said:

 

That is not what happened to game development last gen / this gen and why "AA" and why so many studios have closed. Halo 4 was not cheaper than Halo 3. I guess MS were clearly bad at financials across the board huh...

Halo 4 and 3 were made by 2 different developers though. Don't know how much did they share talents, tech and assets but there was surely some redundancy and lost of money when they moved from Bungie to 343.

 

All the 3 first gears of war were made by the same company and designer. Producer and lead programmer were different for the 3rd one. I did not play the 3rd one but the 2nd one was very similar to the first one.

[DrunknMunky Veteran]

5 minutes ago, LaP said:

Halo 4 and 3 were made by 2 different developers though. Don't know how much did they share talents, tech and assets but there was surely some redundancy and lost of money when they moved from Bungie to 343.

 

All the 3 first gears of war were made by the same company and designer. Producer and lead programmer were different for the 3rd one. I did not play the 3rd one but the 2nd one was very similar to the first one.

Yup, no doubt a huge chunk of money Spencer even refers to covers the cost of assembling 343. A lot of them came from Pandemic when they closed, and some Bungie staff decided to stay with Halo.

 

I'm not sure about loses though. Bungie handed over a lot of servers and data when they left, and they even recycled Bungie's building. Essentially both companies had been working on Halo together for 2 years, before Bungie left in 2010 for Destiny / Activision.

[George P Global Moderator]

It sounds to me that EPIC just wasn't running things right, most of the work going on right now in GoW4 is do to the changes between Unreal Engine 3 and 4 and the fact the coalition has to rewrite code over from scratch, that adds to costs, but EPIC didn't have to do that for Gears 1-3, they're all UE3 based, after the first game you're just making new level designs and tweaking the engine, costs shouldn't rise unless there's problems here.

 

At the end of the day, it depends on scale, the game, and your goal.   Even if the game cost $100m to make, all it would have to do is sell 2million copies at the full retail price and you've made a profit,  there's really no way this game doesn't hit that mark or go over it.

 

EPIC isn't what it used to be, top people have left, they've been forced to basically give UE4 away for free, losing a chunk of money they would otherwise have coming in from licensing.   And to add things the changes from one engine to the next, oh well, they're loss of a hit IP in the end.

[DrunknMunky Veteran]

50 minutes ago, George P said:

It sounds to me that EPIC just wasn't running things right, most of the work going on right now in GoW4 is do to the changes between Unreal Engine 3 and 4 and the fact the coalition has to rewrite code over from scratch, that adds to costs, but EPIC didn't have to do that for Gears 1-3, they're all UE3 based, after the first game you're just making new level designs and tweaking the engine, costs shouldn't rise unless there's problems here.

 

At the end of the day, it depends on scale, the game, and your goal.   Even if the game cost $100m to make, all it would have to do is sell 2million copies at the full retail price and you've made a profit,  there's really no way this game doesn't hit that mark or go over it.

 

EPIC isn't what it used to be, top people have left, they've been forced to basically give UE4 away for free, losing a chunk of money they would otherwise have coming in from licensing.   And to add things the changes from one engine to the next, oh well, they're loss of a hit IP in the end.

UE4 isn't free? It is free to download, but once you develop and sell a game which earns x amount, you pay royalties.

 

Further, top people left because as far as Epic were concerned, MS wasn't interested in their ideas. Epic sold the IP to them, and it won't have come cheap. I'd say MS have lost out, especially considering the B team effort we've landed with in GoW4. All the while, they'll earn money back from GoW4 from UE4's use anyway. Win-win.

[George P Global Moderator]

1 hour ago, Andrew said:

UE4 isn't free? It is free to download, but once you develop and sell a game which earns x amount, you pay royalties.

 

Further, top people left because as far as Epic were concerned, MS wasn't interested in their ideas. Epic sold the IP to them, and it won't have come cheap. I'd say MS have lost out, especially considering the B team effort we've landed with in GoW4. All the while, they'll earn money back from GoW4 from UE4's use anyway. Win-win.

It's free to get and use, UE3 you had to pay to even get and to even begin using you paid for a license on per developer using it.   By contrast the newer UE4 royalty model is like night and day.   And top people leaving epic because MS wasn't interested?  Because MS is the only publisher EPIC could sell their other game ideas to, is that it?   Top people leaving epic is because of epic not because of MS.     MS losing out is silly, while they might, and it's a stretch, not make all their money back from GoW4, they've got more games planned, it's the start of a new trilogy from the sounds of it.   The past 3 games have sold 5million copies or more, from what I remember,  MS will make their money in the end, and the IP helps sell more consoles which also adds to them making more money in the end.

 

You're whole b team comment, that's you, I've seen quite a number of review for the beta that are positive, so like everything else it comes down to what most people think, I have no doubt it'll sell and it'll do well in the end.

[DrunknMunky Veteran]

1 hour ago, George P said:

It's free to get and use, UE3 you had to pay to even get and to even begin using you paid for a license on per developer using it.   By contrast the newer UE4 royalty model is like night and day.   And top people leaving epic because MS wasn't interested?  Because MS is the only publisher EPIC could sell their other game ideas to, is that it?   Top people leaving epic is because of epic not because of MS.     MS losing out is silly, while they might, and it's a stretch, not make all their money back from GoW4, they've got more games planned, it's the start of a new trilogy from the sounds of it.   The past 3 games have sold 5million copies or more, from what I remember,  MS will make their money in the end, and the IP helps sell more consoles which also adds to them making more money in the end.

 

You're whole b team comment, that's you, I've seen quite a number of review for the beta that are positive, so like everything else it comes down to what most people think, I have no doubt it'll sell and it'll do well in the end.

UE4 being free to download for educational purposes or hobby devs and actually using it for a big AAA game are night and day, morelike. The threshold is very low before you start paying back. So it's no way close to being "free" nor does it insinuate they are struggling compared to the competition. If anything, they are sitting tidy on a nestegg while others take risks.

 

Not everyone who left Epic did so because Gears was shelved or MS refusing to greenlight the next game. However, Rod has gone on record to say that he wanted to continue making Gears, and their decision not to do 4 back in 2012/13 was the reason he left. Lest we forget he left MS to work on Gears to start with, which speaks volumes how bad he wants to work on it. When given the opportunity to work on it again, he did it in a heartbeat.

 

MS will definitely not make their money back on GoW 4 alone, that is a safe bet. Epic wanted 100 million to make the next game, you can safely assume they asked for more to buy the IP outright. You haven't even started paying for the development yet and it's already costing MS more than having Epic create it back when they pitched it first. If Halo has done little to sell X1, I seriously doubt GoW will. It was a good trilogy, but it never helped to sell a lot of 360s and that was when many argue MS were winning the console war. Future games are only considered if 4 sells. I don't doubt Epic and their cost vs sales estimates otherwise they'd never have walked away from the series.

 

I don't need reviews to tell me what to think of the beta. I've played it, and I've played a hell of a lot of Gears MP in the past. My wingman @.Rob even more so. The beta just doesn't live up to GoW3's quality (not that it was perfect either mind). Whether or not it sells a lot is not my interest, just that they did good by the series, which I don't think they have.

[George P Global Moderator]

3 hours ago, Andrew said:

UE4 being free to download for educational purposes or hobby devs and actually using it for a big AAA game are night and day, morelike. The threshold is very low before you start paying back. So it's no way close to being "free" nor does it insinuate they are struggling compared to the competition. If anything, they are sitting tidy on a nestegg while others take risks.

 

Not everyone who left Epic did so because Gears was shelved or MS refusing to greenlight the next game. However, Rod has gone on record to say that he wanted to continue making Gears, and their decision not to do 4 back in 2012/13 was the reason he left. Lest we forget he left MS to work on Gears to start with, which speaks volumes how bad he wants to work on it. When given the opportunity to work on it again, he did it in a heartbeat.

 

MS will definitely not make their money back on GoW 4 alone, that is a safe bet. Epic wanted 100 million to make the next game, you can safely assume they asked for more to buy the IP outright. You haven't even started paying for the development yet and it's already costing MS more than having Epic create it back when they pitched it first. If Halo has done little to sell X1, I seriously doubt GoW will. It was a good trilogy, but it never helped to sell a lot of 360s and that was when many argue MS were winning the console war. Future games are only considered if 4 sells. I don't doubt Epic and their cost vs sales estimates otherwise they'd never have walked away from the series.

 

I don't need reviews to tell me what to think of the beta. I've played it, and I've played a hell of a lot of Gears MP in the past. My wingman @.Rob even more so. The beta just doesn't live up to GoW3's quality (not that it was perfect either mind). Whether or not it sells a lot is not my interest, just that they did good by the series, which I don't think they have.

So now we're going from top people left because of MS, to Rod left because of Gears 4 not being made back when, which was more EPICs own fault/choice and nothing to do with MS at the time.    You're more or less agreeing with me, people left because of what was going on with EPIC itself, not directly related to MS, Rod is the exception not the rule in this case.

 

Without knowing the cost it took to buy it, or the cost to setup the new team, you can't say it's a safe bet at all, not when the last 3 managed to sell so well, there's no reason to expect the 4th won't either.  It's not like putting the team together costs $100million by itself.   And in the end, the game being a 1st party title instead of 3rd party means MS keeps more of the money than what EPIC got per sale.   I also have a feeling you'll see it hit the PC, they seem to be doing that more and more now with Halo probably being the only exception.      As long as it didn't cost something like $250-$300million, which would be insane for any game of this type, it's got a good chance of making money.   

[DrunknMunky Veteran]

13 hours ago, George P said:

So now we're going from top people left because of MS, to Rod left because of Gears 4 not being made back when, which was more EPICs own fault/choice and nothing to do with MS at the time.    You're more or less agreeing with me, people left because of what was going on with EPIC itself, not directly related to MS, Rod is the exception not the rule in this case.

 

Without knowing the cost it took to buy it, or the cost to setup the new team, you can't say it's a safe bet at all, not when the last 3 managed to sell so well, there's no reason to expect the 4th won't either.  It's not like putting the team together costs $100million by itself.   And in the end, the game being a 1st party title instead of 3rd party means MS keeps more of the money than what EPIC got per sale.   I also have a feeling you'll see it hit the PC, they seem to be doing that more and more now with Halo probably being the only exception.      As long as it didn't cost something like $250-$300million, which would be insane for any game of this type, it's got a good chance of making money.   

If we're talking solely about "top people", then it's Bleszinski, Capps and Fergusson. However, others left Epic and joined The Coalition to continue working on Gears, like Greg Mitchell. We're not going to agree on this so might as well move on.

 

And it is a safe bet, because you know how much the next game costs and that MS wants to continue the series. You'd never give it away for anything less than your asking price. They had them bent over a barrel essentially to get what they want. Either you pay, or the IP dies. Even Pachter gave the same figure 2 years ago, long before Epic announced it. inb4Pachterisn'treliableexcuse.

[BinaryData]

It's a shame these games are costing so much. It really takes away the joy of gamers.

[HawkMan]

On 03/05/2016 at 9:13 AM, Jack W said:

All this shows me is that Epic Games is not able to properly budget for a franchise, and lacks the ability to reduce costs in non-essential areas. If the cost is rising that much each time, something is very clearly wrong.

The thing is GoW1 was cheap because it was early gen and had low poly models and textures.

 

the majority of costs today is from the art assets, high res models of movie quality, likewise texture and animation work. 

[+Audioboxer Subscriber²]

No idea why the budget for this would have to balloon so high. Not as if they create a 20 hour long SP campaign. Not sure if I can dig up UC/TLoU costs (biggest TPS game to compare), but I'd be surprised if they were over $100 million. Even if so they obviously make profit. UC4 is easily the best looking game on consoles so far.

[DrunknMunky Veteran]

44 minutes ago, HawkMan said:

The thing is GoW1 was cheap because it was early gen and had low poly models and textures.

 

the majority of costs today is from the art assets, high res models of movie quality, likewise texture and animation work. 

GoW1 wasn't exactly "cheap". It was par for the time period it released. It cost even more if you include Epic's insistance to include 512 MB RAM in the 360

[HawkMan]

7 minutes ago, Andrew said:

GoW1 wasn't exactly "cheap". It was par for the time period it released. It cost even more if you include Epic's insistance to include 512 MB RAM in the 360

Well it was cheap compared to todays games. for triple A cinematic games with loads of characters. 

[DrunknMunky Veteran]

Just now, HawkMan said:

Well it was cheap compared to todays games. for triple A cinematic games with loads of characters. 

That goes without saying