Cost of Entry

Everyone sees the dollar signs associated with online games , but few people truly understand the costs.

Classic games are cheap and easy for anyone to do. It is hard to provide any kind of meaningful differentiation from the hundreds of competing products on sites around the world. Development costs range from a few thousand to $60,000, trending toward the low end. However, unless you own a gaming portal or plan to repurpose a game as a retail solo-play home unit, it doesn't make a lot of financial sense to get into this arena.

Hybrids are fairly easy to get into as well; such a project adds only one or two people to the development team, and the code and processes for adding Internet connectivity to a game should be well-known. Because publishers and developers normally don't support hybrid gameplay with a host site, but merely fix bugs , optimize network code over time, and sometimes add new multiplayer maps and play styles, hybrids are very cost effective as a means of entry into the field. These are "fire and almost forget" projects; post-launch costs are minimal. There is some change developing in this area as publishers begin to offer minimal "play areas" for their games on their sites, but these are not yet "the" places to play.

In general, persistent worlds (PWs) are hideously expensive, but even a medium hit can bring in millions of dollars per year for 5 “10 years . The absolute minimum development cost we've heard is around $2.5 “$3 million, but that was for a project that reused client and server code from a previous PW and didn't add any new bells and whistles. In other words, this will produce a product that doesn't have the production values of a top-of-the-line hybrid, which most large publishers would find unacceptable, given the added financial outlay required to launch and support a PW.

The average PW development cost today runs well over $7 million, and $10 “$12 million projects are more typical than unusual. The launch costs of a PW are decidedly non-trivial, too, and are currently at between $3 and $5 million and rising . This figure includes all the hardware and bandwidth to host the players, plus the customer service (CS), player relations, technical support and billing, and account management staff needed at launch to support the game.