The biggest hurdle to all of this is money. Look at it this way. Regardless of what game you make, you have to pay the bills. If you pay everyone an average of $40K a year you will be paying out $4M a year/100 employees. Figure $5M when you add in bonuses, benefits, and payroll taxes. (Rough figures folks, but we're going ballpark here).
Now lets look at how much income we'll have. If you charge $50 a box you get $5M per 100K purchases. The 100K mark used to be a big benchmark before 2004 and WoW by the way. Now you think you just made $5M off of box sales but you actually don't. There's a lot of middlemen there, so 40% is much more realistic. In reality you just made $2M for selling 100K games. So box sales won't pay the bills. All they do is get you subscribers.
You have three options when you price the game to the players. Free to play with microtransactions, traditional subscribers, or some combination thereof. If you charge $15 a month then you pull in $1.5M a month or $18M a year. (Don't forget you lose $15 for the first month per sub.)
How much does it take to make the game? The more cutting edge you go with graphics the higher your costs. So if you want a graphics driven game you have to really work the technical elements and go for higher tech customers. The higher the tech required to play the game the smaller the pool of potential subs. See what happened to EQ2 for an example of how that worked. Basically the better the graphics are, the more subs you need, but you run into diminishing returns because you will have less people able to play the game.
So far we're looking at pulling in less than $20M for the first year if you get 100K subs. Obviously 100K subs isn't the new benchmark. You need more than that and you have to hope to have a five year life cycle for the game in order to make back the investment, turn a profit, and do what? You have to be preparing the first expansion the day after launch. So you have one team fixing the problems in the game while the other team is building the next expansion. Obviously you should have developed a five year plan for the game's development so you can be in the technical part of that expansion the day after launch, not the initial development of it.
Go back to graphics. If we go with the slightly better than market average graphics EXPECTED just before the game's initial launch, then we can work with good stuff today in expectation that a large pool of potential subs will have the tech needed to play the game at better than average specs. However, if we go with the lesser graphics we need content. This is where the game is made or broken. It's a fact that MMO players don't necessarily need cutting edge graphics. What they want is good gameplay and good content.
That means you better have a world that appeals to a wide range of players. You need about 250K subs (or the dollar equivalent thereof at $15 a month or better) to make a really good game. So you can see that the subs may not make enough and RMT is needed to boost income. How many employees are there? 400? That's $20M a year in wages. Notice that I didn't include the physical overhead or utilities or anything else. General rule of thumb is that the office expenses equal labor in a physical production world, but since this isn't that way the office expenses will be less than labor. I don't have a hard figure for this, but I'm sure there are those who can tell us what an office building for 300 to 400 employees would cost to operate on a yearly basis. We also have to allow for marketing, licensing, legal, and any kind of cost that comes from outside the building.
If you have 250K subs, you have about $45M in yearly revenue. You need to boost that. RMT can help. Go back to the sales. Why sell anything for a 40% return? After the initial game sale, go digital download. You get the entire amount. For that matter think like this. Why even go with expansions? Sell mini expansions for $5 a pop that are good updates with entire new zones built around the game's progression. They can be made according to a master plan of development. Throw in some free ones as well. That might take out the long delays in product expansion and increase length of subs while raising the amount of revenue over time.
I think a good game can be made for about $35M, but it won't be cutting edge graphics. The trick is all in getting a very small group of people to build a game plan and then develop the game so that it launches with everything you want on Day one. The larger amount of employees get brought in when you're ready to move from concept and initial design to actual construction.
The plan isn't perfect, but then I don't have $35M to start making a game. I think the way to make a great game is to make a good game first. If it's great, people will play it. I think part of the problem is that the suits want WoW and that's not going to happen every time. Plan accordingly and make the good game. It could sell 1M copies and have 500K subs over 5 years or more, but make damn sure you make a game that gets you 250K subs.
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