40 MILLION dollars...

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Triggerhappy41

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So as we all know VALVe has spent 40 million dollars making hl2. I was just wondering how can it possibly cost that much? Im no game maker, but could someone fill me in on why it costed that much?
 
~50 employees earning about $70,000(US) a year = $3,500000

3,500000 * 5 years = 17.5 million.
New hardware costs plus other business related expenditures over 5 years = 10 million

Conclusion, i have greatly underestimated how much money Valve employees earn.
 
Its not a big deal, Newell was a programmer for microsoft b4 this. So obviously he could give half-life away if he wanted to. He just wants to make really greak games that gamers expect these days. So its more like a hobby than a business. :)
 
RhapSidious said:
Even with the leak, I find it very hard to believe they've spent 40 million developing this game. I don't know for sure, but I'm pretty confident games have a max. budget of $1-5 mil. Maybe $8-11 mil for some real triple-a titles.
$40 million is nuts, even with advertising. They'd have to sell a million units (which it easily will) to break EVEN. Even though it's possible, it seems kinda unlikely businesswise.
Click to expand...

This is from my post on another thread regarding this issue... http://www.halflife2.net/forums/showthread.php?t=21451&page=7&pp=15
 
i think that salery is a part of the pie but i also believe that they 'bought' certain technologies that were developed further than valve themselves could have had the time/resources to do such as havok and the facial system. im not a game maker nor do i plan on becoming one so i havent a clue as to where the money burns, it just seems logical.
 
What I want to know is how much of the 40 million was squandered and wasted???!!!

I hope we see 40 million worth of work on display in the game...
That amount implies that HL2 spared no expense to "knock our socks off".

Personally, I think Lombardi/Gabe figures that for "marketing" purposes 40 million dollars sounds really good so that figure gets tossed around (especially if he is within earshot of a CNN reporter)
 
Yes they bought alot of their technology, and I'm sure they gave Softimage some loot for making a dumbed down edition of XSI especially for the hl2 modders. Even so, that figure(40 mil) is way over the top. It's likely that that figure is the total spent so far on all Source engine products, not only hl2 but also cs2 and tf2. Gabe prolly just threw that number out there because he though it was impressive.


If they really blew 40 mil on just hl2, thats insane. As someone else suggested, 5 or 6 high end games could have been developed for that amount. It's crazy.
 
And how exactly will you define what's 40 millions' worth and not, say, 25 millions' worth? I say wait for the game and if you have fun playing it, don't try to second-guess the cost. Even if they spent 20 million in the beginning and scrapped the product of that first 20 million and then spent another 20 million making a totally different game, you can always put it down to a learning experience...
 
i dont get whats so bad about 40 million? its not that much, the next spiderman movie is goin to cost 400 million to make, so shush.
 
i dont get whats so bad about 40 million? its not that much, the next spiderman movie is goin to cost 400 million to make, so shush.
Click to expand...

You can't be serious. The cost of big budget movies is due to so many tens of millions of dollars worth of stuff that no game would ever have to take into consideration. Hell, the cost of just 2 or 3 of the main actors in spiderman 2 would equal the entire 40 mil Gabe claims hl2 has cost.
 
Even with the leak, I find it very hard to believe they've spent 40 million developing this game. I don't know for sure, but I'm pretty confident games have a max. budget of $1-5 mil. Maybe $8-11 mil for some real triple-a titles.
$40 million is nuts, even with advertising. They'd have to sell a million units (which it easily will) to break EVEN. Even though it's possible, it seems kinda unlikely businesswise.
Click to expand...

There is no "maximum" budget for games.

HL sole around 13 million copies at, say, $40. That's $520,000,000

Not a small figure. Let's take a worse-case scenario and say that Valve only get 10% after the publisher has finished with that (and it was probably higher, as Valve self-funded Half-Life's development and weren't paying any advances off)

So that gives Valve a nice $52,000,000

That covers the budget for Half-Life 2, and still leaves a nice chunk of cash left over. This also fails to take into account sales of HL for the PS2, CS retail, Blue Shift and Op For, so that figure would likely be higher.

Valve are still in profit from Half-Life. They'll easily make a further profit on HL2, not least because all sales via Steam (and there will be a lot, despite all the bitching) will give Valve 100% of the revenue off each sale, rather than the percentage left by the publisher.
 
Triggerhappy41 said:
So as we all know VALVe has spent 40 million dollars making hl2. I was just wondering how can it possibly cost that much? Im no game maker, but could someone fill me in on why it costed that much?
Click to expand...


It’s the technology, “Source”. Thats probably where majority of the work and money went and its worth it coz its gonna pay off big time. At GDC 2004 they said something about how it’s much easier and less expensive to buy technology than to invest time and money to build it. Valve decided to put the time, effort and money in to build the technology first then to build the game. So now all they have to do is sell licenses to companies so they can use source and they will make tons of money back, on the technology part of it at least, then hopefully hl2 will sell and make them money back for the game part of it.

From what I saw in the magazines they made it sound like making Half-Life 3 is gonna be easy as hell now that they have the technology all ready and set to go. Also the U.S military is now interested in source. $$$$
 
They also had to buy the liscense to the Havok engine. Probably not too cheap.
 
I wasn't saying they wouldn't make their money back. I'm sure they will. But 40 mil for 1 game is very steep. I don't care if they spent that much, all I'm saying is I don't see the justification for it. I don't see any reason why the game would cost that much for them to make. Even when you consider they bought alot of the pieces to their new engine, and when you consider the 5 year production time, 40 mil is still a way out there figure. Employee salary, equipment, and third party software accounts for about 50% to 65%. Where did they blow the rest of the money? Thats all I'm wondering.

40 mil for one game is nuts.
 
The cost of games is just going to increase anyway, i don't see why this figure is so shocking to some of you.

Apparently it cost about $30 million to make Enter the Matrix and that was whipped up in about 2-3 years.
 
We have no way of knowing what technologies they licensed, how much they cost, how much they pay their staff, how much their premises cost to lease (or buy!), what kind of outsourcing they may pay for, etc etc.

The longer a game is in development, the higher the budget is. The $10 million figure is about average for a AAA title with a 2-year lead time. HL2 has been in development for the best part of 6 years. I don't see $40 million as an unrealistic figure.
 
Let me put it another way - you're not going to get Gabe to give you a spreadsheet with all the costs of HL2 on it, are you? You're just going to have to accept what he says.
 
Ok then. We will just assume Gabe bought a 20 million dollar snow cone machine for the office, hence his significant increase in capacity. That way, we can all accept what Gabe says as truth even though every ounce of logic dictates it can't be, and we know this is a very safe bet because Gabe has never let us down or flat out lied to us before, right?

Yes, this sounds reasonable. Ok then.
 
A few points:
- They didn't buy facial technology. They used the available research of Dr Paul Ekman and then Ken Birdwell put serious man-hours into translating that ‘emotional palette’ into a polygon and shader based frame-work of the face, eyeball and musculature systems. They also put serious development time into the Face Poser system. Whether or not there was some licensing of lip-sync stuff I’m not sure but 99% of the work is Valve's.

- Speaking of which developing polished tools and support systems as part of end-user SDK is hardly an inexpensive walk in the park either.

- They didn't just licence Havok like any other developer for use in their single game, they licensed it for redistribution with the engine as a core component completely available to other licensees of Source and mod-makers. That costs a lot more than just a standard licence though apparently there was some co-development initiative which might have reduced the cost a little.

-Don’t forget Steam’s development – which is probably rolled into the costs.

- Most of you are forgetting to roll in the costs of R&D. Remember Intel's scaleable multi-resolution mesh (MRM) technology? Remember the in-game voice communication system with lip-synch? Remember the netgaming partnership they had with some company? Probably most of you if you remember these at all would associate them with TF2 or CS – but clearly they are rolled into HL2’s development and only made a presence in CS as a testing ground.
 
SheepFactory said:
Ok then. We will just assume Gabe bought a 20 million dollar snow cone machine for the office, hence his significant increase in capacity. That way, we can all accept what Gabe says as truth even though every ounce of logic dictates it can't be, and we know this is a very safe bet because Gabe has never let us down or flat out lied to us before, right?

Yes, this sounds reasonable. Ok then.
Click to expand...


Tut tut, such flippancy. You missed my point, which was that we'll never know one way or another, no matter how much people try to debate it here. So you either accept Gabe's word for it and get on with your life, or you choose to believe he's lying, although I really can't see any sound justification for that. Why on earth would he lie about their budget? What could he possibly gain?
 
Tut tut, such flippancy. You missed my point, which was that we'll never know one way or another, no matter how much people try to debate it here. So you either accept Gabe's word for it and get on with your life, or you choose to believe he's lying, although I really can't see any sound justification for that. Why on earth would he lie about their budget? What could he possibly gain?
Click to expand...

No, I got your point. I just disreguarded it. You say that we have no reason to discuss it because we will never know where the money went. I say discussing these things is exactly what we are here to do. This is a community developed to give fans a place to duscuss the various topics of hl2, including the cost of development if we choose to.

We will not get confirmation from Gabe on 90% of the topics we discuss here, so according to you we should all just pack up and leave. And yet, you invest time as a mod here. Your "point" is therefore rediculous.

I stand by my snow cone theory.
 
I truly don't see what the big deal is with $40 million. By today's standards that's really not that much. Like PiMuRho said you have to consider that they have been at this for about 6 years now. You have to take into account all sorts of things like:

- Licensed software such as 3D apps and the like
- The Havok physics engine
- Computer hardware
- Salaries
- Office rent
- Third pary contributers
- And who knows what all else

Sure it seems extravegant by the standards of say 5 to 10 years ago, but things are going up in cost and it seems like a reasonable figure to me by today's standards.

Plus, wasn't it said that HL2 would take about 36 to 40 hours to beat? That seems like a pretty good amount of entertainment for the money it took to make considering that a $200 million movie only entertains you for maybe 2 or 3 hours.

Also, I know that to get multiple licenses for engineering software can be around a million dollars for a single program. So, even though it's not the same thing, I imagine Valve has spend a ton on software licenses.
 
SheepFactory said:
No, I got your point. I just disreguarded it. You say that we have no reason to discuss it because we will never know where the money went. I say discussing these things is exactly what we are here to do. This is a community developed to give fans a place to duscuss the various topics of hl2, including the cost of development if we choose to.

We will not get confirmation from Gabe on 90% of the topics we discuss here, so according to you we should all just pack up and leave. And yet, you invest time as a mod here. Your "point" is therefore rediculous.

I stand by my snow cone theory.
Click to expand...

Read. Understand. Post.

At no point did I say we shouldn't discuss it. It's a discussion forum. I was merely pointing out that we'll never know either way.

Don't put words in my mouth. It's Ridiculous.
 
SheepFactory said:
No, I got your point. I just disreguarded it. You say that we have no reason to discuss it because we will never know where the money went. I say discussing these things is exactly what we are here to do. This is a community developed to give fans a place to duscuss the various topics of hl2, including the cost of development if we choose to.

We will not get confirmation from Gabe on 90% of the topics we discuss here, so according to you we should all just pack up and leave. And yet, you invest time as a mod here. Your "point" is therefore rediculous.

I stand by my snow cone theory.
Click to expand...

No, I think you did miss the point. Most of the things discussed will be answered once the game comes out. Financial information such as this, however, will likely never be disclosed. I believe all PiMuRho was getting at is that it's pointless to say that this is an extravagant amount when you can have no clue as to what it was spent on nor will it ever be likely that you will know.
 
See? Neutrino gets it! :)
 
I dunno. I think that if that $40 million figure covers everything Source-related, including R&D, third party licenses and wages for all the man-hours put into the project so far(not to mention STEAM), it doesn't seem unfathomable. Maybe it's misleading to present it as $40 million put into Half-life 2 alone, but when you consider that they're developing a product in Source that they intend to sell to third-party development houses, the word "investment" seems more appropriate than "spent".

How many games have used the Quake engine(besides Half-Life)? More to the point, what's the total gross sales figure look like for games that have licensed the Quake engine? Just between HL, RTCW, MoH, SoF2, CoD and the three Quake titles themselves, that's a metric assload of money. I dunno exactly how the licensing fees shake out, but my guess is id gets some share of the sales. All of those games were huge successes, due in no small part to the technology that powered them; love it or hate it, the Quake engine supported tight gameplay,smooth graphics and industry-standard-setting netcode. Also: Not having to spend time and money on R&D for a game engine frees up a lot of resources to be spent soley on content, which would more likely yield a great game than a gimmicky tech-demo.

Of course, it certainly helps to have a killer app for the engine you intend to market to third-party developers, and can anyone think of a single game that has gotten as much attention as HL2 since it was announced last year? If this game is anywhere near the level of quality it is being hyped to be, I see no reason why Source couldn't become to the post-DX9 generation what Quake was previously. And if they do manage that feat, will you still think that $40 million was too steep?
 
All those who have developed an advanced first class modern game please raise your hand.

All those who haven't?

Oh i see, all of you. Well then... that just about nullifies all of your own estimates on what a game of this calibur costs.

(I'm reffering to the people that think 40 million is rediculous)

Jeeeez, just because it's outside what you think is normal, it doesn't mean IT'S A LIE!

Stop being so god damned critical and get a life.


Gabe bashing really bothers me.
Did you realise he founded an extremely succesful game dev company?

What have you done? Oh... you hang around forums bashing people who are more succesful than you. Hah. Nice one, top 10.
:LOL:

I swear this place resembles a kindergarten playground sometimes...
 
Maybe it's misleading to present it as $40 million put into Half-life 2 alone,
Click to expand...

It's difficult not to, though. Steam, as an example, is so tightly integrated into HL2 that you couldn't really seperate the development costs/schedules/any other part of it, and yet Steam also exists without HL2.
 
All those who have developed an advanced first class modern game please raise your hand.
Click to expand...

*raises hand*

Although some may beg to differ on the definition of "first class"
 
I also honestly believe its because of valve sense of perfection. That leads to more time which = mo money, mo money, mo money. It’s like Stanley Kubrick with his films, he was obsessed about making things perfect and he said in the film buisness time is gold. He would take 3 years to make a movie which is too long but he could afford to do that. Gabe is the same way, he himself said he doesn’t care if another 20 million goes into it, he wants it perfect. I guess it just piles up over 6 years with all the work they did.

Just trying to imagine every little detail they must have done and redone over and over, and i'm not talking about just graphics, the clever gameplay stuff mainly. Man, I would be so happy if I was part of valves team right now.
 
Cool =)
And your posts on the issue back this up. I liked what you had to say. $10 a year, etc

So what are you working on? :E
 
Plug: I was working on the Battlecruiser games for 3000AD. I'm working on some stuff for handhelds at the moment (with some top-class industry veterans) as well as the project vaguely hinted at in my sig which I'm not allowed to talk about :)
 
Server, hardware, equipment, utilities, long-term/short-term jobs (finances, marketing, programming, artists, legal), licensing several technologies, the PR at E3 and perhaps part of the bill at the ATI Alcatraz event, not to mention publishing/copying/boxing costs.
I can easily imagine a $40 million budget.
 
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