Gaming Business

The Cost of Creating and Maintaining an MMORPG

I ran across this forum posting, and found it to be invaluable to anyone intersted in starting their own gaming company. I consider this to be required reading. I am re-posting it below:

This is good information. In the 5 years I have been developing Visions, I would wager 99.9999% of the advice I got was “that’s impossible” or “you can’t make an MMO without a big budget” or “You can’t make a game unless you are a programmer” and a myriad of other “pipe dream” type comments that were meant to discourage me from trying. I am really happy to see that you DO in fact want to encourage people, and that you are just trying to help them tackle this GARGANTUAN sized project with open eyes. It is refreshing.

I would like to throw out some numbers that I’ve put together on my own in the last few months. For those who are hoping to not only recruit a team (us non-programmer types really truly do need at least a small team earlier in the development cycle than what you have listed in this article - but it CAN be done!) but to also hire a full time team might want to run some numbers before they go seeking funding. Not to discourage anyone from seeking funding, I am hoping to find funding for our project at some point also. But to give people a better idea of exactly HOW MUCH funding they are going to need. Again, approach the problem with eyes wide open and then you won’t be quite as surprised by the obstacles along the way.

A little background about my team, to give you some perspective. I started writing the design for Visions about 6 years ago, in 2003. I recruited my first volunteer in 2004. I’ve had a small team of volunteers consistently ever since. We have changed engines three times, due to encountering impassible road blocks. We are finishing the final stages of porting to TGEA 1.8.1 right now, so our game world looks very empty again. Changing engines is NOT an easy decision to make. It is demoralizing, time consuming, and tedious. But sometimes you reach a point where it’s either switch or quit. And we didn’t want to quit. So we bit the bullet and made the switch. Don’t underestimate the power of morale though, the punch in the belly feeling often causes people to take a break, refocus their attention on other things in life for a while - or maybe permanently - and the team structure often takes a morale hit too. We all find ourselves wishing we had funding, a paycheck, even wishing we could work on this FULL TIME instead of after hours and on weekends when we’re already tired. Those who are truly dedicated to the project don’t want the project to end, they want it to go faster.

And indeed, faster is imperative. We took a break from working on Visions directly for about 19 months while we created a small racing game called Chariots. The reasoning behind creating Chariots (as opposed so a dozen other game ideas we had) was that we could then turn around and incorporate code from Chariots back into Visions when it was done and our time wouldn’t really be lost. And in the mean time, it was hoped to be a morale boost for our team to see that we REALLY CAN make a game! And we did. And overall I believe it helped. But I would do it differently if we were to make that decision again. Because time is of the essence, and we’re running out of time.

I’ve looked at how long it took us to make Chariots, one tiny little fraction of the Visions design document, and if we continue at the same pace to complete all the components for Visions, it is going to take us roughly 125 years to finish Visions. We need a full time, full scale team if we are going to finish in this lifetime. 10 hours a week just isn’t going to cut it. So I started looking at funding options. There are no grant opportunities for profit-oriented companies. And Angel Investors are about as rare as divine angels themselves (though not impossible, highly unlikely to find one!). Loans are out of the question because unanimously, business loans require payback to start in 30 days. And it will take at least 2 years to finish Visions even with a full scale team of 180 people.

How much does a full scale full time team of 180 people cost? About $20 million a year. That’s for average wages at the current Oregon salary standards found on this website: http://www.payscale.com/research/US/State=Oregon/Salary The cost of running a full scale team, JUST IN SALARIES ALONE is over $12 million, and this is a conservative estimate.

If you want to offer competitive salaries to retain employees, the cost will be higher. Here is my breakdown for 179 staff:

1 Producer - $99,000
2 Executive Assistants - $58,000 per year per employee
1 Receptionist – $35,000 per year
1 Accountant - $58,000 per year
5 HR Associates - $60,000 per year per employee
1 Art director - $70,000 per year
6 Lead artists - $67,000 per year per employee
55 artists - $60,000 per year per employee
1 Programming Director - $99,000 per year
5 Programming Leads - $96,000 per year per employee
50 Programmers & Scripters - $89,000 per year per employee
1 IT Director - $89,000
8 IT Network Engineers - $60,000 per year per employee
1 – Senior Service Manager - $60,000
6 – Customer Service Managers - $57,000 per year per employee (Plus 15 to 25 – CS Volunteers)
1 Marketing Director - $77,000
2 Marketing Managers - $67,000 per year per employee
10 Marketing & Web Developers - $60,000 per year per employee
1 Quest Writer Director - $67,000
3 Quest Writer Managers - $60,000 per year per employee
15 Quest Writers - $57,000 per year per employee
3 Researchers - $57,000 per year per employee
= 179 Total Skilled Developers. $12,129,000 in total annual salary projections.

Then you need office space, and the costs associated with that. This area I am the most unsure about my estimates, as I have never actually operated an office of this size, and my numbers might be too low. There are likely additional hidden costs and if possible a cushion should be added to buffer this number. But it is important to have a starting point, and this is what I came up with:
6500 Sq Ft. x $23.40 per SF per year = $152,100 per year lease
Stage 2 Office Supplies $45,000 per year estimated
Stage 2 Computer Equipment $445,000
-Office stations, conference tables, chairs, Filing systems:
Stage 2 Office Furniture TOTAL $5,683,220
=TOTAL Stage 2 Office Expenses: $6,325,320

Utilities and services add up real fast, particularly with bandwidth costs which can run over $25,000 a month for an MMO if you’re not careful. These are some numbers that I came up with, based on inquiries to local utilities and other business people who are familiar with such expenses.
Legal Services cost $150,000 per year estimate
Business Insurance cost $12,000 per year estimated
Janitoral services $65,000 per year estimate
Phone Service $12,000 per year estimated
Internet $180,000 per year estimated
Power $24,000 per year estimated
Groundskeeping $12,000 per year estimated
=TOTAL utilities and services: $455,000

If you want to upgrade to an engine that is ACTUALLY DESIGNED for an MMOG, like Hero Engine or BigWorld, that comes at a high pricetag. If you can get funding for it though, it could save you many months of development required to modify a single player FPS engine that was never really meant to be a MMOG engine. If you’re happy with your current engine, you can deduct $1 million from this group. The rest of the technology licenses are estimates, and likely to vary depending on your team’s particular needs.

MMOG (Hero or BigWorld) Engine $1,000,000
Site Licenses for Photoshop CS4 $60,000
Site Licenses for Max $80,000
Site Licenses for MS VS C++ $25,000
MoCap Editor Software License $50,000
MoCap cameras & equipment $150,000
Server Software Site Licenses $5,000
Audio Software licenses $10,000
Sound Equipment $50,000
=TOTAL Technology Expenses: $1,380,000

If you want your game to reach players, SOME amount of marketing is going to have to be invested also. The more you can put into marketing, if it is spent wisely, the higher your chances of success will be. These marketing estimates are VERY conservative. For example, if a person wanted to put a full page ad in a Gamer magazine, it will cost upwards of $250,000 for one issue. Sure there are free marketing opportunities too, blogs, social networking, letters to editors, article authoring, etc. But everything takes time, at the least you will need to spend time writing articles instead of developing the game for a while. There is always a cost somewhere. Weigh the balance carefully.
Ads $100,000
Promotional products $50,000
Conference Fees $25,000
Travel expenses $75,000
=Total Marketing Expenses: $250,000

So as you can see, I am not exaggerating when I say, it costs over $20 million a year to run a full time team on a conservative budget. If you need to add in relocation packages to get your team members moved to your headquarters location, add additional funding estimates for that. There is a lot to consider. And I hope that this post resoundingly confirms that making a MMOG is not so much about making a game as it is about building a business. I don’t particularly like the business side of it, but it is necessary for the game to happen. Making a game is not all fun and games. But it can be rewarding.

God bless you.
-Sparkling
Chariotsgame.com

–Source