GTA V dev costs over $137 million, says analyst

http://www.gamesindustry.biz/articles/2013-02-01-gta-v-dev-costs-over-USD137-million-says-analyst

Sterne Agee's Arvind Bhatia expects Take-Two blockbuster to sell 18 million, make over $230 million in operating profit

It's been said that you have to spend money to make money, and one analyst believes Take-Two is poised to do both in abundance with the upcoming Grand Theft Auto V. In a note to investors today, Sterne Agee's Arvind Bhatia said the game's recent delay will add to its development costs, but does nothing to blunt its potential success.

Bhatia detailed a "hypothetical profitability model" for GTA V based on an estimated development cost of $137.5 million (representing a team of 250 people working on the project for five years). Even adding projected marketing costs between $69 million and $109.3 million, Bhatia saw GTA V providing huge returns for Take-Two. In the event that GTA V sells "only" 15 million copies, Bhatia estimated Take-Two would still see more than $193.6 million in operating profit from the game for its fiscal year, or an earnings per share contribution of $2.11. Should the game outperform expectations with 25 million copies sold (a figure that assumes a much higher marketing spend), Bhatia put Take-Two's operating profit from the game at $390.8 million, with an EPS contribution of $4.26.

At the moment, Bhatia believes GTA V will sell 18 million units in Take-Two's fiscal year, saying it's likely to be the best-selling game of the year. Bhatia suggested it could be second only to the next Call of Duty, which he identified as Call of Duty: Modern Warfare 4. As for the delay, the analyst said it will make for a more crowded holiday market, especially combined with the potential of new consoles. Regardless, Bhatia said, "[T]his is a long-awaited title that consumers are unlikely to pass up and we remain bullish on our outlook for this title and for the company."

Yesterday, Take-Two delayed Grand Theft Auto V from its previous spring release window to September 17. The news drove Take-Two stock down sharply, although it had regained most of its value by mid-day trading today.

Game of the generation.  

That's more than I make in a week!

Seriously looking forward to this game. AAAA

They'll make that back opening day. If they haven't already in pre orders. Day F*n 1.

-

I'd don't mind R* spending this kind of money. I know it's being put ot good use. Others however...

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

osirisx3

1000 people who make anywhere from 40-125k a year, working on the same game for 3 or 4 years, and then they have to liscense all that music , voice acting, and stuff in the game, it costs alot of money.

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

osirisx3

my guess is that a big portion go for advertisement.

Those kinds of development costs are too high to be sustainable. I think we're nearing a big of a gaming bubble, and I would be surprised if the next console generation experiences severe sales woes.musicalmac

Hopefully this time, the game's mechanics and graphics will match it's budget. Grand Theft Auto IV's budget was 100 million and the game left much to be desired mechanically when it came to physics, driving, shooting, movement, cover, mission structure, etc. Not to mention some of the graphics and animations were just downright terrible, even on the computer, and looked like Playstation 2 hold-overs.

http://www.gamesindustry.biz/articles/2013-02-01-gta-v-dev-costs-over-USD137-million-says-analyst

 

[quote=""]

Sterne Agee's Arvind Bhatia expects Take-Two blockbuster to sell 18 million, make over $230 million in operating profit

It's been said that you have to spend money to make money, and one analyst believes Take-Two is poised to do both in abundance with the upcoming Grand Theft Auto V. In a note to investors today, Sterne Agee's Arvind Bhatia said the game's recent delay will add to its development costs, but does nothing to blunt its potential success.

Bhatia detailed a "hypothetical profitability model" for GTA V based on an estimated development cost of $137.5 million (representing a team of 250 people working on the project for five years). Even adding projected marketing costs between $69 million and $109.3 million, Bhatia saw GTA V providing huge returns for Take-Two. In the event that GTA V sells "only" 15 million copies, Bhatia estimated Take-Two would still see more than $193.6 million in operating profit from the game for its fiscal year, or an earnings per share contribution of $2.11. Should the game outperform expectations with 25 million copies sold (a figure that assumes a much higher marketing spend), Bhatia put Take-Two's operating profit from the game at $390.8 million, with an EPS contribution of $4.26.

At the moment, Bhatia believes GTA V will sell 18 million units in Take-Two's fiscal year, saying it's likely to be the best-selling game of the year. Bhatia suggested it could be second only to the next Call of Duty, which he identified as Call of Duty: Modern Warfare 4. As for the delay, the analyst said it will make for a more crowded holiday market, especially combined with the potential of new consoles. Regardless, Bhatia said, "[T]his is a long-awaited title that consumers are unlikely to pass up and we remain bullish on our outlook for this title and for the company."

Yesterday, Take-Two delayed Grand Theft Auto V from its previous spring release window to September 17. The news drove Take-Two stock down sharply, although it had regained most of its value by mid-day trading today.StrongDeadlift

Game of the generation.  

They should take a few lessons from CD Project about budget management.

Those kinds of development costs are too high to be sustainable. I think we're nearing a big of a gaming bubble, and I would be surprised if the next console generation experiences severe sales woes.musicalmac

You talk like a lot games do this. This an execption and an installment that is released every 5-6 years with huge sales.

http://www.gamesindustry.biz/articles/2013-02-01-gta-v-dev-costs-over-USD137-million-says-analyst

 

[quote=""]

Sterne Agee's Arvind Bhatia expects Take-Two blockbuster to sell 18 million, make over $230 million in operating profit

It's been said that you have to spend money to make money, and one analyst believes Take-Two is poised to do both in abundance with the upcoming Grand Theft Auto V. In a note to investors today, Sterne Agee's Arvind Bhatia said the game's recent delay will add to its development costs, but does nothing to blunt its potential success.

Bhatia detailed a "hypothetical profitability model" for GTA V based on an estimated development cost of $137.5 million (representing a team of 250 people working on the project for five years). Even adding projected marketing costs between $69 million and $109.3 million, Bhatia saw GTA V providing huge returns for Take-Two. In the event that GTA V sells "only" 15 million copies, Bhatia estimated Take-Two would still see more than $193.6 million in operating profit from the game for its fiscal year, or an earnings per share contribution of $2.11. Should the game outperform expectations with 25 million copies sold (a figure that assumes a much higher marketing spend), Bhatia put Take-Two's operating profit from the game at $390.8 million, with an EPS contribution of $4.26.

At the moment, Bhatia believes GTA V will sell 18 million units in Take-Two's fiscal year, saying it's likely to be the best-selling game of the year. Bhatia suggested it could be second only to the next Call of Duty, which he identified as Call of Duty: Modern Warfare 4. As for the delay, the analyst said it will make for a more crowded holiday market, especially combined with the potential of new consoles. Regardless, Bhatia said, "[T]his is a long-awaited title that consumers are unlikely to pass up and we remain bullish on our outlook for this title and for the company."

Yesterday, Take-Two delayed Grand Theft Auto V from its previous spring release window to September 17. The news drove Take-Two stock down sharply, although it had regained most of its value by mid-day trading today.StrongDeadlift

Game of the generation.  

Yeah GTAIV was too....NOT.

I hope they are releasing this for the PS4 too. All that money to look like crap on the old generation hardware would be a waste...artistically. It will sell regardless.

Imagine how much a next gen GTA would cost....

[QUOTE="osirisx3"]

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

MK-Professor

my guess is that a big portion go for advertisement.

Only games with the popularity of GTA can "risk" spending so much time and money on a title.

With the delay I kinda hope they release this for next gen consoles as well. Just an increase in resolution, frame rate and draw distance would be enough to warrant the upgrade for me. GTAV could make an absolute mint!

Imagine how much a next gen GTA would cost....

KillzoneSnake

Those kinds of development costs are too high to be sustainable. I think we're nearing a big of a gaming bubble, and I would be surprised if the next console generation experiences severe sales woes.musicalmac

Only games with the popularity of GTA can "risk" spending so much time and money on a title.

 

With the delay I kinda hope they release this for next gen consoles as well. Just an increase in resolution, frame rate and draw distance would be enough to warrant the upgrade for me. GTAV could make an absolute mint!

HaRmLeSS_RaGe

Whatt's sad and amazing is that the next Call of Duty will make more than GTAV because their developments are basically zero now. Just copy/paste and make a billion dollars.

Whatt's sad and amazing is that the next Call of Duty will make more than GTAV because their developments are basically zero now. Just copy/paste and make a billion dollars.

StrongBlackVine

[QUOTE="StrongDeadlift"]

http://www.gamesindustry.biz/articles/2013-02-01-gta-v-dev-costs-over-USD137-million-says-analyst

 

[quote=""]

Sterne Agee's Arvind Bhatia expects Take-Two blockbuster to sell 18 million, make over $230 million in operating profit

It's been said that you have to spend money to make money, and one analyst believes Take-Two is poised to do both in abundance with the upcoming Grand Theft Auto V. In a note to investors today, Sterne Agee's Arvind Bhatia said the game's recent delay will add to its development costs, but does nothing to blunt its potential success.

Bhatia detailed a "hypothetical profitability model" for GTA V based on an estimated development cost of $137.5 million (representing a team of 250 people working on the project for five years). Even adding projected marketing costs between $69 million and $109.3 million, Bhatia saw GTA V providing huge returns for Take-Two. In the event that GTA V sells "only" 15 million copies, Bhatia estimated Take-Two would still see more than $193.6 million in operating profit from the game for its fiscal year, or an earnings per share contribution of $2.11. Should the game outperform expectations with 25 million copies sold (a figure that assumes a much higher marketing spend), Bhatia put Take-Two's operating profit from the game at $390.8 million, with an EPS contribution of $4.26.

At the moment, Bhatia believes GTA V will sell 18 million units in Take-Two's fiscal year, saying it's likely to be the best-selling game of the year. Bhatia suggested it could be second only to the next Call of Duty, which he identified as Call of Duty: Modern Warfare 4. As for the delay, the analyst said it will make for a more crowded holiday market, especially combined with the potential of new consoles. Regardless, Bhatia said, "[T]his is a long-awaited title that consumers are unlikely to pass up and we remain bullish on our outlook for this title and for the company."

Yesterday, Take-Two delayed Grand Theft Auto V from its previous spring release window to September 17. The news drove Take-Two stock down sharply, although it had regained most of its value by mid-day trading today.jhonMalcovich

Game of the generation.  

They should take a few lessons from CD Project about budget management.

[QUOTE="jhonMalcovich"]

[QUOTE="StrongDeadlift"]

http://www.gamesindustry.biz/articles/2013-02-01-gta-v-dev-costs-over-USD137-million-says-analyst

 

[quote=""]

Sterne Agee's Arvind Bhatia expects Take-Two blockbuster to sell 18 million, make over $230 million in operating profit

It's been said that you have to spend money to make money, and one analyst believes Take-Two is poised to do both in abundance with the upcoming Grand Theft Auto V. In a note to investors today, Sterne Agee's Arvind Bhatia said the game's recent delay will add to its development costs, but does nothing to blunt its potential success.

Bhatia detailed a "hypothetical profitability model" for GTA V based on an estimated development cost of $137.5 million (representing a team of 250 people working on the project for five years). Even adding projected marketing costs between $69 million and $109.3 million, Bhatia saw GTA V providing huge returns for Take-Two. In the event that GTA V sells "only" 15 million copies, Bhatia estimated Take-Two would still see more than $193.6 million in operating profit from the game for its fiscal year, or an earnings per share contribution of $2.11. Should the game outperform expectations with 25 million copies sold (a figure that assumes a much higher marketing spend), Bhatia put Take-Two's operating profit from the game at $390.8 million, with an EPS contribution of $4.26.

At the moment, Bhatia believes GTA V will sell 18 million units in Take-Two's fiscal year, saying it's likely to be the best-selling game of the year. Bhatia suggested it could be second only to the next Call of Duty, which he identified as Call of Duty: Modern Warfare 4. As for the delay, the analyst said it will make for a more crowded holiday market, especially combined with the potential of new consoles. Regardless, Bhatia said, "[T]his is a long-awaited title that consumers are unlikely to pass up and we remain bullish on our outlook for this title and for the company."

Yesterday, Take-Two delayed Grand Theft Auto V from its previous spring release window to September 17. The news drove Take-Two stock down sharply, although it had regained most of its value by mid-day trading today.heretrix

Game of the generation.  

They should take a few lessons from CD Project about budget management.

Yeah pretty safe to say Rockstar knows what they are doing...

[QUOTE="StrongDeadlift"]

http://www.gamesindustry.biz/articles/2013-02-01-gta-v-dev-costs-over-USD137-million-says-analyst

 

[quote=""]

Sterne Agee's Arvind Bhatia expects Take-Two blockbuster to sell 18 million, make over $230 million in operating profit

It's been said that you have to spend money to make money, and one analyst believes Take-Two is poised to do both in abundance with the upcoming Grand Theft Auto V. In a note to investors today, Sterne Agee's Arvind Bhatia said the game's recent delay will add to its development costs, but does nothing to blunt its potential success.

Bhatia detailed a "hypothetical profitability model" for GTA V based on an estimated development cost of $137.5 million (representing a team of 250 people working on the project for five years). Even adding projected marketing costs between $69 million and $109.3 million, Bhatia saw GTA V providing huge returns for Take-Two. In the event that GTA V sells "only" 15 million copies, Bhatia estimated Take-Two would still see more than $193.6 million in operating profit from the game for its fiscal year, or an earnings per share contribution of $2.11. Should the game outperform expectations with 25 million copies sold (a figure that assumes a much higher marketing spend), Bhatia put Take-Two's operating profit from the game at $390.8 million, with an EPS contribution of $4.26.

At the moment, Bhatia believes GTA V will sell 18 million units in Take-Two's fiscal year, saying it's likely to be the best-selling game of the year. Bhatia suggested it could be second only to the next Call of Duty, which he identified as Call of Duty: Modern Warfare 4. As for the delay, the analyst said it will make for a more crowded holiday market, especially combined with the potential of new consoles. Regardless, Bhatia said, "[T]his is a long-awaited title that consumers are unlikely to pass up and we remain bullish on our outlook for this title and for the company."

Yesterday, Take-Two delayed Grand Theft Auto V from its previous spring release window to September 17. The news drove Take-Two stock down sharply, although it had regained most of its value by mid-day trading today.jhonMalcovich

Game of the generation.  

They should take a few lessons from CD Project about budget management.

[QUOTE="StrongBlackVine"]

Whatt's sad and amazing is that the next Call of Duty will make more than GTAV because their developments are basically zero now. Just copy/paste and make a billion dollars.

RR360DD

[QUOTE="osirisx3"]

my guess is that a big portion go for advertisement.

MK-Professor

[QUOTE="osirisx3"]

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

crimsonman1245

1000 people who make anywhere from 40-125k a year, working on the same game for 3 or 4 years, and then they have to liscense all that music , voice acting, and stuff in the game, it costs alot of money.

Alot of games like GTAV, Crysis 3 would benefit greatly if they made them adaptable for next gent release as well. The money it takes too make these games are climbing higher and higher hence why we have alot of developers going out of business n the rise of indie developers. I mean, why use all that budget and not take advantage of all the possible platforms

[QUOTE="MK-Professor"]

[QUOTE="osirisx3"]

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

Cranler

my guess is that a big portion go for advertisement.

somewhere in the article say marketing costs.

From digitalbattle.com/2010/02/20/top-10-most-expensive-video-game-budgets-ever/

When it comes to sheer production values, sheer amount of features, the details, no game beats Grand Theft Auto 4. The scope of the production dwarfs any other game: over 1,000 people worked on the game for over 3 and a half years, doing everything from studying New York city with cameras that recorded city traffic for months, to contacting over 2,000 people just to obtain the rights to the hundreds of music tracks that can be listened to in the game. Price to record a master for each track ran at around $10,000 and that excludes the license and royalty fees. Theres enough content in the game to keep the average gamer immersed for at least 100 hours. There should be, with a budget of $100 million, GTA 4 is the most expensive video game ever made.

Just the work they did getting all the music seemed like a big undertaking and its safe to think they would only expand things for the sequel.

They should take a few lessons from CD Project about budget management.

jhonMalcovich

What you fail to realize is that average salaries are much lower in Poland than in the UK. And R* North has twice as many employees than CDPR. 

[QUOTE="StrongBlackVine"]

Whatt's sad and amazing is that the next Call of Duty will make more than GTAV because their developments are basically zero now. Just copy/paste and make a billion dollars.

RR360DD

somewhere in the article say marketing costs.

MK-Professor

It was about adding another $60 million to $100 million for marketing, making the total budget ~$200 million, if not drastically more.

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

osirisx3

Let's generalise a bit and say $50k a year, 4 years of GTA V development, that is $200k for that one person over the development of the game, let's say 400 employees, that is $80 million right there.

I'm just guessing though, I don't know the pay or number of employees, though I'm sure many make more than $50k a year.

1: people work on GTA series most likely all expericed devs so their pay is more then most just guessing

2: MOST inportant they know they will get that money back so they not truly worried about spending it

By the way, it will be 5.5 years of development when it launches.  Not 3 or 4.

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

osirisx3

It is not like the old amiga/NES days when only 2-5 PC-nerds could make a game. Nowa days you can have over 100people working on the game.

By the way, it will be 5.5 years of development when it launches.  Not 3 or 4.

StrongDeadlift

[QUOTE="Cranler"][QUOTE="MK-Professor"]

my guess is that a big portion go for advertisement.

MK-Professor

somewhere in the article say marketing costs.

[QUOTE="osirisx3"]

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

SaltyMeatballs

Let's generalise a bit and say $50k a year, 4 years of GTA V development, that is $200k for that one person over the development of the game, let's say 400 employees, that is $80 million right there.

I'm just guessing though, I don't know the pay or number of employees, though I'm sure many make more than $50k a year.

I hope they are releasing this for the PS4 too. All that money to look like crap on the old generation hardware would be a waste...artistically. It will sell regardless.

StrongBlackVine

holy f8ck. I wish that kind of money was used for an rpgsilversix_

[QUOTE="SaltyMeatballs"]

[QUOTE="osirisx3"]

how the hell does it cost almost 140 million $ for a bunch of people in front of a pc for a few years?

k2theswiss

Let's generalise a bit and say $50k a year, 4 years of GTA V development, that is $200k for that one person over the development of the game, let's say 400 employees, that is $80 million right there.

I'm just guessing though, I don't know the pay or number of employees, though I'm sure many make more than $50k a year.

Edit: actually, maybe not, those are 2 year development cycles so they need more in shorter time frame.