Game development costs to double?

The retail price of Xbox 360 games may be creeping up $10 from what gamers are used to paying, but they might be getting off easy compared to the people who have to make the games.

Game publisher Bandai expects development costs for next-generation games to double, according to a Bloomberg report out of the Tokyo Game Show last Friday. Shin Onozawa, a managing director of game software with Bandai, told Bloomberg that the investment required to develop a next-gen title could skyrocket to one billion yen ($9 million), up from current costs that range from 100 million yen ($900,000) to 500 million yen ($4.5 million).

"Costs will begin to fall a year or so after the consoles are released and game makers get used to the systems," Unozawa told Bloomberg. He also said that the company's upcoming merger with Namco should cut their software development costs by about 20 percent, though he did not say how soon.

Unozawa's figures on current-generation development costs conflict with those of a recent Computer Entertainment Supplier's Association (CESA) report. In the CESA report, which listed the average development costs for games across all current systems, only the Xbox had an average development cost higher than the 100 million-yen low end of Onozawa's range. The average price of the 13 Xbox games included in the survey was 202 million yen ($1.8 million), with PlayStation 2 and GameCube development costs trailing behind at 96 million yen ($877,634) and 90 million yen ($822,857), respectively. Information on development costs for that study was voluntarily supplied by publishers.