How much can an XBLA game make?

GarageGames cofounder Jeff Tunnell breaks down the numbers on development for Microsoft's increasingly crowded downloadable game service and finds some hope for the little guy.

In a post on his blog this week, GarageGames cofounder Jeff Tunnell talked about the early success of Xbox Live Arcade and asked just how profitable games on the service could be. Tunnell has some knowledge of the subject, as GarageGames' launched Marble Blast Ultra on the service in January.

Tunnell broke down the numbers to come up with a working estimate of how much money a game like Marble Blast Ultra 3D brings in versus how much it costs to make. Tunnell used estimated figures for the exercise, rather than releasing exact numbers on Marble Blast Ultra. The first thing he noted is that the cost of XBLA development is rapidly escalating.

"Creating an XBLA game is taking most studios 6 to 12 months," Tunnell wrote. "Costs are currently ranging from $100,000 to $300,000...The industry-standard arms race will quickly make the top-end $300,000 budget a cheap product. Right now, I wouldn't consider attempting to make an XBLA game with a $100,000 budget. Development kits and Certification (QA testing) would eat up half of that, not leaving much for the actual game development. While these budgets may seem high to Indies, these budgets wouldn't buy coffee on an AAA console title for the retail box channel."

Tunnell wouldn't give an exact figure for the budget of Marble Blast Ultra, but suggested it was at the higher end of that range. He then figured out roughly how many people had paid the $10 worth of Marketplace Points for it by checking the game's leaderboards, which listed about 120,000 gamer tags.

So for the purposes of Tunnell's example, Marble Blast Ultra grossed about $1.2 million--but how much went to GarageGames? "The publicly available information on this is that the distribution fees for bringing a game to XBLA is 35 to 70 percent, depending upon participation by [Microsoft]," Tunnell wrote.

So if GarageGames funded its own development of the game and Microsoft only took 35 percent, the company would be left with $780,000. "Again, if you are a starving indie developer, this sounds like an infinite amount of money. But, in the world of publishers, this is not considered a big hit," Tunnell wrote.

Tunnell said when he headed up a studio for a publicly traded company, the benchmark of success was whether or not a game returned five times the amount invested into it. "But, I no longer have public shareholders to please," Tunnell pointed out. "As the cofounder of a small independent game technology provider that makes a few games, I am extremely happy with our returns from XBLA360, and I also know that we are not done yet."

Tunnell suggested that going forward, the big challenge for XBLA developers will simply be getting carried by the service. Microsoft has stressed that it will carefully manage the portfolio of games available on Xbox Live Arcade, and the increase in traditional publishers creating games for the service could make it more difficult for independents to get a spot at the table.

48 Comments

  • spartan1308

    Posted Aug 15, 2007 2:23 pm PT

    bookmark

  • blackadder89

    Posted Sep 23, 2006 5:25 pm PT

    "Is it going to change with XNA Express?"

    Hopefully

  • anamnawshad

    Posted Sep 23, 2006 10:29 am PT

    Great!

  • e_boulanger

    Posted Sep 22, 2006 6:53 pm PT

    "Microsoft has stressed that it will carefully manage the portfolio of games available on XBLA"

    Sounds to me that innovative games won't be able to make it to XBLA, because Microsft don't want to take any risk. I don't think I'll ever see something like Katamari Damacy on XBLA. Microsoft is killing the small and innovative game software developper.

    Is it going to change with XNA Express?

  • _Sam_

    Posted Sep 22, 2006 6:41 pm PT

    interesting

  • fedgem

    Posted Sep 22, 2006 2:51 pm PT

    I wish they'd come out with more games like GW: Evolved, those are the type of games I think people want. Classics are fun and all, but they're more novelties than anything. I want new games made by independent developers, not old games that I didn't even play back when they were new.

  • devxwill

    Posted Sep 22, 2006 1:10 pm PT

    need some more classics

  • Poltergeist13

    Posted Sep 22, 2006 1:04 pm PT

    I think gamers will always take a chance with unheard indie titles on XBLA. They have some really cool concepts and usually pretty original titles. But we also have to have the classics (Pac-Man, SFII, Frogger, Gauntlet, etc.) XBLA rocks as far as I'm concerned.

  • Hoopin4thelove

    Posted Sep 22, 2006 12:56 pm PT

    dude u can re-downloadany thing u deleted don'tbe some SLOW loser, plus u can use alternate hds just plug em in and use that as a storage device

  • Lepuke

    Posted Sep 22, 2006 11:26 am PT

    at least its an updated "easter egg" not the one you saw in PGR 2. The Geometry Wars "Evolved" is what is being sold on XBLA. Evolved is pretty damn superior to the original one from PGR 2. (Also included)

  • FrankieLA

    Posted Sep 22, 2006 9:32 am PT

    Bizarre Studios developed Geometry Wars. It wasn't "one guy", but the central team that worked on the last several PGR gaming titles. From what I understa, Geometry Wars was a little easter egg that was hidden in PGR2.

    What a brilliant way to make money from an easter egg.

  • Sydwynder

    Posted Sep 22, 2006 9:03 am PT

    uhhhh makemeweak, HOW BOUT NO!!!!!!!!!! The last thing we need is for the cost of XLA games to go up!!!!!!! Pull your head outta your.................

  • arab_prince

    Posted Sep 22, 2006 8:15 am PT

    hmm thats pretty interesting. I wonder what uno made.

  • makemeweak

    Posted Sep 22, 2006 7:10 am PT

    I've always wondered how the money was split up - good to know. I wish they'd bump the prices up a couple of bucks apiece to encourage more developers to make games for XBLA.

  • Mr_Bodywave

    Posted Sep 22, 2006 4:55 am PT

    There is no real reason that MS couldn't release an xbox360 with a 60GB or 100GB HD. People worry about having different configurations, but this wouldn't make a difference really. The amount of space is almost irrelevant for game developers--just whether it is there or not.

    In fact, they could release an xbox360 in 2007 with say 100GB HD, and HD-DVD in lieu of a price cut.

  • Mr_Bodywave

    Posted Sep 22, 2006 4:53 am PT

    Of course the cost of the development kits would be spread out over multiple XBLA games--so not fair to attribute it to a single game. QA would be constant though. As for the costs of games--say you have 3 employees--each making $100k a year. If they produce one game a year--that game would have a $300k cost in salary alone. However, if as the owner you make about $400-500k profit after costs--that isn't a bad profit for an person running a 3-4 person shop.

  • Generic_Dude

    Posted Sep 22, 2006 3:17 am PT

    "[$100,000] wouldn't buy coffee on an AAA console title for the retail box channel..." Ugh, such decadance. Drown in your coffee, you slovenly fatcats.

  • chikahiro94

    Posted Sep 22, 2006 3:13 am PT

    Actually, if I could just use an external drive purchasable from any given store with the 360, I'd be quite content. I just got a 300g, 7200 rpm external HD for $150 (a great price around here) that could have a partition sliced off for use with a console

  • smbius

    Posted Sep 22, 2006 2:55 am PT

    Microsoft should release new Hard Drives that have higher capacities. Keep all downloads accounted for each gamertag. It'll be good for online for re-downloading. All accomplishments are kept online anyway too.

  • smbius

    Posted Sep 22, 2006 2:49 am PT

    Microsoft has always been very smart about being profitable. They understand the market and don't really care if PS3 or Wii becomes the so-called "#1" console. What does it take to be #1? pure sales in games? Not anymore. Microsoft knows that they do not need to sell many games to stay in the video game market. Their bread and butter is XBL. It is a win-win situation. Indie developers get their chance to make moderate gains and get their unique games and ideas recognized. Microsoft benefits from the content and the subscribers they gain from unique content. In addition, Microsoft can always lower their royalty of indie content at anytime indie (or traditional) developers feel they are not getting any value for developing with XBLA.

  • Optimusv2

    Posted Sep 22, 2006 2:45 am PT

    The 50MB limit is no big deal... the small arms devs compressed the game from 1GB to 50MB.

    Which is why disc space isn't an issue with the 360.

  • TWOC2689

    Posted Sep 22, 2006 2:33 am PT

    Thanks Microsoft!

  • soupboy76

    Posted Sep 22, 2006 2:25 am PT

    With the release of XNA mixed with Xbox Live Arcade... expect within a year or two a slew of indie games to break out onto XBL. It really opens the door for smaller or single person developers to get noticed kind of like the independent film market. PS3 or Wii does not offer an inticing indie market at all to their consoles when you think about it. In other words, if your a developer starting out - Xbox Live Arcade will become your best break into the industry.

  • AdmiralDan

    Posted Sep 21, 2006 11:43 pm PT

    How much money did Geometry Wars make then? I thought only one guy made that game. He's a rich mofo if true.

  • VegetaMaelstrom

    Posted Sep 21, 2006 10:59 pm PT

    MS should up the size limit of XBLA games to at least 100MB. Just my opinion but it would open the doors to many more potential hit games. After all some of the downloads for demos and such are over 1GB so one tenth of that is certainly no hardship. On a side note, it may be time for MS to start shipping out much larger harddrives as the 20GB version won't last too long for many gamers.

  • wjc04c

    Posted Sep 21, 2006 10:21 pm PT

    this bodes well, not only for new XBLA developers, but also for those developing for the wii and ps3. i'm all for cheap, simple, fun, unique games. it's a definite win for gamers.

    edit: i just realized i said the exact thing chikahiro94 said....uh...great minds thing alike?

  • chikahiro94

    Posted Sep 21, 2006 9:20 pm PT

    This bodes well for small publishers and niche titles on all platforms. Personally? I think the downloadable games available for each system might end up being more important to me than the ones I buy retail, since the smaller companies will be able to take more risks and still make a profit, or at least break even.

  • 7HR1LL3R

    Posted Sep 21, 2006 8:50 pm PT

    Just wait for XNA Game Studios Express (http://msdn.microsoft.com/directX/xna/gamestudio). Hopefully after people get accustomed to using it, we'll begin to see even more original games on XBLA! Can't wait for that.

  • ninjajuggalo810

    Posted Sep 21, 2006 7:39 pm PT

    i think it was a great idea to have xbla for indies but for microsoft to manage what goes on based on what they think will make them the most money still puts indies out of the loop its sad becuase more indies make games for the games more than what will make the most money so you would see more original games rather than alot of copycats of the games that did well really very sad

  • ocdog45

    Posted Sep 21, 2006 7:36 pm PT

    microsoft is getting it done with its online contents. sony is in for trouble indeed

  • alpha88

    Posted Sep 21, 2006 7:36 pm PT

    thats a huge chunk of change. considering thats just from leaderboards. that right there could fund 2-3 more arcade games. hmm

  • AlmightySeraph

    Posted Sep 21, 2006 7:32 pm PT

    nice little read. but man, $100k-300k to make an XBLA game. i wouldve never thought.

  • dukerav

    Posted Sep 21, 2006 7:29 pm PT

    Well honestly I like the pricing the way it is now, and play before you pay is one of the best things ever to happen in gaming in my opinion.

  • WESLY_SNYPES

    Posted Sep 21, 2006 7:28 pm PT

    Yeah they do need another tier of games on XBLA that are around 100-700MB. If they were able to rework a lot of older games (3rd Strike, Unreal,etc.) LIVE would be an unstoppable monster then...

  • JDO

    Posted Sep 21, 2006 7:25 pm PT

    I also bought Marble Blast, great game and I hope to see more from GarageGames. As for the article he said "the increase in traditional publishers creating games for the service could make it more difficult for independents to get a spot at the table." the key word being COULD, so yes there could be less indies but IMO with the new tools we'll see more indies.

  • nix6six6

    Posted Sep 21, 2006 7:22 pm PT

    i love XBLA - I bought Geometry Wars, Smash TV, Pac Man, and Cloning Clyde

  • SUPRAMAN84

    Posted Sep 21, 2006 7:11 pm PT

    I bought Marbel Blast Ultra the online was really fun. I'm seeing alot of games coming to XBLA, and thats a good thing. Can't wait for the homebrew scene.

  • comthitnuong

    Posted Sep 21, 2006 7:04 pm PT

    i didnt know that many people play those arcade games

  • RedSoxRebel

    Posted Sep 21, 2006 7:01 pm PT

    Dang now why didnt I think of that...pay for the game then pay to play hmmm

  • SilV3RSix

    Posted Sep 21, 2006 7:01 pm PT

    Aren't XBLA games limited to 50MB? Thats approximately $5K per MB. They need a 3rd class of games that cost about $25 bucks and are limited to 500MB or something like that. That way they coul rework some of the more recent 'classics' like Doom, Half Life, etc etc.

  • too_cool_craig

    Posted Sep 21, 2006 6:56 pm PT

    but a game like street fighter, the fastest selling title on XBLA would have made 5 - 10 million of about 300k.

  • Ryvvn

    Posted Sep 21, 2006 6:55 pm PT

    Did any of you read the story or are you just looking at the part where it shows a number representing what GarageGames potentially made? The whole point of the article is that the guy is saying we may see less indie developers on XBLA which is a BAD thing.

  • kindredmachine

    Posted Sep 21, 2006 6:52 pm PT

    That's actually VERY interesting. I work for a media company that deals with the same of stuff but we make DVD and TV documentaries. I had no idea those dumb looking XBLA games cost 100-300k, that's rediculous.

  • Killalot

    Posted Sep 21, 2006 6:51 pm PT

    not bad at all

  • limpbizkit818

    Posted Sep 21, 2006 6:48 pm PT

    Wow they made a lot of money off and arcade game. I hope this makes more devs relized what can be done with XBLA

  • timmy343

    Posted Sep 21, 2006 6:43 pm PT

    mehhh

  • ninjutsuwarrior

    Posted Sep 21, 2006 6:42 pm PT

    Damn...thats a lot...lol

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