There’s been no shortage of conversation online in recent years about game revenue — new monetization models, rising prices, season passes, microtransactions, the economics of live service. What’s talked about considerably less is the other side of that equation: what it actually costs to make a game in the first place. Most publishers stay quiet about this, which is understandable, but it means players rarely have a clear picture of the math involved. So let’s do a simplified version of it together.
Everything that follows is hypothetical and deliberately broad. Real game budgets are messier, more variable, and almost always confidential. But the broad strokes are instructive.
The Studio
Let’s start with a hypothetical new game studio working on a hypothetical game. For simplicity, we’re going to focus on one cost and one cost only: the developers themselves. No equipment, no software licenses, no office space — just the people making the game.
Our studio has 100 developers. We’ll give each of them a salary of $75,000 a year — modest by industry standards in some markets, generous in others, but a reasonable middle ground for this exercise.
That gives us an annual overhead of $7.5 million. For every year this game is in development, the studio is spending $7.5 million before a single line of code ships.
The Revenue
Now let’s look at the other side. The game sells for $60 — a standard price point for a full release. No microtransactions, no season pass, no ongoing server costs. A complete game sold as a complete package.
Here’s the first reality check: the studio doesn’t see that $60. Platforms take a cut. Steam, for instance, takes 30% of every sale. There are other per-unit costs that reduce that number further, but for simplicity let’s just account for the platform cut and round down slightly for easier math. The studio receives $40 per copy sold.
The Math
So. One hundred developers, $75,000 each, one year of development. Total cost: $7.5 million.
At $40 per unit, the studio needs to sell 187,500 copies just to break even.
That might not sound like a lot — and in the context of a hit game, it isn’t. But breaking even doesn’t keep the lights on. The studio still has employees who need to be paid after the game ships, infrastructure to maintain, and the next project to start developing. Realistically the studio needs to sell at least double the break-even number to remain financially solvent.
That’s 375,000 copies. At full price. Before a single discount, sale, or bundle.
Enter The Publisher
375,000 units is not a small number, and reaching it requires players to actually know the game exists. Marketing costs money. Localization — translating the game into other languages to reach a broader audience — costs money. Sometimes studios partner with a publisher specifically to cover these costs, in exchange for a share of the revenue.
Publisher deals vary enormously. A generous split might be 20% to the publisher, 80% to the studio. A less generous one might flip that entirely. For our experiment let’s say it’s 50/50 — not unusual in practice.
Now the studio receives $20 per unit instead of $40. Which means that 375,000 unit target just became 750,000.
Three quarters of a million copies, at full price, before the studio breaks even and has enough runway to keep going. The publisher’s marketing and resources should help reach that number — but it reframes what “success” actually means in a meaningful way.
What This Doesn’t Cover
This exercise barely scratches the surface. It assumes a twelve month development cycle, which almost no real game ships in. It ignores engine licensing fees, mo-cap sessions, voice recording, QA, certification costs, and the long tail of post-launch support. It assumes every copy sells at full price, which they don’t — sales, bundles, and regional pricing all reduce that per-unit number over time.
The point isn’t precision. The point is that the gap between “a game sold well” and “a studio made money” is wider than most players realize — and the gap between “a studio made money” and “a studio thrives” is wider still. The next time a developer talks about needing a game to sell a certain number of copies to greenlight a sequel, or a studio announces layoffs despite a release that seemed successful from the outside, this is the math underneath it.
Games are expensive to make. The ones that make it look easy are usually the ones that have figured out how to hide just how hard it is.