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EA Spends 3x More On Marketing Than Development 442

Posted by CmdrTaco
from the hey-i-know-one-of-their-marketroids dept.
G3ckoG33k writes "According to Electronic Arts officer Rich Hilleman, 'the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title.'" Sounds pretty insane, but does anyone know how this compares to the film industry?
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EA Spends 3x on Marketing Than Development

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  • TJ (Score:4, Insightful)

    by Anonymous Coward on Monday August 31, 2009 @09:48AM (#29259803)

    Well maybe if they spent more money on the development they wouldn't need so much money into marketing... *sigh*

    • Re: (Score:3, Funny)

      by rehtonAesoohC (954490)
      Have you heard of EA?

      From their perspective, mission accomplished and money well spent.
      • Re:TJ (Score:5, Informative)

        by MrNaz (730548) * on Monday August 31, 2009 @10:55AM (#29260811) Homepage

        Disgustingly, this is also true of big pharmaceuticals. They spend close to 2:1 marketing to research. Given that marketing cures is not something that you need to do, a sick person will come looking for it, one has to wonder why they need to spend such massive (we're talking billions here) amounts of money on, and why.

        Well, after having spent hours with many pharma reps, the answer seems to be that they promote their brands over generics. Despite the fact that a geneic is chemically identical to a branded drug (once it has come out of its 6 year patent period anyone can copy it), they spend money convincing doctors to keep prescribing their several multiples more expensive drug anyway. Here in Australia, that price is neither paid for by the doctor as the patient gets the script, and the government subsidizes a huge amount of drugs costs under the PBS scheme. So the ridiculous markup ends up coming out of the taxpayers' pockets. Big pharma is marketing their right to collect from general taxes.

        They also spend enormous amounts of their marketing funds on lobbying. Getting your drug listed on the PBS is essentially a free ride on taxpayers, so pharma pays huge amounts of money inviting prominent doctors and other members of the medico-political fraternity to lavish "conferences" in exotic locations, showering them with luxury after luxury. I've been to a few of these events, and the thinly veiled palm greasing in such a socially crucial industry is sickening.

        Marketing is an industry that needs regulation. I don't know how, but there needs to be some way to prevent marketing from deliberately destroying the ability of people to make informed decisions. Yes, yes, caveat emptor and all that. In the real world, not everyone can spend a year researching every decision exhaustively; we need to make decisions with incomplete information, and the marketing industry is designed to ensure that the first information that comes to hand is as misleading as they can get away with.

        And holy cow, what a rant. I originally intended to whine about EA's marketing spending as being the reason we don't get any groundbreaking new games like Syndicate or XCom any more.

        • Re: (Score:3, Insightful)

          by TrippTDF (513419)
          I've also worked in pharma, and I conquer with you.

          The modern world runs on marketing- unfortunately, the internet makes that even more true. Now that anyone has the power to broadcast, you have to spend a lot of money getting our voice heard.
      • Dosnt surprise me. (Score:4, Informative)

        by stfvon007 (632997) <enigmar007.yahoo@com> on Monday August 31, 2009 @10:58AM (#29260887) Journal

        With my experience with the quality and stability of their games, this does not surprise me in the least. I used to work for a cyber cafe. EA games made up about 30% of our titles and 25% of the playtime, but 95% of crashes occurred while an EA game was being played. also many times patches for EA games broke them, A problem we rarely had with non EA titles.

    • Re:TJ (Score:4, Interesting)

      by jerep (794296) on Monday August 31, 2009 @01:31PM (#29263257)

      I agree, EA has to be one of the game companies i dislike the most. Their games have little to no replay value, if any value in the first place. Its obvious they're in it for the money and not the games themselves.

      If you have to spend 3 times the money of development for marketing alone, its a pretty strong sign that you're selling crap and not giving a shit about your customers, all you want is their money.

      The state of our entire entertainments industry today is very sad, everything is more about money than it is about quality.

  • by synthesizerpatel (1210598) on Monday August 31, 2009 @09:49AM (#29259809)

    Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.

    However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.

    If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.

    • by MarkPNeyer (729607) on Monday August 31, 2009 @09:56AM (#29259915)

      Fred Brooks put it best in 'The Mythical Man Month:'

      "...when schedule slippage is recognized, the natural (and traditional) response is to add manpower. Like dousing a fire with gasoline, this makes matters worse, much worse. More fire requires more gasoline, and thus begins a regenerative cycle which ends in disaster."

    • by thisnamestoolong (1584383) on Monday August 31, 2009 @10:03AM (#29259985)
      While this is true -- it seems that a lot of the problems with games today is that they are given excessively tight deadlines to get them out, say, by Christmas. To follow the woman/baby analogy -- it takes more resources for a woman to have a baby gestating in her for 9 months than for 5 months. If you can just get that baby out in 5 months, you could save some resources, but the quality of the product (crappy video game vs. good video game/dead fetus vs. live baby) will differ greatly.
    • Re: (Score:3, Funny)

      by Ukab the Great (87152)

      Using well-tested, modular women who can easily make extensible and interchangeable baby parts, you might be able to add a several women and grow a baby up to 40% faster. Of course, you'd have diminishing returns due to communication overhead once you get past four women.

      • Re: (Score:3, Funny)

        by Haeleth (414428)

        We don't use the word "woman" any more. The term you're looking for is Womb Resources.

    • by click2005 (921437) on Monday August 31, 2009 @10:08AM (#29260063)

      Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.

      In keeping with your baby analogy, you also cant do it alone. Without competent writing, testing and a lot of other people its like trying to give birth all by yourself, your baby will probably be still-born and you end up relying on 'marketing' to con the public into believing it isn'r dead. Spending that much on marketing is like hoping giving the baby a good name makes a difference to how healthy it is.

      However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.

      With enough marketing, you can almost bury bad reviews and lack of plot/gameplay/entertainment under a mountain of bullshit & biased reviews.
      Its all about risk. Why spend $4 million on development of a risky game that might be a massive hit when you can spend $1 million on the game, $3 million on marketing and be fairly sure that it'll make a million or two profit. If the marketing approach fails, its because of piracy obviously.

      If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.

      Sad but true.

      • Re: (Score:3, Interesting)

        by Thaelon (250687)

        Its all about risk. Why spend $4 million on development of a risky game that might be a massive hit when you can spend $1 million on the game, $3 million on marketing and be fairly sure that it'll make a million or two profit. If the marketing approach fails, its because of piracy obviously.

        This is true, and works for quarterly gains.

        Just don't expect long term (5+ year) success out of it.

    • by SailorSpork (1080153) on Monday August 31, 2009 @10:12AM (#29260099) Homepage

      While I agree with your point on "suit monkeys" ruining games by adding in-game marketing to skim off the top, you seem to have entirely missed the point of the post. "Marketing" in it's basic form is simply building awareness for a product so that, if people like it, they can go buy it. Believe it or not, people who are unaware of products may not buy them, and while a few people may follow the likes of /. or IGN and already know everything, that small handful of people isn't going to support a game release. For this reason, marketing activity is very important to let people know that mass-appeal games are out.

      One example where this worked well is the new Batman game. Batman has huge appeal, cost a fortune to make. If you just put it on shelves, only a few people will walk by and pick it up. Millions more non-hardcore-gamer people would love to play a Batman game, but don't always walk by game shelves. With $x million in marketing to drive awareness, they can make $2x-10x million selling that game.

      Game developing is cheap compared to what it costs to buy enough TV airtime to make everyone aware of your product.

    • Re: (Score:3, Insightful)

      by CopaceticOpus (965603)

      Software development is a lot like a having a baby.

      But without all the sex, of course.

    • I remember the stories about Corn Flakes, as in less than 10% of the cost of a box of corn flakes was for the corn.

      In regards to EA and their like, I wonder if its related to accounting similar to Hollywood accounting. Get in lots of subs to spread out expenses which only pad select people's paychecks

    • by Ephemeriis (315124) on Monday August 31, 2009 @10:27AM (#29260325) Homepage

      Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.

      However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.

      If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.

      Makes sense, I suppose... But it is still galling to me as a customer.

      That means that if I spend $40 on a video game only $10 of it actually went to manufacturing the game - the remaining $30 went to marketing.

      Of course... That $10 didn't actually go to manufacturing the game either, because part of it went into DRM and packaging and whatever else...

      So we're looking at maybe $5 or so of my money actually making it back to the folks who genuinely worked on producing my video game.

      Yes, I understand there's lots of expense involved in producing a video game. You need development kits and office space and beta testers and all that good stuff. You can't very well turn out a modern video game in your garage. I get it.

      But it seems kind of self-defeating to me... You aren't making enough money, so you throw in some DRM to stop piracy and do a bunch of marketing to draw in more cash. But you have to pay for the DRM and marketing... So you aren't making enough money to cover your new expenses... So you throw in some more marketing to draw in more cash...

      Somewhere along the line it stops being about producing a game that people enjoy playing and want to buy. Somewhere along the line it starts being about micropayments and subscription fees and sequels and product placement and toys and tie-ins...

      And then the publishers wonder why sales are down.

    • You make a very good point. However, I suspect that many companies fail to realize that over-hyping a product costs you in sales in the long run. Here's how it works:
      Company A has a product that they really want to sell well, they spend massive amounts of money developing a marketing plan with lots of glitzy ads that show all the best features of the product and leave the consumer with the impression that there are lots of other features just as cool that they didn't have time to include (movie and game tr
    • Your software-marketing juxtaposition fails IMO: you need to coordinate marketing just like you have to coordinate programming. Your overly simplistic view of marketing is hindering your reasoning.

      If all of your 'number of suit-monkeys' decide to go to the same magazine, all carrying their own design for the ad, ideas about the target-audience, numbers of the part of the advertising budget that goes to this magazine, you're going have a very ineffective marketing campaign. Just like when you release a can o

    • Re: (Score:3, Interesting)

      by Powys (1274816)
      I noticed something interesting when I worked as a projectionist while in college. I noticed that smart producers who knew they had a really good movie on their hands wouldn't market their movie at all (or very little). Producers who knew they had a crappy movie would market the crap out of it. The biggest example of a good movie's lack of marketing was the 6th Sense. When the movie first came out, we had at best a single movie poster to advertise it's existence. No trailers, no t-shirts, no banners, e
  • by blankinthefill (665181) <blachanc@NosPAM.gmail.com> on Monday August 31, 2009 @09:50AM (#29259817) Journal
    That would certainly be a very good reason that EA doesn't seem to be able to turn out decent games, or turns out games that have little to no polish on them. It also puts into perspective the "rising cost of game production." Probably they are over-marketing it, or marketing it the wrong way and to the wrong people. I've always thought that their TV adds for a lot of games were really wide of the mark, and probably a poor investment.
    • by codeguy007 (179016) on Monday August 31, 2009 @09:55AM (#29259905)

      Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales. You can't say that games like NHL, Madden, MLB The Show aren't quality games. Also EA develops and sells the top selling video game series of all time, the SIMS.

      • Monopoly (Score:5, Insightful)

        by tepples (727027) <{tepples} {at} {gmail.com}> on Monday August 31, 2009 @10:01AM (#29259959) Homepage Journal

        Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales.

        That's because EA has signed exclusive agreements with so many relevant leagues (NCAA, NFL, NHL, FIFA). By definition, the only player in a market will get the best reviews because it gets the only reviews.

      • Well, they did buy out the NFL football market, so there's no competition there. When 2KSports was still working on their football series, it was definitely rivaling Madden. I'm not sure if that counts as marketing dollars though.

        But honestly, you should know better: quality != best selling. There's some correlation, but when there's no competition in some markets because you've bought the exclusive license, your argument is difficult to swallow.

      • I knew someone was going to fire back with the sports games. I will admit that their sports games are the best out there... but that's for two reasons. 1. Lack of competition. There just aren't other developers out there that are making the effort to turn out a first rate sports game any more. Every now and again someone will pop up, turn something out for a year or two, and then they're done. 2. Their sports games are very static. What I mean is that each release (especially in the last few years,
    • Re: (Score:2, Insightful)

      by mcatrage (1274730)
      That was true about EA but lately (not including sports) they've been making some good games and taking some chances. Mirrors Edge and skate are two great games which I think were risks that the EA of old never would have taken.
  • While marketing is definitely important, is it really necessary to spend 3 times your development costs? Do they spend that kind of money on annual titles like Madden, MLB, NHL, etc? Or just when they are new like TOR, Sims 3, Spore?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      In this thread we get to read over and over how Slashdotters would run a gaming company, if they ran a gaming company.

      Putting a headline like this on a web site like this is a guaranteed flamebait page impression generator. With a readership composed of mostly help desk employees who program in their spare time and aspire to be engineers the natural jealosy of more socially adept types, like marketing people, can be easily manipulated. Point out that the most comercially successful game company in the world

      • Re: (Score:2, Funny)

        by Gizzmonic (412910)

        I managed the business end of a Snoopy snow cone push cart once, and let me tell you...it was like Hell on Earth. I'd never wish that upon anyone. Never.

      • by SerpentMage (13390) <ChristianHGross@yah o o .ca> on Monday August 31, 2009 @10:24AM (#29260251)

        The problem with this scenario is that marketing helps in the initial, but it does not help in the long term...

        Marketing can make caviar from crap. Seriously they can. BUT if EA keeps producing crap people will realize it is not caviar, but crap. Then to make it caviar again you need more marketing. It is a never ending race.

        Had they not made crap in the first place then they would not have to spend that much on marketing.

        While marketing is needed, the best marketing is when people tell other people that they should buy the product.

        Here is an example; Heinz Ketchup. I have lived throughout Europe, and North America, and there is no way I will buy anything but Heinz Ketchup. Yes they have a marketing campaign, but Heinz does do a pretty good job making ketchup. They don't take their clientel for granted. With marketing Heinz could expand. Another example; nutella, Coke, Pepsi, etc...

        • by eln (21727) on Monday August 31, 2009 @10:44AM (#29260621) Homepage
          Marketing is not just needed to polish turds, it's needed to get people to buy the good stuff too. In video games, or most other markets, there's a ton of competition. Without marketing, your product gets buried under the pile and no one ever sees it. Sure, you might sell a few copies to your friends, and they might get a couple of their friends to buy it, but that's it. Maybe if you're really really lucky it will go viral, but you're not going to spend tens of millions of dollars developing a game and just hope it will go viral on its own.

          Marketing is more than just booth babes and TV commercials. Something as simple as where a product is on the shelf (eye level versus toward the ground, for example), or where your displays are in the store (in the back? at the entrance? How big are they?) is marketing, and it all costs money to do. The news doing a story on lines stretching out the door for the newest game release was probably prompted by a call from marketing. Tech news sites and TV shows featuring documentaries or segments about the "breakthrough" technology your game uses are all part of the marketing effort. Hell, even the guy behind the counter telling you it's a good game (or even the other "shopper" mentioning it in passing) may well be part of the marketing machine.

          To claim that your household brands, especially Coke or Pepsi, get by without marketing is silly. Yes, Heinz may not spend as much on visible marketing, but they do pay for prime shelf space at your local store, and they've spent decades honing their image as a superior brand. None of that happened by accident, it was all marketing. The fact that you may not even realize you were being marketed to, and yet still have a preference for their brand, is part of what makes their campaigns so brilliant. Even word of mouth advertising can be primed by a good marketing department. And, of course, both Coke and Pepsi spend ungodly amounts of money making sure their logos are plastered all over just about everything you see. Coca Cola alone spends more than $1 billion annually on marketing.

          A lot of people make the mistake of equating marketing with advertising, and in reality it's much, much more than that.
          • Re: (Score:3, Interesting)

            by apoc.famine (621563)

            The issue is that the amount of money you spend on marketing vs the effectiveness is likely to take the vague shape of a bell curve. I think part of what the GP is saying is that some brands have moved to that peak in marketing vs effectiveness, and realize that spending the 50% extra on marketing is pointless.

            Continuing to throw money at marketing just because your sales are low doesn't mean you'll make more sales. If you're already at that peak, due to the economy, market saturation, the quality

        • Re: (Score:3, Informative)

          by Hatta (162192) *

          Here is an example; Heinz Ketchup. I have lived throughout Europe, and North America, and there is no way I will buy anything but Heinz Ketchup. Yes they have a marketing campaign, but Heinz does do a pretty good job making ketchup

          Please. Ketchup is ketchup. Anyone can make ketchup. You can even make ketchup in your own kitchen. The only reason you perceive Heinz as being better than other ketchup is marketing. Much the same way a plastic bottle with a nice label can make you perceive tap water as gourme

      • by PainKilleR-CE (597083) on Monday August 31, 2009 @10:27AM (#29260301)

        EA has been closing up shops left and right, just like most other large publishers (though really there aren't many large publishers these days, it's basically EA and Blizzard/Activision for PC games).

        I think the main issue is that EA specifically, and the industry in general, has spent a lot of time in the last decade complaining about the rising costs of producing games, especially in the console and PC realms, yet EA is willing to spend 3x their development budget on marketing, the cost of which is pretty well within their control.

        Of course, EA is also one of the companies that does pretty well controlling their development costs for their biggest selling games. They have a very limited time frame for development of their sports titles, and they do a fair job of deciding what improvements they can make year-to-year to still meet the time constraints and still keep most of their user base happy. They also figured out that it was worth more money to them to buy exclusive contracts with the leagues and player unions than to attempt to continue competing with other publishers and developers to make a better game in those time constraints.

    • I'd imagine the marketing dollars for Madden is probably about 10x the development costs, if not more, but the money spent on The Old Republic will be less or even the aggregated development costs over its life.

  • by Framboise (521772) on Monday August 31, 2009 @09:51AM (#29259839)

    Often one heards that research costs drive the price of drugs high, but in fact a similar ratio between marketting and research costs exists in the drug industry.

    • Re: (Score:3, Insightful)

      by Ma8thew (861741)
      Source please? I think you would be astonished [healthaffairs.org] by the cost of developing a new drug. Also bear in mind that drugs are only marketed strongly in the US. Most countries do not allow prescription drugs to be advertised to consumers.
      • by perrin (891) on Monday August 31, 2009 @10:24AM (#29260259)

        That number for drug R&D costs is described by some commentators as "9-digit fairy tale" (source article http://www.cmaj.ca/cgi/content/full/180/3/279 [www.cmaj.ca]). It is true that you cannot market directly to consumers in many countries, the industry can and do market to doctors. Although the doctors are relatively few in numbers, the pandering they receive is far more expensive.

      • Here's a source. [mckinsey.com] You have to log in to see the full report, but if you click on the interactive graphic there's a section on drugs. Bottom line is that drugs in the U.S. cost 50-70% more than in other nations of similar wealth. Now why is that? We're certainly not subsidizing the drugs for those other wealthy countries like we do for for the third world.

        It's a similar thing with health care in general, insurance companies are paying more and more administrative costs which are going to finding excuse
      • by Zerth (26112) on Monday August 31, 2009 @10:41AM (#29260565) Homepage

        3x does seem a bit high.

        Since I just cleaned out about 300 viagra spams, let's look at Pfizer's most recent 10-Q? [edgar-online.com]

        In the last 3 months, they spent $3.35 billion on marketing(which doesn't include things like writing fake articles for medical journals and letting people know about off-label uses, but I'll let that slide if you'll give me "administration expenses"), and spent $1.695 billion on R&D.

        That's about 1.97 times the $$ on convincing people to buy their drugs than they do finding new drugs.

      • by pavon (30274) on Monday August 31, 2009 @10:50AM (#29260721)

        One thing that someone in the biomedical industry told me is that the path that drug research usually takes is that a Phd candidate will do basic research at the university, carry this research with them to a small startup company, which is then acquired by a big pharmaceutical if one of their drugs looks promising, who then goes thought the FDA testing process and gets the drug to market.

        According to her these marketing/research numbers that get thrown around don't include the costs of acquiring start-ups. Since it is pretty much impossible for a small company to afford to get a drug through the FDA approval process, their entire business model is to sell-up to the big phamaceuticals, either the entire company or individual drug patents. Therefore, this aquisition / patent license money funds an awful lot of research that doesn't get counted in the numbers.

        And it seems to me that this system works fairly well - the university / small lab environment is really more conducive to basic research than a large company who is focused on getting products to market. And in this case, the patent system helps provide a business model for these research labs that wouldn't exist otherwise.

        Thanks for the folks that posted those sources, I'll have to check them out in detail later on, and see if they confim/refute what I've heard.

        • by LanMan04 (790429) on Monday August 31, 2009 @01:15PM (#29263045)

          One thing that someone in the biomedical industry told me is that the path that drug research usually takes is that a Phd candidate will do basic research at the university, carry this research with them to a small startup company, which is then acquired by a big pharmaceutical if one of their drugs looks promising, who then goes thought the FDA testing process and gets the drug to market.

          According to her these marketing/research numbers that get thrown around don't include the costs of acquiring start-ups. Since it is pretty much impossible for a small company to afford to get a drug through the FDA approval process, their entire business model is to sell-up to the big phamaceuticals, either the entire company or individual drug patents. Therefore, this aquisition / patent license money funds an awful lot of research that doesn't get counted in the numbers.

          So big drug companies are the RIAAs of the drug world: They don't actually create anything useful, they just exploit it for huge profit. Awesome.

    • Re: (Score:3, Insightful)

      by limaxray (1292094)
      But you're ignoring the costs of gaining approval to actually sell a drug in a given country. In the US, gaining FDA approval on a new drug easily costs an order of magnitude more than research and marketing combined. The level of regulation and oversight of every tiny detail of the whole process is incredible and this adds significant cost. Your safety is the main reason why drugs are so expensive, not research or marketing.
  • All it takes is marketing to sell the same game repackaged with a new player on the cover every year.
  • I believe Kevin Smith said in one of his Evening talks that to many movies the cinema more or less functions as advertisement for DVD sales.

    • by sanosuke001 (640243) on Monday August 31, 2009 @10:02AM (#29259977)
      He also said that a lot of his movies tank in the theaters and then do really well on DVD. People see the movie in theaters and then tell their friends to grab the DVD. That's why the Weinsteins let him make "his" movies without a lot of oversight. He makes enough money so nobody loses anything which keeps them happy.

      However, it could go the other way. Everyone sees your movie/game/etc and they tell their friends it sucked. Nobody buys the DVD. I feel about the same with marketing. If your commercial looks like shit and I see it over and over, I am less inclined to buy your game/movie/etc. Even if I were thinking about it (fan of IP or whatnot) but am spammed with ads, I'll not buy it out of spite. Which is to say, too much marketing can hurt in my opinion.
      • But then they sell to various overseas markets (TV and theatrical), to airlines who don't care what they are showing, to online markets, etc etc etc. Even sucky movies make their money back most of the time.

        • Re: (Score:2, Insightful)

          by ThisIsForReal (897233)
          While there are a lot of not so obvious revenue streams for smaller movies, it is not necessarily true that they turn in the black. Hollywood execs are businesspeople looking for profit and so they naturally want the blockbusters, but most of their human capital likes to consider themselves artists. Many of the good movies we see from major studios (I'm not talking about the arthouse movies) - those sleepers that fall under the radar but are very good (e.g. Shawshank Redemption, L.A. Confidential, etc.)
          • I think you will find that will most movies, it isn't if the movie will make money but how quickly. (I am sure some big budget blunders for example may never make a profit.) Most Movie success is measured on the domestic numbers. If you don't turn a profit before counting the overseas and dvd sales, you're a failure.

  • ... many modern games are mediocre Sometimes I wish they need to lay off the marketing and pour that money into the game and giving devs more time to work on it.

  • I'm not surprised that marketing is a very large percentage of their total expenses, but three times higher sounds suspicious. Maybe their marketing expenses grew three times faster than development costs? Or maybe they look at not just a single title... It's really impossible to tell only by that joke of an article.

  • Hmm... (Score:5, Insightful)

    by Volda (1113105) on Monday August 31, 2009 @09:55AM (#29259907)
    Maybe if they would make better games they wouldnt have to spend so much on advertising.
    • by clickety6 (141178)

      Well, obviously it takes a lot more work to make a turd look shiny and polished than it does to produce a turd...

    • Re: (Score:3, Insightful)

      by Minwee (522556)

      Maybe if they would make better games they wouldnt have to spend so much on advertising.

      Good thinking. Just like how Amiga put their effort into making a better computer than Apple, so today nobody has ever heard of a 'Macintosh'.

    • Re:Hmm... (Score:5, Interesting)

      by jparker (105202) on Monday August 31, 2009 @11:05AM (#29260981) Homepage

      I've been working in games for 10 years, and I really, *really* wish I could agree with you.

      Did you know that it's only been in the last few years that review scores and sales started to correlate? Until recently, there was virtually no connection between the review scores of your game and how well it sold, and it's still somewhat tenuous.
      (see http://games.venturebeat.com/2009/05/29/does-game-quality-translate-into-better-financial-performance/ [venturebeat.com] and http://www.dreamdawn.com/sh/features/sales_vs_score.php [dreamdawn.com] for some backup on that.)

      If I could show you a graph of marketing budget vs sales, you'd see that the correlation is much stronger. Making a great game doesn't immediately make people aware of it, and the public isn't the most sophisticated video game consumer.

      Remember Daikatana? (http://en.wikipedia.org/wiki/Daikatana (I can't believe I'm posting a wp link in case people on Slashdot don't know what Daikatana is. No one click that.)) It was famous for being over-hyped and a total mess. It looked good once, but by launch anyone who knew about games knew that it would not be good. And it was still a top-10 seller for 3 months on the back of name recognition. Because the majority of game buyers don't know much about games (just like most industries). People had heard of the game, and they forgot that what they heard was a joke, so they bought it. Oh yeah, it had a big marketing budget too...

      The reality is, sales (and therefore income) are better correlated to investment in advertising than the game itself. That pains me (as a game designer) deeply, but it's true. Things like this article used to peg my rage meter, but there's no point in getting upset at EA for realizing the way the market works.

      Luckily, that's changing. The market is becoming more savvy, and quality is finally becoming important to publishers. I'm not spilling inside secrets when I say that WB is very excited about the high quality of Arkham Asylum. They knew it would be good, but you can never be sure that a game will be great, and their faces light up whenever they talk about it. It's very encouraging to me to see executives this excited about quality; that's new.

      It's now common to hear people say things like "They're an 80+ developer" or "We're targetting 85+", which is also really encouraging. People used to talk about making good games, but now it's important that you be able to clearly establish that. It used to be only sales that mattered, but now people are more willing to accept that if you make quality games, the sales will come. That's huge, and you can expect to see it shift more resources from marketing to production, where they belong.

      • Re: (Score:3, Insightful)

        by hibiki_r (649814)

        Your main point is valid: The best selling games are typically the most advertised. However, you are missing one more piece to the argument: There's plenty of great games that, no matter how much money you sink on advertising them, could never be huge sellers.

        Marketing can't do miracles: It sure can make up for bad quality, but what it can't do is make an unpopular premise work. Would 30 million worth of advertising make Hearts of Iron III sell 3 million copies in the US, regardless of its quality? There's

  • I think the "duh" classification needs to be added to this.

    As if we couldn't tell where the money was being spent; definitely not in development.

    Why do you think the games are so disappointing after seeing those shiny, 3D, live action commercials? "Actual game play may vary."
    Let me guess. Their second largest expenditure is for the legal team: assimilating new development talent, buying out competition, defending against false advertising.

  • I can't get to the article, but what do those numbers mean? Is that a yearly average across all games, or for certain games? The words 'up to' always raise a flag with me as it often applies the worst case across a broad range. For example, it wouldn't surprise me if Madden 09 (is that ea, if not its equivalent?) fits this case. Much of the development is carry over from previous years, however its major bucks to advertise for your target audience during NFL games. This pretty much applies to all their spor
  • by rotide (1015173) on Monday August 31, 2009 @10:02AM (#29259971)
    And if they reversed their expenses and spent that huge gob of marketing money on the actual game development, they could have games that are awesome and would potentially sell themselves.

    Seems to me, the best products don't need advertising. The ones that don't sell themselves need others to run around selling them instead.

  • To sell a turd, you need a lot of gold plating or people will smell and see that it's a turd. And gold plating ain't cheap.

  • Otherwise they wouldn't be -THE- largest game developer out there in North America. If you haven't heard of EA, you either never left Nintendo, or live without video games.

    If they were doing things wrong, they wouldn't be doing so well.

    In my eyes, its not that they should cut back from marketting, but spend more on developing! I'd be more inclined to jump into game development commercially if they got paid more decently.

  • Take a look at the annual reports of some big drug companies and you'll find they spend more on marketing (we need to keep the prices high to support R&D...) than they do on actual R&D.

  • If you make a good game, they will come..

  • by Anonymous Coward

    In 2006, the average studio movie cost $65.8M to produce:

    http://www.cinematical.com/2007/03/08/mpaa-in-2006-an-average-movie-cost-65-8m-to-produce/

    In 2007, the average studio movie spent $36M on marketing:

    http://articles.latimes.com/2009/apr/20/business/fi-ct-movies20?pg=1

  • Imagine if they spent that cash on development instead?

    gamers don't need TV commercials.

    Madden and other crap franchises are the bulk of the ad budget.

  • Is this the reason that new games cost $60 or more? Without the marketing costs, new games could cost a more reasonable $15-20. This would encourage people like me to buy new games rather than waiting to buy them used.

    Perhaps the trouble is that there is nothing to keep marketing expenses in check. A large bag of store-brand, non-advertised charcoal might cost $15. Kingston brand charcoal might cost $20, with much of that extra cost due to advertising. If Kingston decided to spend another $40 per bag on adv

  • by ledow (319597)

    Let's do the maths (Yes, there's IS an 's' in it)

    makes $35 on a $60 video game
    needs to sell 1.1 million copes to break even
    new games have just six weeks to sell.

    So you make $38.5m in order to break even for ONE game, and you do that in six weeks. But marketing costs "up to three times more than the development" so that would mean that, say, development *definitely* costs less than $9.6m and marketing, say, $28.8m roughly (if you were to assume they were the only expenses).

    So after investing let's say $5m o

  • by H4x0r Jim Duggan (757476) on Monday August 31, 2009 @10:27AM (#29260323) Homepage Journal

    Q: Why are games so expensive?

    A: Because it costs us that much to convince you you want to buy it.

  • As a consumer society, we've evolved to be more responsive to advertising/marketing than actually good products/services. That's why our society has become so (over)saturated with advertising. You may design the best product in the world, but if you don't market it correctly, and no one knows about, then it doesn't really exist. Though the internet has begun changing that through the proliferation of viral marketing—and I don't mean the marketing gimmicks created by hipster "new media" advertising age

  • by Edgewize (262271) on Monday August 31, 2009 @12:37PM (#29262473)

    Everyone wishing that the money were spent on development instead of marketing is, unfortunately, living in an ideal fantasy world.

    People are dumb. They follow trends, soak up advertisements, and generally do what marketers tell them to do. You personally might be immune, but remember that just by reading Slashdot (and therefore being somewhat tech-savvy) you have already self-selected against most of the population.

    In modern culture, quality does not correlate with success. (Arguably, in entertainment, it never has... consider ticket sales for generic romantic comedies with famous actors vs thought-provoking art-house films.) Quantity is much stronger than quality. Exposure is all that matters.

    Nobody bothers to do independent research anymore; Consumer Reports has been dropped in favor of Google search, and whoever has the most hits wins.

    Welcome to the present day.

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