They no longer have to make and ship cartridges to distribute them. They just let you download said game. The margins are insanely large. Add in they not longer subsidize consoles and release a new one every few years... yea. also the technology isn't improving that much as we have reached a pretty big limit on screen size etc. No more big innovation to make graphics look perfect- it is just art style now and most of the games reuse what works.
The hardware margins are insanely large, but how can you calculate the software costs? Software engineers aint cheap. Iām not defending Iām just understanding that its not free to sell video games. Iām not buying an 80$ game.
80$ likely pays for around an hour of one engineers time, if that
I swear Iām not trying to justify this but youre not making a great argument, i can understand 1 million man-hours: building the game engine for a new console, building an expansive video game, polishing it, debugging and playtesting, marketing. I can see it. Nintendo doesnt release unfinished video games.
They do. Looked it up for the discussions around this topic. Odyssey was around 50-100mil budget. The Switch Zeldas were apparently 100-150mil. Miyamoto once said, they'd need to sell at least 2mil copies to even make it out the red (x60-70$) with BotW. And that money needs to be spent before a single copy gets sold. Generally, we're talking $15'000 a month per developer on your staff + marketing + admin etc.
Two million sales are still at indie range nowadays, AAA games get multiple times more than that, AC Odyssey sold 14 million and it wasn't that big of a hit.
Odyssey sold 14 million and it wasn't that big of a hit.
Super Mario Odyssey 29 million
That doesn't make sense, which one is it? My point was, that by his statement, we can estimate what the general ballpark of development cost was for those games, despite Nintendo being very secretive about their development cost in general. Didn't try to say anything about successfulness
we can estimate what the general ballpark of development cost was for those games, despite Nintendo being very secretive about their development cost in general.
It is nowhere near the profit they make, my man, they made 1.7 BILLIONS from Super Mario Odyssey alone, that's 10x what Cyberpunk 2077 cost to develop; there's a reason they have been having record profits for years now.
I think you're a bit lost... I'm not entirely sure why you brought AC Odyssey into this discussion in the first place, when I was clearly talking about Super Mario Odyssey (didn't think I need to specify that in a discussion about Switch games) nor is anyone talking about profits. This is literally just about how much development costs and how much development cost rose. I know how much money the Switch games made... I didn't even mention the word profits once.
Unity, development engines specific to the consoles etc. They no longer have to build from the ground up when a handful of companies rent out their well built engines that make development way cheaper. Less employees needed. Way less expensive employees needed.
You know what, I always thought Nintendo owned their own game engine.
I know developers can make cross-platform games with certain game engines. But I'm pretty naive, so I assumed for some reason that the console owners didn't, since they knew more about the hardware.
Of course, it started that way. But better tools have come out.
I am sure Nintendo makes their own, as do the other consoles because they get to license them out. But for most AAA game development? usually not anymore.
Companies like Epic don't rent out their engines for free. They're trading a higher up-front cost and risk that they can't get the engine built properly for a percentage of their revenue. The more successful the game is, the less they save by licencing an engine. To the point where a lot of big AAA releases lose money overall (which is why they make their own engines still).
When you compare the size of Nintendo's team of roughly 7 thousand employees to other company's that argument evaporates quite quickly. In what world does a software engineer make $80 USD an hour?
Thatās about $160k a year. Not familiar with the Japanese dev market, but in the US, Entry level engineers are generally pulling in $100k($50 an hour).
Not make, costs. There are other costs per employee than salary. Taxes, insurance, equipment etc. And $80 / hr is ~160k per year. Which isn't insanely high for a SE in US at least. $80 probably doesn't get close to paying for an hour of an engineer's time tbh
Thats a fairly standard base rate for 5-7 year experience software engineer in a non-outsourced position. Count insurance, management, HR, bonus/stock and the number is higher
I really want to see what "margin" you are specifically thinking of.
AAA game dev is one of the highest risk industries in the world. Games generate losses constantly. 2023 and 24 saw about 50'000 layoffs across the industry. With 1500 more in 2025.
One of the biggest game publishers in the world is on the brink of shuttering.
So please, be specific. What margins?
Edit: Go figure, the person I responded to mentioned nothing about "margins" and instead claimed "We have better tools, AI and Unreal Engine so games are easy and cheap to make now". What a fucking moron.
Mario Kart World is absolutely not a high risk release.
Mario Kart 8 made about 3 billion dollars on an estimated 100 million dollar budget.
Following your logic Mario Kart World should cost less than the average game, when it's actually more expensive than a riskier game they're releasing (Donkey Kong Banaza). The most recent Mario Kart (Tour) was also free to play.
Wouldn't it be sensible to put the higher price on the sure thing than on the game that seems far riskier? People WILL pay for Mario Kart. They won't pay a higher price for a 3D Donkey Kong.
For people who want it but can't afford or aren't willing to pay the higher price, it is bad. For Nintendo itself, they'll sell fewer copies because of the higher price, but they're likely guessing that they'll maximize profits at the new higher price point despite the decrease in demand.
The reality is that games should be over $100 based on inflation. People should be happy they kept them at the same price for as long as they did. Almost all other products have gone up and up since the 90s.
Microsoft and Sony's gaming divisions are among their smallest, and Nintendo's valuation is so low that Microsoft wanted to acquire them before buying Activision.
Which shows you how small the biggest games companies are.
AAA game dev is one of the highest risk industries in the world
Do you have a source for that?
The fact that some businesses make poor decisions is not a reflection of an industry. It doesn't make the industry "high risk" if they are bad at doing business.
The companies which take record profits are doing layoffs no less than companies which sabotaged their bottom line with poor investments.
It was hyperbolic, but financially, games are extremely high risk investments. Single person indie games have generated billions, while $200m+ studio productions have generated peanuts.
2023 and 24 saw about 50'000 layoffs across the industry. With 1500 more in 2025.
Corporations are just as likely to lay people off when they're making record profits. The more executives and shareholders are involved, the more likely that a major layoff will happen. Board of directors need their new yachts.
Watched it happen at companies like Blizzard for decades now. They'd hit a new record for revenue and still lay off hundreds of people from dev teams and customer service.
EDIT: Search the internet for something like blizzard record profit layoffs. You will see a VARIETY of articles from the 2010s and 2020s talking about each of the years where Blizz hit new records for profit and profit margins, and still laid off hundreds of people at a time.
Yes there were you dumbass, layoff happened because ceos during the pandemic thought that the gaming/streaming boom would last forever, so they recruted a shit ton of people that are now costing them since gaming has regressed to usual levels of play, Multiple Gaming companies have recorded their best financial year of all-time last year. Youāre an idiot if you really think that
Nintendo doesnt reveal their development costs but their most expensive is breath of the wild, estimated to have cost 60-70 million USD
It sold 32 million units so at ~ 3$ per game they'd make money of a digital copy. There are obv some more costs like servers and a cut when sold through other stores and such but at 60 USD they obv made a shit ton of profits
Their other games mostly cost way less to make (e.g. mario kart, pokemon etc) while selling 67 million and 26 million respectively
The layoffs happened regardless of how much money the companies made, some of them had record profits, the main issue is the unpredictability of how successful a game will be, thats not an issue with Nintendos top franchises though
No. Because it sounds like he's only ever been an employee.
That said, the person he's replying to is also completely wrong. It's a very high risk industry. But it's also a huge spread and can easily have wide margins. So much dev cost gets flushed away with incompetent management and budgeting, and trying to tie that to margins and risk is silly.
It depends, as it always does, with the studio, its circumstances, and its funding methods. But to apply that to Nintendo here is nonsense. Nintendo isn't upping the price to the mean due to inflation. It's leading the mean simply because it can.
This inflation argument is interesting. If they donāt raise prices they are effectively lowering prices. Seems very strange to not consider inflation.
I don't really think anything Nintendo puts out is going to be a High Risk. They're able to coast on their name recognition at this point.
Look at Pokemon (not MADE by Nintendo, but made FOR Nintendo), they ship absolute trash and people freak out and buy all 7 editions to get every pokemon
Giving short confident answers without backing it up at all while the person youāre arguing with brought in actual points is not going to get you taken seriously.
Points aren't evidence. Give sources. I just looked up top 10 riskiest industries. Didn't see video game production in there. Source your "points" with facts. Not opinions or data that is not provided in context.
The burden of proof is on the person who made the "point". FYI.
And any time you drop a discerning opinion the burden of proof goes to you. If the OP made an incorrect point, actually disprove it instead of just saying āno youā and walking away as if you added absolutely anything to the conversation.
Liabilities to asset ratios is not a great metric for this. Plenty of very stable industries are run based on debt financing. It's very normal for businesses.
From this article in 2022, which references the US Bureau of Labor Statistics, "Arts, Entertainment, & Recreation" is one of the "lowest survival rates" for businesses in their first year, and is the #8 overall "Most Risky Industry to Start a New Business."
Now you can focus on how the article talks about new businesses, but it does give 5-year survival rates as well. And as folks familiar with the gaming industry know, even a well-established brand can only carry itself so far and isn't immune to failure.
What percent of Arts, Entertainment, and Recreation is Video Game Production?
And yes, you're correct. The fact you cite is "first-year". The point made was about AAA games.
That is not first year.
Further, this whole discussion is about Nintendo. I don't think AAA games or Nintendo are related to what's stated in that article in any way. Precise facts in context are necessary to support the original comment. They don't exist though because it's not accurate.
Not sure the breakdown of Arts & Entertainment into video games but it is part of that category so regardless it's still a top-10 risky business.
And yeah my whole second comment was meant to explain that the risk can be extrapolated even to well-developed brands, because we've seen well-developed brands fail. Being Nintendo doesn't mean they're immune to the high risk of the industry. AAA games are still risky and fail often, especially in 2025 where the market is incredibly saturated and people can afford to be more critical because there are more alternatives.
Losses due to better tools making game development easier. It wasn't unique to the gaming sector- everywhere the tech industry experienced layoffs. Things are getting better automated. Nintendo for 100% sure isn't struggling when even their bad games sell so well.
Edit: Lol guy posted and blocked, somehow thinks software development is a continuous process of reinventing the wheel. Libraries get more features, tools are made to make things easier. Whether a company reinvests that time into adding new features is up to the company, but things are getting more and more automated. Software engineers check google before creating something from the ground up.
better automated. Nintendo for 100% sure isn't struggling when even their bad games sell so well.
Yes, because they are a low risk company that strives on giving you a product you will enjoy. That's the reason why the switch beat the other consoles. Becuase if you like Nintendo games you know for sure you'll get a product you're happy with.
Whether a company reinvests that time into adding new features is up to the company, but things are getting more and more automated. Software engineers check google before creating something from the ground up.
You mean like Unreal engine going from 1-5? So, yes, they are reinventing the wheel. You're so wrong on so many accounts that I don't understand how you think you're even remotely correct.
You mean the ease of importing and texture mapping from blender that newer unreal engines use isn't substantive on its own? Not to mention way better lighting tools. UE5 is easy to use.
You mean having to recreate an engine? Are you literally saying that's not reinventing the wheel? Becuase that's quite LITERALLY reinventing the wheel.
Also if it was SOOOOOOOOO EASY to just import from unreal engine 4 to 5 why has almost literally every company not done exactly that?
There are a handful of engines- you rarely have studios building things from the ground up. Now if you are asking why there are multiple engines? Licensing and costs. They rent out their engines so game developers don't have to spend all that time and money. Not sure what you are trying to imply here. It saves a ton on labor and does a lot of the job for the developers. Better tools = less work. No need for every game studio to develop their own.
I'm sorry, are you suggesting that nintendo is not building their own engines? lmao.
Better tools might mean less work but the artistic quality goes up. The size of the game goes up. You're not seriously suggesting that games are the same quality and effort as they were in the 90s right?
You clearly dont' have a full time job because any sane adult would know that more better tools= more work because you're more efficient now. It doesn't suddenly mean you have less work lmao.
Creating excel didn't miraculously stop the millions of work needed for human computers. It just let people do MORE work in the same amount of time.
Like do you not understand a single thing in this world or what?
Nintendo is one of the few companies that does as they own the licensing rights for console development and they license it out. They are printing money. All the consoles are.
"Creating excel didn't miraculously stop the millions of work needed for human computers. It just let people do MORE work in the same amount of time."
Better tools lead to less work for the same time/work done. You can always reinvest the time saved to do more. Automated tools doesn't mean every thing in the world is automated, so not where you got that. Size of games doesn't always go up, most developers aim for 40 hours played. What they choose to reinvest their saved time and money into or to funnel it into profits is up to the company.
Someone doesn't know about flat vs variable costs too. š
Game development is not easier, and definitely not automated in the slightest.
In fact, methodology has only become harder over the last decade. Every new AI or procedural tool baked into programs like Painter3D, Houdini or Zbrush is half useful on implementation, and you have to learn 5 new optimization techniques to stay ahead.
Please take your head out your ass and clean the shit out of your eyes.
Not easier... sure thats why they rent game engines. Totally not to save costs and totally not convenient to have people trained from one project to the next with minimized learning curve. Totally useless features that would be faster and easier to make by hand or after developing an engine to then do the same thing.
As someone with unreal training if anything it makes game dev harder for most projects because it's so bloated. One of the biggest issues with modern unreal games is optimization, because the engine insists on using super processor heavy tools for things like lighting and doesn't let you turn individual features off. It's either you leave everything enabled or disabled with little wiggle room in-between.
around fifteen to twenty people worked on Mario Kart 64, and adjusted to inflation it would cost right around $80 in todays money... how many people do you think worked on mario kart world?
"Don't worry guys, we're having more garbage slop made by AI to ensure that our little treats remain the same price they've been for the last 15-20 years!"
Hooray. The quality degrades because that 60$ means less than it did two decades ago, but you'll all complain about that too.
Ya'll really want the whole cake and want to devour it too.
Welcome to life under capitalism; it's time the market corrects itself.
Nobody is tying your hands and forcing you to buy nintendo, or any other 80 dollar game, or anything at all. You have the mythical power of your wallet, bud.
I'm pretty sure this is because developers are constantly pushing half baked ideas through to market, and consumers are getting tired of buying AAA slop
There are considerably more critically acclaimed and award winning games now, than there was 10 years ago, and again 10 years before that.
The only way you think "AAA is constant slop" is if someone gave you a frontal lobotomy, and locked you in a crate while oddly only drip feeding you bad games. So, has that happened, and we should call someone? Or are you just that dumb?
Have you seen what games are winning awards recently? Indie devs have taken so many awards that normally go to AAA development studios, that alone tells you that AAA games are not what they used to be. Devs are forced to make games they aren't passionate about, and it really shows. COD is practically a joke, AAA devs have spent hundreds of millions of dollars making cheap knockoffs of hero shooters or battle royales in the last 10 years and then drop them shortly after release, and pretty much every AAA game releases in a broken state that must be patched into some semblance of working order. If that's not slop, I don't know what is.
Yknow how you get games to stop generating losses? Stop making crappy games. This isnāt anywhere near a good supporting reason for making the games more expensive. This is like McDonaldās tripling the price of a Big Mac because the filet o fish isnāt selling well. Stupid.
You are active in subreddits for Lost Ark, Borderlands 3, Supervive, Diablo 4 and Palworld, all of which I think are shit, but you obviously believe are good.
So tell me what constitutes a game being objectively "not crappy"
Sales. If it sells. It works. Itās a āgoodā game, monetarily. You donāt bleed money when games sell. Lmao. This isnāt subjective. People make lazy crap or crap thatās obviously meant to send a message more than being a good game and it hemorrhages money.
Also active is a MASSIVE stretch. I havenāt participated in most of those subreddits for ages. Throwing Palworld in with that list just makes you look more like the bloke in the meme.
Hifi Rush won Game of the Year and sold poorly. It has awards for quality, but your metric means it's objectively bad.
Among Us sold nothing for years until it blew up in popularity and sold millions. So the game was objectively shit and then objectively good with zero changes?
Final Fantasy 16 sold millions, but didn't meet sales goals, ultimately losing money, while Balatro sold 1 million, far exceeding sales goals
A game always launches with 0 sales, so it is objectively bad until people buy it then it's objectively good.
There are so many ways that your statement is fucking stupid, and despite all the ways I can drive it home, it seems like it will never sink in for you.
Youād be making a compelling argument if the point was establishing some hard and fast objective metric for what a good game is or not. However back to the original point, it is ludicrous to justify raising prices to pay for creating games that fail. Regardless of how much you want to argue about a small portion of the overall issue at hand. Iād love to hear your explanation for how it remotely justifies raising prices in general because other stuff sells poorly. I suppose the price of the Honda crv should also skyrocket because accord hybrids struggle to sell and that would be okay too right?
Youāre right, Iām not going to acknowledge your diving as deep as you can into this small point about a semantics based argument because I see that it distracts from the lack of logic inherent with your original justification that I challenged. Additionally I see your usage of low brow insults and mockery and call that out as your own awareness of the weakness of your statements.
You replied to me to say "games will stop generating losses if developers make good games"
You're not getting insulted because I'm unsure how inbred that statement objectively is. You're getting insulted because I'm annoyed at losing 5 minutes of my life spoon feeding a troglodyte basic common reasoning. Ultimately, if you were a dog, you'd get put down by your owner for being that fucking brain dead.
Lmao. Not like your time has any value, friend. Thanks for the laugh though.
PS youāre still ignoring the meat of my statement that Iāve brought up as comparison twice now and referenced multiple times. Anyone who isnāt an actual projecting idiot would see what youāre doing here.
They are no longer writing their own engines or coding said games in assembly.
Depending on the game, Nintendo do use in house engines. It's been decades since anyone wrote anything in assembly. You really sound like you know a little and are acting like that means you know a lot.
Nintendo most likely still write their own engines. And their games were only coded in assembly back when coding in assembly was easy. Writing 16/8bit assembly isnt some amazing ability, its just tedious. You can explain it to a university student in like 4 classes.
Sure, but they share them for all their games and output a ton of games. Writing assembly isn't easy. It is anything but - fewer tools doesn't mean the job is simpler. Things get complex quick when you are writing for specific hardware that may or may not change.
They also add far more content to games than back when they were written in assembly. The time to develop games is much higher now, and that's with larger development teams.
Licensing the engine isn't that much of a cost-saver. The budgets and the up-from investment requirements have only gotten bigger. GTA 6 will literally cost over a billion to make
Yes, they'll definitely make a profit, but the barrier to entry is MASSIVELY bigger than any other entertainment industry.
Development costs are higher than ever. With the progression of technology, it takes more time and effort to take advantage of that extra power. This is especially true with Nintendo games who are specifically known for putting a "Nintendo polish" on all of their games. That polish doesn't come cheap. And this is despite their consoles being less powerful than other modern consoles, meaning they have to put additional resources into overcoming technological obstacles.
Now add in inflation and wage increases (in Japan where these games are being developed) into the equation and you start understanding why they need to raise prices on their games.
We have hit a pretty big soft cap in regards to game technology. Monitors only get so big. This isn't like the rush in the 2000's where every game had to push graphics boundaries to make sales. We have been at that point for a few years now. There is little desire or use in 8k+ monitors outside marketing. You just can't see it really unless said monitor is massive. Game engines are rented vs developed for the game by the studio.
It relates to detail. Only so much detailing needed. I could also bring up file size - it is no longer really a limiting factor as consumer electronics have excess space to throw things together. There are a lot of reasons why we have hit a soft plateau.
You're thinking of diminishing returns. There's plenty of room for improved graphics, but the processing power (and development man hours) to achieve similar gains will continue to significantly rise going forward.
No, the human eye is limited in its resolution. There is only so much detail people can actually see. Once you get to that point then it doesn't matter anymore. That limit has already been reached for consumer monitors and tv's. Plenty of high resolution textures out there and the computing power to use them.
There's plenty of room for improvement in graphics and I'm not really sure if you're serious in thinking there isn't. We're pretty far from photorealism, and even then complex photorealistic scenes are still a lofty goal. If you think it's a limitation of displays I just can't help you.
meanwhile 1 dude made stardew valley. pretty obvious u can make games that sell for less and then use the income to fund big games that are risky. or u can ignore that for ur shit argument defending huge companies making millions off u.
You're comparing a pixel graphics game from a decade ago to fully 3D games using the full power of the console. Obviously they can make simpler games to fund bigger games and Nintendo absolutely does that too. Part Time UFO, Snipperclips, BoxBoy + BoxGirl, Good Job, the "99" series of games... all low cost games that were released for the Switch.
But you're gonna ignore that because you want to desperately shit on a company that compensates their employees fairly since it goes against your narrative. When was the last time you heard about abusive practices or unfair pay at Nintendo? Oh that's right, never, and they've been around for far longer than most developers. In fact, Iwata cut his own salary when the Wii U failed to meet expectations.
The production and distribution costs of those cartridges are pennies in the bucket compared to the actual development costs, there's a reason the switch to digital hasn't really impacted the cost of games meaningfully.
Hasn't it? Thats a lot of store space and said store takes a cut of the profits to hold their items and sell them. You also get shipping costs and a bunch of logistics costs. More impulse buys.
They no longer have to make and ship cartridges to distribute them. They just let you download said game.
Yeah, how do you think they've been able to keep games at historically low (adjusted for inflation) prices for so long without raising them? They've tried every trick in the book to stretch the $60-70 price tag for as long as they could, even as inflation creeps ever onward.
Their sales numbers on their worst selling games are enough to turn many times over profit. You can say they tried every trick in the book, but it isn't true, and it isn't something they need to do with their margins. Hence, no. Video game companies have been trying to push these higher prices on the consumers, but it doesn't really match with the profit margins and salaries. This has been going on a while and yet, still high margins. Don't be fooled.
They no longer have to make and ship cartridges to distribute them.
People overestimate how much manufacturing and shipping cost. And also digital distribution has been here a while. The benefits were probably short lived as production costs rose.
Not sure why innovation is being brought up. In this case, it looks like the new console is a pretty big leap from the current console. It's not a PS5/PS5 Pro situation. People will see a noticeable jump in graphics and performance.
I must say, while I had a DS, DS lite, 3DS, new 3DS and Switch, the upgrades often seem so minor as if it could have been implemented in the first version already. Definitely wasn't enough changes to get the lite or OLED this time, now that I need to spend the money myself as an adult with responsibilities.
3DS games were 40ā¬, that was in 2011 and would mean 56,50ā¬ today, according to a calculator.
I am definitely fine with buying used switch games for 20ā¬ on ebay 5 years later.
Everyone else is talking about the labor costs, but shipping digital downloads isn't free. The data has to be hosted on servers capable of delivering the bandwidth for thousands of people to download the game simultaneously and get it done in a reasonable amount of time. That's probably a few hundred thousand dollars annually per game. Higher for the first couple of weeks and months when demand is higher.
Cheaper than manufacturing the cartridges, sure, but not free. And since they are still manufacturing cartridges, they still have to pay for the machines and bespoke molds and assembly lines, but now with a smaller economy of scale since they're getting far fewer sales of the cartridge version.
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u/Loud_Interview4681 22h ago edited 22h ago
They no longer have to make and ship cartridges to distribute them. They just let you download said game. The margins are insanely large. Add in they not longer subsidize consoles and release a new one every few years... yea. also the technology isn't improving that much as we have reached a pretty big limit on screen size etc. No more big innovation to make graphics look perfect- it is just art style now and most of the games reuse what works.