Forbes provides this article and interactive pie chart explaining/breaking down the cost structure of modern video games such as the blockbuster Gears of War:
Here’s a Summary of the Interactive Pie Chart:
- 25%/$15 – Art Design
- 20%/$12 – Programming and Engineering
- 20%/$12 – Retailer’s Cut
- 11.5%/$7 – Console Owner Fees (to Microsoft/Nintendo/Sony)
- 7%/$4 – Marketing Costs
- 5%/$3 – Marketing Development Fund (print circulars/banner ads, etc.)
- 5%/$3 – Manufacturing Costs, Packaging
- 5%/$3 – Licensing Fees (personality rights, character and story licenses, copyrights, trademarks, etc.)
- 1.5%/$1 – Publisher Profit
- 1.5%/$1 – Distributor Fees
- 0.3%/20¢ – Corporate costs (management, overhead, legal fees
) - 0.05%/3¢ – Hardware Development Costs (Developer kits, demo units etc.)