Most consumers know that making a top quality movie takes a lot of money. The last of the Batman series, "The Dark Knight Rises" had a budget of $250 million and "Toy Story 3" cost $200 million to make. People rarely think about the costs of video games, but the budgets of some games can rival those of certain Hollywood blockbusters.

Video Games Vs. Movies
The most expensive video game to produce came in at $100 million. "Grand Theft Auto IV" (GTA IV) took over 1,000 people more than three years to produce and has enough content to keep the average gamer busy for at least 100 hours. Adding to that price tag is more than 100 soundtracks and hours of video taken from New York City streets.

Compared to the $300 million price tag of one of the most expensive movies ever made, "Pirates of the Caribbean: At World's End," $100 million doesn't seem very expensive. "GTA IV" had worldwide revenue of $500 million and "At World's End" brought in $960 million, proving that the video game industry can create investment returns on par or in excess of some feature movies (unless you start comparing video games to some of the top-earning superhero movies).

SEE: Why Movies Cost So Much To Make

A Changing Landscape
"Grand Theft Auto IV" wasn't the only big budget game released in 2008. "Gran Turismo 5" also came out that year and cost $80 million to produce, making it the second most expensive game of all-time after GTA IV. However, the fact that few games have had comparable budgets since 2008 shows that a lot has changed in the video game world.

Competitors like Zynga are making games at a fraction of the cost. The LA Times reports that games like Zynga's wildly popular "Farmville" costs between $100,000 and $300,000 to produce. Instead of consumers making a one-time purchase of the game and maybe paying a monthly fee to be part of the multiplayer community, games like "Farmville" allow players to pay to purchase items in the game with virtual money or earn virtual funds by viewing ads, another revenue stream for Zynga.

Business Insider reports that Zynga made over $250 million in revenue in 2009 from an investment of less than $500,000, after adding other company costs indirectly related to the creation of their games.

SEE: 5 Top-Earning Video Game Characters

But Will It Last?
A 2011 study found that using Facebook as a gaming platform has dropped 50%. If stock prices are any indication, the Facebook game craze may be short-lived. Zynga's stock is down more than 80% since March, and Facebook's stock recently hit an all-time low.

Video game retailers are feeling the pinch of declining sales too. Gamestop has seen declines since last year, despite forecasts of more than $67 billion in video game revenues in 2012.

Joe Gorman, vice president of GameStop's mobile business unit, thinks that tablets are the future of gaming, as they are accessible to a wider audience, continue to drop in price and are becoming as powerful as some computers.

The Bottom Line
Big budget games like Halo 4 are set to hit the streets in 2012, but with tablets and social media sites now offering lower cost platforms for the production of video games, companies may choose to use a model similar to Zynga and spend less on design but find more ways to create means of ongoing monetization.

In the past, video games have largely followed the path of the movie industry by spending an increased amount of resources for a more vivid user experience. With a variety of platforms, including the rumored Apple TV, and a recently leaked version of the new Xbox, some movie studios may follow the lead of video game creators by attempting to create a more interactive experience at a lower cost.

SEE: The Best-Selling Video Games Of All Time

Related Articles
  1. Budgeting

    Trunk Club Review: Is It Worth It?

    Take a close look at one of the best-known online clothing services in the country, and determine whether it's a good fit for your style and budget.
  2. Budgeting

    HelloFresh Review: Is It Worth It?

    Discover one of the world's most successful meal subscription services, and learn more about how the service operates and what it costs.
  3. Budgeting

    Beer of the Month Subscription Review: Is It Worth It?

    Learn how you can get access to some of the best craft beers produced in the world, delivered right to your front door every month.
  4. Budgeting

    Just the Right Book Review: Is It Worth It?

    Take an in-depth look at Just the Right Book, a subscription service that delivers personalized book selections based on your reading history and preferences.
  5. Entrepreneurship

    ‘Happy Birthday to You’ Belongs to Everyone Now

    A class action lawsuit over the copyright to the iconic American song “Happy Birthday to You” ends by placing the ubiquitous ditty in the public domain.
  6. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  7. Your Practice

    What the Next Decade Holds for Financial Advisors

    A look at the top trends of the financial advisory business in the next decade.
  8. Budgeting

    The Honest Company Bundles Review: Are They Worth It?

    Learn more about The Honest Company and its bundle subscription services, which deliver discounted diapers, formula and other baby products to your doorstep.
  9. Budgeting

    Blue Apron Review: Is It Worth It?

    Read about one of the top meal-kit delivery services in the United States, and learn more about what it offers and how much it costs.
  10. Stock Analysis

    JCPenney's Path To Profitability (JCP)

    Learn about what J.C. Penney's management team has been doing to profitably grow its business as the company recovers from years of revenue declines.
RELATED FAQS
  1. How does a cost-of-living adjustment (COLA) affect my salary?

    Some companies build salary adjustments into their compensation structures to offset the effects of inflation on their employees. ... Read Full Answer >>
  2. Where can you buy NetSpend reload packs?

    You can only purchase NetSpend reload packs at Giant Eagle, Albertsons, Roundy's and Pathmark supermarkets. NetSpend cards ... Read Full Answer >>
  3. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  4. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  5. What role does the OEM (original equipment manufacturer) play in the finished product?

    Original equipment manufacturers (OEMs) do not typically play much of direct role in determining the finished product. However, ... Read Full Answer >>
  6. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center