I'd wager that we are breaking even, at best. Too much emphasis has been placed on generating gross revenue (i.e., more and more sales) as opposed to driving for a larger net profit. Spending $1 million to make $10 million is better than spending $35 million to make $40 million (or in some cases 50 to make 40).
At a time when next-gen budgets are at the $15 million mark - on the low end of the scale - executives should be salivating at any opportunity to optimize. Simply put, there is an enormous opportunity to generate profits via more efficient production methodologies and treating development staff as investments as opposed to commodities.
The Bigger Picture
More fundamental is the notion that immature practices and extreme working conditions are bankrupting the industry's passion - the love for creating games that drives developers to be developers.
When the average career length of the game development workforce is just over five years and over 50% of developers admit they don't plan to hang around for more than 10, we have a problem.
How can an industry truly grow, and an art form evolve, if everyone is gone by the time they hit 30?
How can we grow beyond an 11.5% female workforce when the level of commitment expected all but negates any hope of raising a family?
Why does this kind of stuff matter?
Ask yourself what movies would be like if they were created mostly by people with five years of movie-making experience - and were typically male. Spielberg would have checked out way before creating E.T. Same for music, art, books - every art form. J.K. Rowling would never have penned Harry Potter. The examples are countless.
Immature production practices and poor quality of life are stealing the industry's ability to innovate and reinvigorate itself with fresh ideas. It's limiting our ability to attract new and diverse talent. It's robbing us of our experienced creators, who leave us with their hard earned tacit knowledge in tow. It's restricting our ability to reach broader audiences and create games with ever more cultural significance.
Investing in developers' careers is investing in the future viability of the game industry and the continued evolution of the medium of games.
What's the return on that investment?
Jason Della Rocca is the executive director of the International Game Developers Association. (Opinions expressed do not necessarily represent the IGDA.) If the frequency of posts at his personal blog, Reality Panic, is any indication, he works way too much.