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the World of Warcraft, Halo 3, Gears of War 2, Spore and Grand Theft Auto have huge development costs. As a result, the break-even-point for such games is usually in millions of units. Suppose a game is developed with $40 million, the company will need to sell nearly 2 million units to break-even. For e.g. Rockstar games developed Grand Theft Auto 4 at a total cost of $100 million. If the selling price of a unit is $50.00, the developer will have to sell about $2 million copies to break even.

Sometimes, these huge developmental costs make it harder for the developers to realize the full costs that they have invested in developing the product. On the other hand, all the resources present with the company are allocated towards the development of these products and as a result of the limitation of these resources; no other games can be developed while the development of such games are undertaken. As a result, in the gestation time period of these Hollywood-style games, the company does not generate any revenue by launching new titles and hence, is not making any money to cover up the developmental costs and its day-to-day administrative expenditure. As a result of that, the developers do not get the return on the investment unless the game in launched. Thus, the developers earn huge losses during the time period and when the game is finally launched, the losses are so high that the game sometimes fails to meet the company's expectations. Hence, that turns into a loss making business.

Thus in order to keep the businesses running smoothly and to make sure that the day-to-day expenditures are met, the company should have multiple production lines. One production can be dedicated to the development of the 'Hollywood-style' games while, the other production lines can churn out games and make sure that the business is generating the necessary revenue that would finance the development of the big games as well as earns the company some profit. For e.g. games like Portal, Pac-Man, Super Mario Bros do not need big developmental budgets and at the same time, as the questionnaire has already proved that such games are more popular and are bound to generate sales and keep the company profitable.

For e.g. Portal, a first person puzzle game was started by a student as his school project. Valve Software bought the rights to the game and then offered the final polished product to EA which included the product in its 'Orange Box' collection. By the end of 2008, EA had already sold $3 million copies of Portal but the research and development costs at EA were so high that they absorbed all the revenues generated by Portal and so they never saw the games huge success materialize. (Evan Van Zelfden, 2009)

So the company should develop a production line that can design games that are not so cumbersome to develop and multiple games can be developed during one year. Similarly, the developers instead of developing all the game by their own, should commission other developers to develop games for them so that they do not have to incur the various production overheads and as a result, the costs can be lowered. The costs of developing a game can be controlled by making sure that the company maintains a certain revenue generating capability.

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