Consider a team of 80 members, whose salary each is $2000 / month.
The game takes 3 years to develop and test.
That is $2000 x 80 x 36 = 5..760..000
Make that $3000 / month and the costs rise to $8..640..000.
You see? It isn't so cheap anymore.
Here's a quote:
Source: PS3 Development Costs Too high?The industry insider went on to say, “Kutaragi has said, ‘Please develop suitable software for PS3 - this software must not be of the same standard as PS2 software.’ Developing software for the PS3 from scratch will require an initial investment of at least 2 billion yen [US $17.6 million] [not including development costs]. There are not many software companies that can easily afford that kind of money.”
Source: Wii Development costs a quarter to half compared to PS3/360 (Nintendo + Wii + Ubisoft + Red Steel + Sony + PS3)Ubisoft's Red Steel game for Wii will incur a development cost of approximately $12.75 million. Red Steel is being readied to launch alongside the Wii later this year. According to its developers, the game will have approximately 13 hours of play time.
Wii is considered to be the cheapest next-generation console to develop for. In May, THQ president Brian Farrell estimated Wii development costs are in the range of a quarter to half of that required for PlayStation 3 or Xbox 360 development. What does this mean for developers? A game such as Red Steel could cost them between $24 - $48 million on PS3 or 360.
See? It's not so farfetched, after all.
I bet that's not something they do every day.