Different Development Models
There are several ways of which a game can be developed.
The 'Tent Pole' business model is the idea that a blockbuster game will be teleased, with a lot of support, marketing and investment. The money made will then be used to fund smaller, more risky games. It is provideing support or 'a tent pole' for these new, more creative games. EA is a prome example, when they spent $372 million on research and development in 2008 alone.
The 'Hollywood' model is another strategy of development that often requires more money, but produces a higher quality product. In this model, a large in-house development team is swapped out for a smaller team that collates the work of specialist external companies/teams.
Independent games, or 'indie' games use a different development method. Their development team is usually very small, and if the game is to be for a console, a license for a Software Development Kit, which costs money. An SDK license for a console curently costs between $2000-$10000, but Sony have recently reduced their fee to $2000. To create an independent game for Apple's iOS a payment of $99 needs to be made, and Apple will take 30% of the profits.
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