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So 360/ps3 video games takes a few months to a few years to make I assume. If so where does the money to pay employees and costs of everything needed to make the game come from during those few months/few years?

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Big publishers. –  Justin Skiles Oct 11 '12 at 1:24
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This is a very pertinent question to the games industry in general, I really cannot understand why someone voted to close. –  Nick Wiggill Oct 11 '12 at 13:58
    
I voted to close when I first saw the question. While I thought it was a good question, I figured it would generate a list of answers, for all the different sources. It would be challenging to get a single correct answer. While it is generating a list, it's being contained to a single answer for now. As long as I can keep updating it with the additions I get in the comments :) –  Byte56 Oct 11 '12 at 14:44
    
I do think it's answerable, there is a finite set of funding sources, especially if you keep them relatively general as you have. –  Josh Petrie Oct 11 '12 at 15:57
    
I agree. That's why I tried my hand at making a general answer to try and set the tone and save the question. –  Byte56 Oct 11 '12 at 16:15
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1 Answer

Depends on the game and the people making it. There are common sources for nearly any product being created, games aren't that different, but the below are tailored slightly more towards games:

  • Publisher: A company that partners with a development studio to create a game. This is very much like an investor below, but the publisher will typically have considerably more control and influence over the final product.
  • Investors: People or companies with money. They invest the money to make the game, they share in the profits.
  • Capital from previous games: The game companies themselves fund the games with money they made from previous games.
  • Personal funds: Indie devs often work for no money, have jobs on the side or burn through their savings while working on their game.
  • Crowd sourcing - Kickstarter or similar sites allowing the crowd funding of games.
  • Grants: Via the government of their country or various organizations promoting arts.
  • Loans: Companies or individuals can take out a loan to pay for the development costs of a game (this is similar to investors, but with banks and likely more liability).
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This is all true, but perhaps it's worth emphasising that for "360/PS3" games the question asks about, the most common one here is a specific type of 'investor' in the form of a traditional publisher. –  Kylotan Oct 11 '12 at 0:13
    
From my knowledge, getting a loan for a game launch has been very difficult since the whole dot.com IT craze crash. Before then (at least in sweden) you could get loans for it. And yes, publishers tend to work as the investors for games, and usually they want a lot of pull for their money, so they can maximize their investments chance of panning out. See the kickstarter for double fine for instance. –  Daniel Carlsson Oct 11 '12 at 0:51
    
I was also trying to emphasise that a publisher is a bit different from what we normally think of as an investor, in that they tend to take a more direct interest in what you create and how you create it. Investors are typically a lot more hands-off. –  Kylotan Oct 11 '12 at 11:32
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Don't forget, some countries (like NL) offer subsidy for several forms of artistic expressions, including artistic games. This won't get you a lot of money but all bits help. –  Thomas Oct 11 '12 at 13:50
    
In the EU, games are now seen as a cultural artifact, so particularly in the northern European countries (as I've seen) you will find that grants are actually given for the development of games -- pending review of your proposal, of course, since others will be competing for these grants. So @Thomas is correct. –  Nick Wiggill Oct 11 '12 at 13:53
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