New multiplayer technologies are reducing the Total Cost of Ownership

9 October 2020

Manuel Karg, CEO & Founder of zeuz

Before founding zeuz, Manuel Karg spent many years working in corporate finance and M&A. So as well as being an authority on hosting and operations he is, in his own words, ‘a numbers guy’. In this talk, delivered at Devcom, he explores why more people aren’t making multiplayer games. It comes down to the complexity, maintenance and costs that make up the Total Cost of Ownership.

At a glance

  • Working out the Total Cost of Ownership is tough. Developers must consider both fixed and variable running costs for the title’s entire lifetime, as well as investments in hardware and talent.

  • Over the last 30 years, development practices have evolved a lot. Studios can now take advantage of technological innovations and third-party suppliers to lower their fixed costs and increase the proportion of flexible costs that scale with the success of a game.

  • A flexible, hybrid hosting set-up, for example, can cut monthly costs per MAU in half.

Minimising Total Cost of Ownership

However big or small your game, you’ve got fixed and variable running costs for the title’s entire lifetime to consider, as well as investments in hardware and talent. To some extent, budgeting and cost control is a matter of instinct, experience and blind luck. There are, however, ways to minimise your risk and control your costs more effectively.

Looking back over the past few decades, Manuel discusses how multiplayer development has evolved. He then summarises how studios can now take advantage of technological innovations and third-party suppliers to lower their fixed costs and increase the proportion of flexible costs that scale with the success of a game. A flexible, hybrid hosting set-up, for example, can cut monthly costs per MAU in half.

Then, looking forward to the upcoming decade, Manuel looks at how multiplayer development is likely to change. With more providers, partners and platforms to connect with, studios will have more choice but they’ll also need help with managing the increased infrastructural complexity. However, thanks to a scalable hosting and operations platform on which to integrate this ever-expanding ecosystem of multiplayer technologies, developers will once again be free to focus on what they’re best at: delivering great content to satisfy and expand the global games community.

If you’re short on time, here’s a chapter-by-chapter breakdown:

  • Multiplayer development is seriously complex. (1m 56s) Every multiplayer, no matter how modest, requires spending on skills, tools, infrastructure and services. Even if you do hit the big time, the big time can hit right back: as your game grows, it’s easy to miss out on a lot of profit.

  • Defining Total Cost of Ownership. (4m 39s) TCO = Fixed & variable running costs (operations/software tools/people) x lifetime + investments (hardware & skills). Your TCO will depend on a number of factors, but the good news is that many of the risks can be mitigated.

  • ‘The Iceberg of Costs’: Budgeting and cost control. (9m 45s) There are foreseeable costs that you can budget for like dev tools, planned platform costs, 3rd-party live ops tools and voice chat. Like an iceberg, however, it’s the costs you can’t see that you have to worry about like development budget overruns and those that can arise when a game succeeds beyond expectations, such as additional infrastructure expenses and cross-play enablement.

  • Regaining cost control is getting easier (and faster). (15m 20s) 30 years ago, studios had to supply their own on-prem servers and online services. As bare-metal rental, cloud and hybrid cloud game server specialists entered the market, the associated costs became more flexible. And as the market evolves, that process is accelerating.

  • Risk premiums. (20m 34s) Using a hybrid hosting orchestration means paying a small risk premium over on-prem hosting – but a much smaller one than with a public cloud solution. It also means you eliminate the much greater risks associated with paying upfront for unused servers or failing to scale to meet player demand.

  • Save more than 50% on your hosting costs. (22m 30s) Using a hypothetical FPS, Manuel shows how costs per MAU add up over a game’s lifecycle, and how a flexible hybrid scaling set-up can cut monthly costs per MAU in half, from $0.26 to $0.13 compared to an on-prem scenario.

  • TCO in the 2020s. There are already plenty of providers to choose from when it comes to things like hosting, backend services, anti-cheat solutions and voice-chat providers. The more partners, platforms and providers you introduce, the more combinations are possible. The downside of this is that it adds infrastructural complexity, and with complexity can come additional costs – unless you have a scalable platform that can integrate all these different technologies seamlessly.