CREC010500 - Overview and definitions: video games - phases of development
Four phases of development听
The VGEC legislation sets out four phases of developing a video game:听
Initial concept design听
Design (also known as pre-production)听
Production听
Testing听
Expenditure eligible for VGEC is limited to core expenditure, which is expenditure on designing, producing听and testing a video game (CREC051000). This means that expenditure on the first phase of development, initial concept design, must be separated from core expenditure.
Attributing costs across the phases of development听
For video games, it is anticipated听that attributing costs to a specific stage may prove difficult. Video game developments do not always take place in a strict sequential manner. There is no standard format for development. Items of expenditure may therefore be attributable in varying degrees to several stages.听
For example:听
A game designer and level designers might be engaged from initial听concept through to testing. They will typically have less involvement after the design stage,听but they will often be required听to provide input throughout production and sometimes in testing;听
Programmers, artists听and sound technicians will be responsible for听creating the video game itself. In addition to the production phase, they will often be involved in testing and be required听to correct issues that arise from that process. They might also be consulted in the design stage to consider what is feasible听in respect of gameplay, artwork听or audio effects.听
It would be reasonable to consider that all these examples contribute to more than one stage of video game development.听
It is important to first identify听which phase(s) of development a given item of expenditure contributes to. It is then necessary to determine听how much expenditure is attributable to that phase.听
The attribution of costs between phases of development must be done on a just and reasonable basis听(CREC055000).听
Distinguishing initial concept design from later phases of development听
Because VGEC is available on design phase expenditure but not on initial听concept expenditure, it is important to understand the difference between the two.听
Initial concept expenditure relates to activities usually undertaken to determine听whether the video game is commercially feasible.听The expenditure is speculative in nature.听
Design expenditure is expenditure that would typically occur after the decision to proceed听with development has taken place but prior to production. It is also known as pre-production. The expenditure is not speculative in itself.听
In larger software developers, a game designer will often produce a proposal for a video game, sometimes referred to as a pitch. This will outline several aspects of the video game including:听
concept,听
gameplay,听
feature list,听
setting and story,听
target audience,听
requirements and schedule,听
staff and budget estimates.听
These elements may not always be considered in detail at the initial听concept design stage, especially for smaller VGDCs. This may be particularly true where the video game is a sequel or heavily based on another existing game, where the concept and gameplay may be determined听by the existing game.听
These initial听considerations are speculative in nature and typically do not qualify as core expenditure. They also relate primarily to commercial decisions that may be addressed by the development team or the publisher.听
However, there is no reason that some of the activities undergone at this stage may not also contribute to qualifying design. This might be where an aspect of the initial concept design is given specific attention in order to distinguish the game from other similar concepts.听
For example, a game may rely heavily on aspects of gameplay to produce a unique selling point for the game. A programmer may become involved to help address initial queries over whether some aspects are possible and how they might affect other aspects of gameplay.听
This might be considered to fall within initial听concept design because it is still uncertain whether the video game will commence听development. This activity may also be considered to be听qualifying design on the basis that it would usually occur, and any resulting code will be also be听used, after the game had听received approval.
Expenditure attributable partly to initial听concept design and partly to later phases of development听
Some costs relate both to the concept design phase of a video game and to other phases of development.听Examples of such costs would be those incurred on gameplay design and the story.听
In each case it is necessary to establish to what extent the expenditure on the story is incurred on听establishing whether a video game should be made and how far it is incurred on听actually making the video game.听
The correct apportionment will vary according to circumstances. There is no definitive apportionment method,听and any听reasonable method may be used.听
For example, if a developer worked substantially full time on a video game for a year, with the first three months being taken up with initial concept design and the remaining nine months with design, production and testing, it would be reasonable to allocate one quarter of the developer鈥檚 fees for that period to the initial concept stage,听and three quarters听to the later phases, to听be treated as core expenditure.听
A plot story could be used during the design phase of a video game as well as the later phases of development.听If the original story was more or less unchanged through this process,听then it may be reasonable to allocate its costs according to how it is used through the various stages of development.听This could be evidenced听by the extent to which reference is made to it throughout these phases.听
It may be the case that a writer is engaged and is paid for an initial听fee for a first draft of a story for development purposes followed by further instalments as development proceeds and refinements are made and a script for the voice actors produced. It may be reasonable to allocate听costs according to the timing of payments and the use to which the various versions are put.听
For example, if a single rough draft of the story is required听for the pitch, the initial听fee related to this would be concept design expenditure and not be included in core expenditure. Provided that all subsequent听payments for story development and the script for actors follow the decision to proceed听with the video game, then these may be treated as core expenditure.听
A development company may rely on an estimate used in the development of previous听video games for apportionment, but this will only be appropriate where听the facts are similar.