What does a game's budget actually get spent on?
Mostly people, over a long period — and the second largest figure is frequently marketing, which for large releases can approach or exceed the cost of making the game.
The development side:
Salaries dominate. A large team over several years is the overwhelming majority of development cost. Everything else is comparatively minor.
Outsourcing, particularly art assets, animation, localisation and QA, which is now standard practice.
Licensing — engine royalties or fees, middleware, music, sports and player likenesses, and brand licences. Music and sports rights are frequently time-limited, which is why some games are delisted years later.
Motion capture and voice, including studio time and performer fees.
Certification and platform requirements, which take time and iteration.
Server infrastructure for online titles, which continues after launch indefinitely.
The marketing side, which surprises people:
Advertising across television, online, outdoor and influencer channels.
Events and showcases.
Physical retail costs — manufacturing, distribution, shelf placement.
Platform revenue share, commonly around 30% of each sale on major storefronts, which is not marketing but takes a comparable bite.
Why this shapes what gets made. A game costing a very large sum needs an enormous number of sales to break even, and publishers respond by favouring established franchises, proven genres and recurring revenue — which is a financial conclusion rather than a creative one. It also explains the growth of live-service models, where post-launch revenue amortises the cost.
Why budgets rose so sharply: rising fidelity expectations, larger worlds, longer development cycles, and higher salaries for scarce specialists.
Where the money does not go. Announced budget figures frequently include marketing without saying so, making comparisons unreliable. Developers do not generally receive royalties, and studio closures after commercially successful releases are common — profitability at the publisher level does not translate into security for the team.