Although we may be biased, we believe localization has a powerful impact on a company’s expansion and its products’ success. In fact, when well executed, the localization returns on investments can be staggering.
That’s particularly the case in the gaming industry, where localization can start quite early. But before examining the financial advantages it can help you get, we must first examine its costs.
The costs of video game localization
Due to the incredible amount of factors that can affect localization costs, it is impossible to give a precise estimate. After all, consider all of the following factors:
- The language pairs.
- The type of content (UI elements, in-game text, dialogues, marketing content, etc.).
- Reliance on machine translation or human translation.
- Expertise required and translation quality needs.
- The translation volume.
- The deadline required.
- Usage of glossaries, and style guides.
- Translation memories.
- If graphical elements are needed.
- Language testing requirements.
- Functional testing requirements.
This is not an exhaustive list, and many more elements must be considered. But for the purposes of this article, we will rely on Lilt’s great work on this topic to establish some basic estimates that we can use to assess gaming localization ROI.
According to Lilt, the average high-volume project will deal with the following volume and costs:
- 30 target languages.
- 200,000 words per language per year.
- The price of $0.16 per word.
- An additional $10,000 supplemental charges.
So, based on these numbers, a high-volume project would need to translate 6,000,000 words at $0.16, which is $960,000. That’s almost $1 million! Quite expensive…
However, before you decide to scrap any localization projects, let’s consider the upside.
To do that, we will examine some real cases and the revenue generated through localization.
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Video game localization: The 2 Best Cases
Although there are many cases we could analyze, we believe Ubisoft and Activision-Blizzard are among the companies that have excelled in localization.The French Giant—Ubisoft
Ubisoft is a French gaming company with incredible franchises such as the Assasin’s Creed series. The company’s worldwide success can be attributed, at least in part, to its extraordinary dedication and meticulous localization efforts.
One of their most recent successes was Assassin’s Creed Valhalla. The game is set during the series of Viking incursions in Europe. The main character, Eivor, travels across many different countries with different languages.
Not only did the company translate the core language spoken by the protagonists into 14 different languages, but they also recreated old languages (Norse, Britonnic, Galiec, Old English, etc.) to increase the realism and “immersiveness” of the game.
There is no doubt in my mind that recreating these languages on top of the 14 available translations was a costly endeavor, which begs the question, was it worth the investment? Let’s look at some cold facts.
Ubisoft’s revenue
According to Ubisoft’s co-founder, Yves Guillemot, Assasin’s Creed Valhalla crossed the $1 billion mark in revenue. Granted, that alone does not indicate that this success can be credited to localization alone.
But, if we look closely at the data, we can see some additional evidence of this strategy’s effectiveness. In its latest financial report, Ubisoft generated 64% of its revenue from international sales. The EU itself generated an additional 36%.
Considering that they earned 2.2 billion in revenue, that’s $1.4 billion from international markets and roughly 800 million from the EU. I do not doubt that the French market represented a fraction of the European market’s revenue.
Ubisoft’s localization ROI
Let’s contrast that with the numbers from the first section. Assaasin’s Creed Valhalla’s main quest alone included a minimum of 36,400 words. If we include all the side quests, random NPC dialogues, menus, etc., it is reasonable to expect the game to crack the 150,000-200,000 words. Considering the 14 languages they translated the game into, that’s roughly 2,800,000 words, which would cost approximately $448,000. For voiceovers, we will simply estimate them at an average of $0.25 per word, leaving us at a total cost of $400,000 for the 8 languages included. Of course, this estimate does not include graphic redesign or other localization-related expenses, and it should be taken with a grain of salt. For completeness’ sake, we will add another $152,000 under “other localization costs.” This leaves us with a total cost of $1,000,000. We can consider this the minimum price tag to localize a game of this magnitude. Assasin’s Creed Valhalla’s localization may have cost a minimum of $1 million, but it generated an astounding $1 billion in revenue. That’s a mind-boggling ROI. Granted, we understand these impressive numbers go beyond localization, but that’s where they start. Without taking the time to create such an immersive and digestible game, the game’s worldwide expansion and its ensuing success would have been lower.Activision-Blizzard
Another great case is Activision-Blizzard. As a global enterprise, the company recognizes the importance of catering to diverse markets and implementing a robust localization strategy. This approach ensures their games resonate with players across different cultures and languages, ultimately maximizing the company’s reach and revenue potential.
They take their localization efforts quite seriously. In fact, every single major Activision franchise is translated into 10+ languages.
For instance, one of their latest blockbusters, Overwatch, is available in 15 languages (as seen on the left). And the World of Warcraft games are translated into 14 different languages.
That being said, the localization strategy adopted by Activision-Blizzard involves more than mere translation; it entails adapting the game’s content, design, and marketing to resonate with each target audience. This comprehensive approach includes modifying cultural references, adjusting in-game elements, and even redesigning certain aspects of the game to comply with regional regulations and sensibilities.
Here are some great examples from the World of Warcraft: Wrath of the Lich King game. At the bottom, you can see the original game, as intended for most audiences. The vivid depictions of bones and guts are pretty standard.
At the top of the pictures, you can see the Chinese version of the game. Culturally, they have a strong distaste for these types of depictions in China.
Activision-Blizzard’s revenue
Although the company does not publish detailed regional sales or revenue data, we get enough data to examine whether these investments are worthwhile.
In the screenshot below, you can see the revenue of the three core branches of the company and the revenue generated in three core regions, the Americas, EMEA (Europe, the Middle East, and Africa), and the Asia Pacific.
For the sake of simplicity, we will treat the Americas as its local market and the remaining regions as the external or international markets. Overall, the three branches generated an astounding $4,931 billion locally and an impressive $3,872 billion internationally. That’s roughly 44% of their entire revenue! And that’s the lowest possible estimate.
Another great example is CD Projekt, but we won’t cover it in detail since we already did it here.
Simply put, despite being initially a small Polish company, they managed to launch themselves to the top of the industry. Today they stand as one of the largest gaming companies worth billions in IP. CD Projekt is unquestionably one of the companies that understand how to leverage localization best. In fact, in 2021 ALONE, they generated 97.6% of their sales revenue from global exports.
Key Takeaways
Despite what may seem like a hefty initial bill, investing in localization can yield impressive financial returns. In fact, there are 5 core benefits of gaming localization.
- Expanding your player base: Localizing a game allows you to tap into millions of potential players who might have otherwise been inaccessible. This expanded player base can significantly boost sales, increasing revenue and profitability.
- Higher retention rates: A game that resonates with local audiences’ cultural preferences and expectations will likely play your game more regularly and for longer. Higher retention rates go hand in hand with higher in-game purchases.
- Enhanced word-of-mouth marketing: Players are more likely to recommend a game to their friends and family when it is successfully localized. This organic word-of-mouth marketing can lead to increased sales without additional marketing investment.
- Increased in-game monetization: Although often regarded negatively by the gaming community, micro-payments and in-game monetization are significant revenue boosters for modern games. You can increase conversion rates by providing localized in-game items, currencies, and promotions.
- Total revenue: As we have already established, localization can be one of the fastest ways to grow your user base. It often does not require complex engineering or thinking of new game features. Instead, a simple adaptation can lead to massive increases in sales and, thus, revenue.
