Wow.. $2 million? Anyone in the know who can talk about where the money goes? It doesn't seem like the art assets would be that much, and in both cases the engine tech was relatively robust before the project started (TQ -> Grim Dawn and Mythos -> Torchlight). I realize that the sound/music/VO for Torchlight was likely reasonably pricey, but it seems like Torchlight was a nice throwback to games from yesteryear with a small team that was imminently doable. Compare it to that indie ARPG from a while back.. what was it, Depths of Peril? Presumably indie devs aren't spending $2 mill off their credit cards, so what's the difference in cost? (I'm not claiming that the quality is the same, but if the primary difference is simply polish, well, polish costs a whole truckload more than I would have expected!)
As Linoleum says - it's the people.
It's amazing how many people it takes to make a game, and how expensive it is to run a business. It was certainly an eye-opener for me. I was the programmer/designer/producer for Fate - I'd say I averaged about 3 people on the game ( artists came and went as I could get them ) - but I heavily outsourced with a pretty cheap bid on that game.
Fate probably cost approximately 1/6th of what Torchlight cost. Where did the money go? Well, to the people - and what that bought us is fairly easy to articulate. Torchlight looks a lot better, has a great deal more content, and is less procedural - there is more 'handmade' stuff in it, from the levels, to the gear, to the monsters, to the effects. Less of Torchlight was outsourced, percentage-wise.
Even if you think of a person's salary and do mental math as to how much it costs to hire a person for a year, that's not really the whole of it. Fringe cost of an individual is usually about 20-25% - healthcare, transportation allowances, retirement, and so on. We ran really lean on equipment and pretty cheap on office costs too - about 9k a month for our lease and we got most of our equipment at liquidation at the start.
Everything gets a lot more expensive once you leave the basement - your network and telecom costs, servers, software licenses, middleware licenses, accounting services, payroll, the list goes on.
2mil sounds pretty expensive from the outside, but if I mention the cost and time to most folks in the industry who have been involved at the financial level, their eyes bug a little bit and they say - 'that's ALL?' - most of them tend to estimate we would have spent 17-19 months on the project for 4-5 mil, and that that would have been fairly fast.
Now I won't begin to argue that Torchlight isn't a better game, but let's assume Fate had a team of 5 equivalent full time for a year. Is Torchlight 3 times better to justify 15 people for the year it took to make? I don't think so.
I don't think you can make some sort of linear association between time and quality - from a business perspective, it's probably a case of time vs marketability/profitability. From my standpoint, it's fairly easy to say that Torchlight was 3X more marketable than Fate, and will (probably) be 3x more profitable. From a pure reception standpoint, the first is already the case. Is it 3X better? shrug - I dunno. But I DO think it is a much better game.