Top of the range, AAA videogames are huge endeavours to create. They are often likened to the production of major blockbuster movies in terms of budget and in terms of scope, as in the amounts of people involved and timelines.
In the ongoing court hearings between the US Federal Trade Commission and Microsoft, Sony inadvertently revealed just how much it spent making some of its biggest exclusives in The Last of Us Part II and Horizon Forbidden West.
According to documents, it cost Sony $212 million to create Horizon Forbidden West, with a production time of five years, involving 300 individuals. Meanwhile, The Last of Us Part II cost $220 million and had roughly 200 people working on it.
Both of these are considered leading videogame titles, expected to make millions in profits for their publishers and developers. Costs in the $200 million region are similar to those in major motion film production.
In 2017, Walt Disney Studios spent $200 million to make Iron Man 3, which was a massive commercial success earning over a billion dollars at the box office.
Videogame production costs are huge
It isn’t just development costs either. The biggest videogames, like films, have to spend considerable amounts on marketing and publishing. Grand Theft Auto V, long considered one of the most expensive games ever made, had an initial budget of $140 million according to GameRant.
However, marketing costs ballooned this figure to $265 million, which means Rockstar nearly spent as much as the development costs just to market the game. A smart move, as GTA V is still among the best selling games in the world 10 years after its initial launch.
Games only got more expensive to make since then. CD Projekt Red’s Cyberpunk 2077 is believed to have cost nearly $350 million between development and marketing and made $81 million profits, breaking even within two years of release. This means that in total Cyberpunk made over $430 million between 2020 and 2022.
To put it into perspective, Cyberpunk 2077’s costs were similar to those accrued by Avengers Endgame at $350 million to $400 million, which is the second highest grossing film of all time, after Avatar. But Cyberpunk didn’t make $2.7 billion.
Franchises and live service games could see budgets reaching billion of dollars or more. According to a May report (PDF) from the UK’s Competition and Markets Authority (CMA) on the Microsoft/Activision Blizzard deal, gaming franchises like Call of Duty can see development costs reach $660 million, with marketing rocketing to $550 million.
The content stream of content needed for games like the annual Call of Duty titles also means that multiple studios need to be involved in development.
In the report, Activision, Call of Duty’s publisher, is quoted as saying “We have to make so much content for Call of Duty, that we can’t even lean on one lead studio anymore. Now we need almost 1.5 lead studios for each annual CoD. That kind of bandwidth pressure is forcing us to use outsourcers more and more. I don’t see that changing anytime soon.”
Increasing costs involved in development and marketing have seen local retail price skyrocket in recent years. The South African pricing for Diablo IV surprised local gamers, with the Standard Edition of the game on PC going for around R1 429 depending on the exchange rate.
But buyers were undeterred by the price, and the critically successful Diablo IV became Blizzard’s best selling game in just five days.
As long as gamers are willing to spend steadily increasing prices for AAA titles, the development community and publishers will continue to pump budgets and costs. But is this sustainable? Cyberpunk 2077 cost as much as the biggest Avengers movie ever, but didn’t make nearly the same in profits.
Some games cost more than the biggest films
There is a two-prong issue with ever-increasing budgets. The first is that developers will seek cost-cutting measures that conserve quality, or they will try to. Ubisoft, one of the biggest videogame makers in the world, announced in March that it was turning to AI to write ambient dialogue and NPC barks in order to save production time, and in turn, costs.
Unity, the most popular game-creation software in the world, revealed new AI-powered design tools on Tuesday, which can design environments and concepts in seconds – effectively cutting production time and team sizes. Obviously, developers reacted with concern about what it means for jobs and also what it means for artists’ copyrights.
The second issue, is production bloat. The title which is believed to be the most expensive game of all time is still in development. Star Citizen, created by an independent studio and buoyed by a hardcore community, has accumulated over $580 million in development costs over the last decade, and still has yet to see an official release.
Star Citizen’s budget is more now than that of Star Wars: The Force Awakens, believed to be the most expensive movie ever made.
Unlike films, videogames can release in betas or “early access” moves, allowing developers to keep working while allowing some players access to incomplete games. Major studios have begun doing this, with Mortal Kombat 1 being offered at an increased price to play it three days earlier than anyone else.
This practice reduces pressure on developers and increases the available time for games to make money.
There is no question now that videogames are one of the most expensive forms of entertainment in the world, and as graphical power increases, stories become bigger and more spectacular and publishers look to reach more and more consumers, budgets for videogames, like movies, will continue to rise.
[Image – Steam]
