The CMA has discovered that modern day video game budgets are ballooning to as much as $ 1 billion, including both game development at marketing.
IGN reported on the CMA’s findings, citing a report by market intelligence group IDG. We’ll share the actual phrase the CMA used so you can interpret them as you see fit.
On page 309 of the document, they state this:
“A report by IDG submitted by a third party dated August 2021 notes that development budgets are reaching unprecedented ranges. The report observes that while 5 years ago most AAA console/PC releases had development budgets between $50-150 million, on average, games that are greenlit today, with a potential release in 2024-2025, are being approved for development budgets of $200 million or higher.
Also, the report says that some AAA franchises like CoD have development budgets already exceeding $300 million, and the next GTA and other future tent-poles are also expected to hit $250 million or higher.
Activision is also quoted in this report saying with reference to CoD: ‘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.”
Video games that released in 2016 include:
- Overwatch
- The Doom reboot
- Battlefield 1
- Uncharted 4: A Thief’s End
- Final Fantasy XV
- Gears of War 4
- The Witcher 3: Wild Hunt
- Pokemon Go
In contrast, here are a few releases from 2021:
- Deathloop
- Metroid Dread
- Back 4 Blood
- Monster Hunter Rise
- Hitman 3
- Forza Horizon 5
- Marvel’s Guardians of the Galaxy
- Far Cry 6
Today, we are at a point where Sony can report high sales numbers for their first party games, and yet still feel compelled to bring those same games over to PC. All of that is no longer enough for game companies to recoup their investments in making these bigger games.
Now, the IGN’s $ 1 billion figure also came from the CMA’s report. The CMA shared responses from some developers, that corroborated the IDG’s findings. On pages 309 to 310, CMA shares the story of publisher number four:
“A fourth publisher submitted that the costs related to developing and regularly releasing new titles can vary significantly depending on the game type or business model of a particular studio. It provided an example that for one AAA game the development budget value could range between $90 million and $180 million, whereas the marketing budget could range between $50 million and $150 million.
This publisher also submitted that for one of its major franchise’s development costs reached $660 million and marketing costs peaked at almost $550 million.”
Unless this happened to have been Nintendo, this publisher must be one of Activision Blizzard’s peers among the larger third party publishers. That could range from long established game companies, like Electronic Arts and Ubisoft, to nascent upstarts, such as Focus Entertainment and Embracer Group.
In this environment, it is no surprise that game companies are now making choices and decisions that are unpopular with their own customers, the gamers. This isn’t just about raising game prices to $ 70, and chasing money making trends like live service games and battle pass. This also explains the large number of games that launch with performance and graphics issues. It also not as easy to see, but it also explains the number of games that just keep getting delayed. That latter category includes no less than Nintendo’s The Legend of Zelda: Tears of the Kingdom.
