When it was revealed that it would cost around $1 billion to make GTA 6, several gamers dropped their jaws in awe. Have you ever wondered how much it cost to make games like Horizon Forbidden West or The Last of Us 2? Well, how much it cost to make games is one topic that has always been shrouded in secrecy.
The best that gamers knew were unconfirmed gossip—or estimates like the one from ex-PlayStation boss Shawn Layden. Thanks to the ongoing case between Activision Blizzard and the United States Federal Trade Commission (FTC) we now have solid figures.
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Just a recap for those that have not been following the development. Microsoft proposed to buy Activision for $69 billion which would have been the biggest game acquisition in history. UK regulators first blocked the deal on the ground that it would hurt competition in the cloud gaming market.
In what seemed like a relief, European regulators gave the deal a nod to go ahead. However, Microsoft is now dealing with American regulators. For a full backstory on the development of the deal, click here.
At this point, you may be wondering what a hearing has to do with how much it cost to make games. Well, no truth is hidden from the eyes of the law. Thanks to a clerk that did a poor job redacting a document that contained the exact cost of making some of our favorite titles, the once confidential information is now in public view.
Poor redaction reveals how much it cost to make games
In the hearing involving the Microsoft Activision deal by the FTC, Xbox and PlayStation had to present confidential documents. A clerk redacted some part of the document using a black marker but the words were still legible through the court’s official scans. The documents were withdrawn hastily from public view, but journalists had seen too much already.
From the leaked document we now know how much and how long it cost to make games exclusive to PlayStation consoles. Horizon Forbidden West cost $212m, involved a team of 300, and took five years to make. The Last of Us Part II cost $220m and the development time was longer. Interestingly, marketing costs are not part of these figures.
With these figures, it is easy to see that the cost of making games is almost Identical to the cost of making Hollywood movies—and even surpass some if you exclude marketing and advertising. For example, Black Panther 2 production cost alone was $200 million.
It gets more interesting when you look at the revenue from some of these games. We now know that Call of Duty (COD) accounts for $1 billion in PlayStation’s revenue, thanks to the poorly redacted documents. Also, about a million PlayStation owners only play COD while 13 percent spend 30 percent of their time on the game.
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It is shocking to see that the cost of making games have been ballooning. Without companies like Sony and Microsoft investing heavily in studios, it would be almost impossible to get AAA games.
How consoles owners are jostling to make games exclusive to their platforms
The console war between PlayStation and Xbox is far from over. Microsoft which has hitherto been lagging behind in the competition recently went on a spending spree to acquire studios that would make games exclusive to Xbox. After the 2023 Xbox games showcase, it was clear that Microsoft is now ready to compete against Sony’s PlayStation.
Making games exclusive to a platform has been a way of forcing gamers to buy a particular console—and the data shows that it has been profitable. All of PlayStation’s exclusive games have sold between 8 and 10 million copies. That’s a minimum of $800 million in revenue per game.
“If it was up to me, I would love to get rid of the entire [concept of] exclusives on consoles, but that’s not for me to define, especially as a low-share player in the console market,” said Microsoft’s boss Satya Nadella while testifying at the FTC hearing on June 28, 2023. “I have no love for that world.”
No matter how much Nadella claims he doesn’t like exclusivity, spending $69 billion on Activision Blizzard and King is bound to put Microsoft in a dominant position on mobile and consoles and make games under the Activision catalog exclusive to Microsoft.
The document also showed that Microsoft was plotting to acquire Supermassive, Niantic, Bungie, Square Enix, Sega, and many more. Another interesting reveal from the poorly redacted document was how Microsoft acquired ZeniMax Media, the parent company of Bethesda for $7.5 billion, to stop Sony from paying the company off to make Starfield exclusive to PlayStation.
The leaks from the hearing show Microsoft is tired of being number three behind Nintendo and Sony, and are willing to do anything possible to grab more market share in the gaming industry. To us, that is the true cost of making games.
Between Sega, Square Enix, and Supermassive, which do you think will be easier for Microsoft to acquire? Share your thoughts in the comment box below.
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