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The FTC hearing of Microsoft and Activision Blizzard is pulling back the curtain on the top-secret industry
The video game industry is notoriously secretive, capitalizing on hype that makes every announcement a huge surprise. A lot of video game development is kept under wraps in part to keep fans engaged and excited about every piece of news, but the secrecy also comes from how much game development changes, and the importance of studios hiding their work from competitors. We rarely know what it costs to make a video game; We just know that it takes more and more money as games get bigger — possibly “irresponsibly large,” as Bethesda’s Pete Haynes put it last week.
The legal battle between Microsoft and Activision Blizzard with the Federal Trade Commission is pulling back the curtain on this development, in a sense. Court documents from the companies have been largely redacted, but there is usually a lot that can be gleaned from what is not. On Wednesday, a poorly redacted document from Sony Interactive Entertainment showed the actual numbers for both Horizon Forbidden West And The Last of Us Part 2development. And it was expansive: Horizon Forbidden West Cost $212 million over five years with 300 full-time developers. The Last of Us Part 2 Sony said in the documents the cost was $220 million, over about six years with 200 full-time employees.
The documents have been pulled from the FTC’s hearing evidence list as of Wednesday, however The Verge’s Tom Warren tweeted Extract shortly after uploading documents. The numbers likely don’t include Sony’s marketing budget for each game, but the company’s lawyer noted that “the marketing costs of AAA games are significant, even for established franchises.” It is also unclear if the figure includes outsourcing costs. It is common for video game studios to outsource large portions of development. This means individual costs for both Horizon Forbidden West And The Last of Us Part 2 It is likely to be much higher than the numbers given.
The growth rate of video game costs appears to be unsustainable. Earlier this year, the UK’s Competition and Markets Authority released a dossier 418 page report – also related to the merger of Microsoft and Activision – indicates that games over the past five years have averaged $50 to $150 million in budgets. Games currently in production, with release schedules set for 2024 or 2025, cost more than $200 million on average. One publisher suggested that the combined costs of developing and marketing his game, whose name has been omitted, exceeded $1 billion.
Those higher costs may make some companies less inclined to take risks, and more inclined to rely heavily on established properties that already have an audience, such as former Sony Interactive Entertainment CEO Shaun Layden. he said in a 2021 interview with Bloomberg. Sure, sequels and reboots are good, but an industry that takes fewer risks is a boring one — and bad for gaming and development as a whole.
Microsoft’s Federal Trade Commission hearing continues this week with more experts and gaming executives taking action, including Activision Blizzard CEO Bobby Kotick. The FTC is looking for a judge to temporarily block Microsoft and Activision Blizzard’s $68.7 billion merger. The decision will determine whether to pause the deal until the FTC case is concluded.
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