Publishers are spending more and more money on their blockbusters, which goes not only for development, but also for marketing. A worrying trend comes from documents from Britain’s Competition and Markets Authority (CMA for short), which recently blocked Microsoft’s nearly $69 billion acquisition of Activision Blizzard.
The CMA documents cite a report by market research firm IDG. According to her, the development costs of modern AAA games, recently greenlit and scheduled for 2024-2025, range from over $200 million. However, five years ago it was an average of $50 million to $150 million. For example, survival horror Callisto Protocol as of December last year, it was worth $162 million.
The report also lists the latest payments Call of Duty, whose development budget is expected to exceed $300 million. Activision had to state that due to the amount of content it can’t rely on one main studio for development, but instead requires 1.5 studio heads for each CoD installment. what he makes more and more use of external providers. Rockstar Games’ new Grand Theft Auto is expected to have a budget of over $250 million.
But then you have to consider marketing and promotion costs. Unspecified publishers state the following: The first publisher said pre-launch development costs were $164 million and marketing costs were $55 million. Another publisher’s budget ranges from $80 million to $350 million to develop and market the biggest games, reaching $310 million. For a third publisher, the cost of the latest titles ranges from $110 million to $350 million, and for a fourth publisher, $90 million to $180 million for development and $50 million to $150 million for marketing. Certainly the publisher’s most expensive game cost $660 million to develop, with a marketing budget of $550 million..
The CMA views this as evidence that it is unlikely that any other company will be able to generate revenue from Call of Duty for the foreseeable future. But at the same time shows how unsustainable big budget game development has become. It is also another scarecrow for players’ wallets – there may be further price increases for games or subscription services.
The huge increase in the development budget was confirmed by Shuhei Yoshida, who is in charge of independent developers at the PlayStation. He recently revealed that God of War 3 cost $44 million to develop, but currently God of War Ragnarok for PS5 and PS4, it cost nearly $200 million..
Given all this, it’s no surprise that publishers don’t want to take the risk of investing in new brands. This is very risky for him, given such huge budgets.
Source :Indian TV
