In recent years, video game budgets have ballooned significantly, with the cost of development technology, and growing ambitions, complicating the art of launching games.
A recent LinkedIn post from Naughty Dog co-founder Andy Gavin revealed a core problem: between the 1980s and early 2000s, games went from costing around USD $100,000 to develop, to costing USD $15 million – and this growth hasn’t slowed. Year on year, games are becoming more expensive to make, particularly as technology change allows for greater and more ambitious scopes, larger worlds, and more hyper-real graphics.
Now, a new court filing has revealed just how much costs have ballooned at Activision, one of the largest game developers in the industry.
As reported by Game File, Activision was recently compelled to provide evidence in a lawsuit alleging the studio, and its Call of Duty franchise, played a role in the 2022 mass school shooting at Robb Elementary in Uvalde, Texas in the United States. The case alleged Instagram content and Call of Duty partially inspired the shooting – which Activision has denied, while expressing sympathy for the victims.
To illustrate the nature of Call of Duty and its popularity, Patrick Kelly, the head of creative for Call of Duty, prepared a statement which outlined just how large the franchise is, and how many people it reaches. Within this, the budget for three separate games and their sales figures were noted, revealing that modern Call of Duty games cost between USD $450-700 million to develop.
Read: Why Naughty Dog was sold to Sony in 2001
Call of Duty: Black Ops 3 (2015) was noted as costing USD $450 million, with a resulting 43 million copies sold. Call of Duty: Modern Warfare (2019) cost USD $640 million, with 41 million copies sold. Call of Duty: Black Ops Cold War (2020) cost a whopping USD $700 million to develop, with 30 million copies sold.
As noted by Kelly, “Treyarch and Raven Software took years to create the game with a team of hundreds of creatives.” The scope of the game meant these resources were necessary – but it’s unclear how the game’s development costs reached such staggering highs, and where Activision goes from here.
In its report, Game File noted that when Naughty Dog’s The Last of Us Part 2 (2020) had its budget revealed at USD $220 million, there was major concern about how large that was, and how sustainable creating games at this cost could be. Now, Activision has revealed it was spending double this money by 2015, and more than triple this money by 2020.
While each Call of Duty game likely made its budget back, given the millions of copies sold, it’s hard to see how this practice is sustainable, and what happens if budgets continue to climb alongside inflation and technology change.
It’s very rare that video game budgets like these are revealed publicly, and the reasons why are certainly clear. Speaking frankly, spending USD $700 million to develop a single game is bonkers – even considering that this includes live service support, and consistent new content. It also carries with it an incredible risk. Should a game be poorly recieved – and it’s happened, in the case of Call Of Duty: Modern Warfare 3 (2023) – even a studio like Activision risks major losses or total collapse on failure.
A new Call of Duty will always be one of the most anticipated games in any given year, but requiring phenomenal, record-breaking sales for each new entry to keep producing these games is unfathomable. It’s also, as former PlayStation boss Shawn Layen recently discussed, unsustainable. In the years ahead, budgets of this size should certainly be under more scrutiny, particularly as studios look for improved stability, following years of aggressive industry change.
