There are major parts of the game development process that are typically kept under wraps and one important detail that game companies rarely reveal is how much it costs to make a game.
Unlike the film industry where a movie’s budget and unsurprisingly the money an actor is paid for their role is one of the first details of a movie fans know about, it’s an entirely different culture for the video games industry.
Apart from the budget team working on a game within a company, we don’t usually know how much it costs a game company to make a game unless the developer or publisher releases that information.
We just know that acclaimed titles such as EA’s FIFA 23 cost a lot as the company paid hefty sums as licensing fees to FIFA, Uefa and many other football associations worldwide for permission to use actual likenesses of the players, stadiums, coaches etc.
However, the ongoing legal battle between Microsoft and the Federal Trade Commission over the former’s Activision Blizzard acquisition has led to Sony revealing details on how much it cost to make The Last of Us Part 2 and Horizon Forbidden West.
Massive production costs
While documents submitted to the court are usually redacted, a poorly redacted document which recently came from Sony Interactive Entertainment displayed the actual costs of the aforementioned PlayStation titles and they’re surprisingly hefty sums.
Sony spent $212 million over a five-year period with up to 300 full-time developers to make Horizon Forbidden West. As for The Last of Us Part 2, the PlayStation company said it took around six years, 200 full-time employees and a whopping $220 million to make the game.
Although the documents have since been taken down from the FTC’s hearing evidence list, The Verge’s Tom Warren was quick to tweet a snippet not long after the documents were initially uploaded.
And while these numbers may not have included the company’s marketing budget for any of the games, Sony’s lawyer said, “Marketing costs for AAA games are large, even for established franchises.”
Video games are as costly as movies (if not more)
It’s also unclear if the numbers include outsourcing costs as it is common for video game companies to outsource certain portions of a game’s development to other companies. If that is indeed the case, then the individual costs of both games are higher than the figures from the redacted documents.
Recently, the UK’s Competition and Markets Authority published a 418-page report, which revealed that game budgets over the past five years have averaged around $50 million to $150 million.
The average cost of games currently in production and slated for release in 2024 or 2025 exceeds $200 million. In the report, one publisher indicated that the total expenses for the development and marketing of one of its games, which remains undisclosed, surpassed $1 billion.
This increased costs could potentially discourage certain companies from taking risks and instead lead them to rely heavily on established properties with existing audiences. Sony on the other hand, is renowned for developing new properties that end up becoming acclaimed titles.