Andy Gavin, who co-founded Naughty Dog with Jason Rubin in 1986, is a surprisingly prolific LinkedIn poster who recently shared some memories about the company’s early days. This week he reported on the state of the studio’s finances over the yearswhich details how much it cost to make some of Naughty Dog’s early games and how these increasingly high numbers led studio heads to agree to a takeover of Sony in 2000.
“Our early 80s games cost less than $50,000 each to make,” Gavin wrote. “Rings of power (’88-91), saw budgets increase to about $100,000, but returned slightly more than after-tax profits in 1992. In 1993 we rolled out that $100,000 Rings to a self-financed one Away from the warrior. But Crash Bandicoot (’94-96) cost $1.6 million to make. By the time we got there Jak and Daxter (’99-01) the budget exceeded the $15 million mark. In 2004, the cost of AAA games dropped Jack 3 had risen to $45-50 million – and they have continued to rise ever since.”
All this led to the acquisition of Sony. As Gavin put it, “the stress of independently financing these skyrocketing budgets was enormous. (…) Selling to Sony wasn’t just about securing a financial future for Naughty Dog. It was about giving the studio the tools to keep making the best games possible, without being crushed by the weight of skyrocketing costs and the crippling fear that one mistake would ruin everything.
Gavin’s post has sparked some discussion in the comments, including from others who work in the games industry. James Marcus, a senior artist working on Split gate 2 for 1047 Games replied: “It’s sad that costs have increased so much. This has created a space where far too many developers are taking fewer creative risks or selling to large companies to avoid going bankrupt after a potentially failed product.”
There are, of course, potential downsides when studios are acquired by major companies like Sony. Namely restructurings and layoffs (Naughty Dog was also affected by Sony’s 2024 round of budget cuts). For Firewalk Studios, the studio that made Treatythe 2023 acquisition by Sony didn’t seem to do much at all to help the future of the game or studio. After all, that studio was unceremoniously closed shortly afterwards Treaty launched. So a bit of a mixed bag when it comes to being acquired by Sony. However, the rising cost of AAA video games is an undeniable reality.