Sony court blunder reveals $200M cost of The Last of Us 2, Horizon Forbidden West
The video game industry is notoriously secretive, playing on hypes that make every announcement a big surprise. Much of video game development is partially hidden to keep fans engaged and excited about every bit of news, but the secrecy also stems from how much games can change during development and the interest of studios in hiding their work from competitors. We rarely know how much a video game costs to make; we just know that more and more money is needed as games get bigger – perhaps “irresponsibly big”, as Bethesda’s Pete Hines said last week.
Microsoft and Activision Blizzard’s legal battle with the Federal Trade Commission is to some extent pulling back the curtain on that development. Court documents from the companies have been largely redacted, but there’s usually plenty to glean from what isn’t. 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 2‘s development. And they were extensive: Horizon Forbidden West cost $212 million over five years with 300 full-time developers. The last of us part 2 cost $220 million, Sony said in the documents, over about six years with 200 full-time employees.
The documents were removed from the evidence list of the FTC hearing as of Wednesday, but Tom Warren of The Verge tweeted a snippet shortly after the documents are uploaded. The numbers probably don’t include Sony’s marketing budget for every game, but the company’s attorney noted that “the marketing costs for AAA games are high, even for established franchises.” It is also unclear whether the number includes outsourcing costs. It is common for video game studios to outsource large parts of development. That means the individual costs for both Horizon Forbidden West And The last of us part 2 is probably well above the figures given.
The rate at which the cost of video games is rising seems unsustainable. Earlier this year, the British Competition and Markets Authority issued a Report of 418 pages — also related to the Microsoft-Activision merger — reports that games had average budgets between $50 and $150 million over the past five years. Games currently in production, with release schedules for 2024 or 2025, cost more than $200 million on average. One publisher suggested that the combined development and marketing costs for his game, whose name has been redacted, exceeded $1 billion.
This increased cost may lead some companies to be 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 Shawn Layden said in a 2021 interview with Bloomberg. Sure, sequels and reboots are fine, but an industry that takes fewer risks is boring – and bad for games and development as a whole.
Microsoft’s FTC hearing continues this week as more pundits and gaming executives, including Activision Blizzard CEO Bobby Kotick, take the stand. The FTC is seeking a court order to temporarily block the $68.7 billion merger between Microsoft and Activision Blizzard. The decision will determine whether the deal is paused until the FTC case is resolved.