One of the main issues of the industry, the continuous rise of AAA game development costs, seemingly has no end in sight. According to Bloomberg's Jason Schreier, the budgets being "floated around" these days often match or even exceed $300 million:
Exact budgets of video-game productions can be tough to corroborate (more transparency from publishers would be nice!), but the numbers I've heard floating around AAA game dev these days are $300 million or more — sometimes much more! — which I think helps explain the current state of the industry.
Schreier also clarified that those costs refer to AAA game productions made in the United States and Canada. Elsewhere in the world, where labor costs are much lower, budgets can be substantially lower, especially because those costs are mainly driven by developer salaries and overhead. Contrary to popular opinion, they are not caused by executive compensation, which mostly happens through stock options.
To be fair, AAA games broke the $300 million threshold a while ago. Insomniac's Marvel's Spider-Man 2 famously cost around $315 million to make in 2023, tripling the development budget of the previous installment and reducing Sony's margins on a game already burdened by Marvel's royalties.
Call of Duty games have been in a whole other ballpark for a while. Even 2015's Black Ops III from Treyarch cost over $450 million in development, though the figure considers the whole product lifecycle, including post-launch updates and DLCs. The costs only increased from that point onward. For 2019's Modern Warfare, developed by Infinity Ward, Activision spent over $640 million, and the following year, Treyarch's Black Ops Cold War broke through the $700 million barrier. EA's Battlefield 6 doesn't have an official figure, but credible rumors estimate costs north of $400 million.
I recently spoke with Denis Dyack from Apocalypse Studios. The creator of Legacy of Kain and Eternal Darkness openly shared his criticism of the AAA games industry:
The industry needs to change from the standpoint of the way games are funded to the way they're developed. I often see on Twitter or YouTube comments that people are not very excited about big-budget titles, and that there's something structurally wrong with the way games are approved. Games are being approved and directed in such a way that gamers definitely don't want right now. If anything, gamers are getting really frustrated not only by games going in a direction they don't want, but also by having to pay higher prices for them. It's almost like gamers are revolting against these kinds of things.
It makes me sad because the AAA industry and bigger budget titles take years and years to create. Because of that, this sort of extinction-level event that happened a few years ago is likely to go on for two or three more years. The games that are currently in production going in the wrong direction will be able to make minor corrections, but they're not going to be able to make major corrections. So I think gamer anxiety and disappointment are going to continue, and there's not really much people can do about it because these games take so long. From that standpoint, I guess the silver lining is being smaller and hopefully very original, so we can adapt. We're getting feedback now from gamers. I think that's why the indie scene is becoming so vibrant right now, because it can adapt very quickly to what gamers are requesting.
Many AAA game companies are now trying to reduce development costs through the usage of AI tools, though Dyack had a unique perspective on that concept:
As soon as someone says AI is going to save you money, you can almost universally assume that's wrong. Technology makes you more productive, but it takes more time. If you use a lot of AI, you need a lot more people and a lot more time. The idea of laying people off because of AI is antithetical to reality.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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