On Wednesday, the UK Competition and Markets Authority (CMA) blocked the Microsoft and Activision Blizzard Merger due to its implications for cloud gaming. Along with fundamentally changing the future of Microsoft and Activision Blizzard, the document released alongside this decision has revealed quite a few details about the increasing financial demands behind AAA games.
In a massive report on the decision, the CMA revealed that some major publishers report their AAA games can cost over $1 billion to make.
According to the report, AAA games that are greenlit now with potential releases in 2024 or 2025 typically receive development budgets of $200 million or higher — Call of Duty has already surpassed $300 million in development costs alone, and the next Grand Theft Auto title will likely require a development budget of $250 million or more. When considering marketing costs, this number can jump to over $1 billion, with one large studio reporting that a major franchise’s development cost $660 million and marketing cost nearly $550 million.
These costs demonstrate a significant increase from five years ago, when most AAA games had budgets between $50 and $150 million.
The CMA’s ruling, citing a report by market intelligence group IDG, also revealed details about the increasing development demands for new Call of Duty titles.
“We have to make so much content for Call of Duty that we can’t even lean on one lead studio anymore,” Activision was quoted as saying in the report. “Now we need almost 1.5 lead studios for each annual CoD. That kind of bandwidth pressure is forcing us to use outsourcers more and more. I don’t see that changing anytime soon.”
Alongside its insights into the rapidly increasing costs of AAA game development, the CMA’s report also asserts that Nintendo’s platforms aren’t “technically capable” of running Call of Duty despite Microsoft’s confidence. The report also details how Microsoft could potentially make Game Pass more expensive after the acqusition.
Amelia Zollner is a freelance writer at IGN who loves all things indie and Nintendo. Outside of IGN, they’ve contributed to sites like Polygon and Rock Paper Shotgun. Find them on Twitter: @ameliazollner.
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Author: Amelia Zollner