Activision investing $500 million into Destiny, won't break even analysts say
Half a billion dollars. That's the investment you have to pour into a brand new IP, if you want it to be the next Call of Duty-style blockbuster series--even if analysts don't believe the first game will break even.
Activision may be breaking records with the amount of money it intends on spending to develop and promote Bungie's upcoming Destiny. According to CEO Bobby Kotick, the price tag on the upcoming game sits at $500 million. But, that's the investment you have to pour into a brand new IP, if you want it to be the next Call of Duty-style blockbuster series--even if analysts don't believe the first game will break even.
"If you're making a $500 million bet you can't take that chance with someone else's IP," Activision CEO told the Milken conference (via Gamespot). "The stakes for us are getting bigger."
According to analysts, the price tag would mean Activision would have to sell at least 15 million copies to break even. "It's a head scratcher," Sterne Agee analyst Arvind Bhatia told Reuters. The game is projected to sell 8 million units--far short of the amount the company needs to make the venture profitable.
Still, Activision has a ten year deal with Bungie, making it a costly initial investment that could grow over time. The half-billion dollar amount includes marketing, packaging, infrastructure support, royalties, and other costs, as well. Finally, future games in the series will be much cheaper to make. "Over the long term, we expect the ultimate product costs to be roughly in line with other Triple-A titles," an Activision spokesperson said, noting "robust backend infrastructure are upfront expenditures that should reduce future product development costs."
-
Shacknews
replyAndrew Yoon posted a new article, Activision investing $500 million into Destiny, won't break even analysts say.
Half a billion dollars. That's the investment you have to pour into a brand new IP, if you want it to be the next Call of Duty-style blockbuster series--even if analysts don't believe the first game will break even.-
-
-
[deleted]
-
-
-
-
[deleted]
-
Based on the last video that was posted, it looks like they have an overworld map as a loading screen where each region on the map is it's own level.
-
-
[deleted]
-
[deleted]
-
You can play solo but the game always requires an internet connection always.
Strikes for example (30 mins missions with 2 mini bosses and 1 boss) you can do them alone, but some will be harder I guess. Raids are going to be crazy and harder, I read about one being 45 mins just the beginning of it.
-
-
-
-
Bungie has a large team (like 100-200 people?) so that $20 m is more like 200m
-
-
Not so much salary, more like incidentals.
Keep in mind that most expenses for companies arn't directly tied to wages, but tied to workers and benefits. So they're paying a lot more than the wages for things like health care, employee entitlements, the building and infrastructure, etc. -
[deleted]
-
-
-
-
that'd be my guess. You reach a point where, outside of licensing assets, throwing more money at a game provides no real benefit and makes the project that much more difficult to coordinate to boot.
-
$100M for the people that do the work, $200M for the marketing, $200M for the people that fronted the money and did no work.
-
Who are those people who "fronted" the money if not Activision? Are you saying they borrowed development funds?
-
-
I think you mean lend.
-
-
-
-
I hope it was worth it. I for one will be picking this game up to play with friends for sure, on PS4.
-
[deleted]
-
The idea is great on paper, and even the last video looked okay. I hope it succeeds, and I hope it is different enough from the rest of the FPS genre to carve out its own niche.
-
[deleted]
-
-
-
[deleted]
-
It's a donut hole.
-
-
-
-
A hole is actually a hole :P The thing you cut out to make the hole is something else :) Our coffee shop of choice, Tim Hortons (better than Krispy Kreme) calls them Timbits.
But yeah, I know it's not an exclusive thing. It's just that every place else sucks in comparison. Krispy Kreme opened a shop in London, Ontario and it shut down after six months because the novelty of paying 13 dollars for a dozen donuts wore off really quick for people.
-
-
-
-
-
get back to us when they've actually done it
-
-
- someone from last December
-
That's back when they were going to use the Cryengine netcode. But decided that adapting it for the DFM would just be throw away work, they decided to finish up their own netcode that was going to be used for the Persistent Universe instead. That way, they save manhours instead of throwing them away, and they get to bughunt and optimize their own netcode for far longer than was originally planned.
It was a delay yes, but in the long run it'll save time and money, and likely make a better game at release.
-
-
-
-
It's essentially the Assassin's Creed model. First game is a money sink to establish the IP and build the engine, then you release sequels on a tight schedule that each have a lower cost individually, to make a profit.
-
-
[deleted]
-
But it's being made in Poland not the US.
-
-
I hope the music will be good.
-
-
-
GTA is a well established IP
-
GTA is also both a gametype and a brand that isn't traditionally associated with PC. Open-world third-person sandbox-style "murder simulators" (love that term) were basically born on consoles, and the modern GTA series itself cut its teeth on the PS2 and original XBox. While PC ports existed, they were never really the focus of the games.
Compare that to FPSes, which traditionally have been PC, or at least "some console plus PC". FPSes which only release on console have been the rarity, not the norm. Not only that, most of the time the PC sales of those games are a not-insignificant amount of total sales.
Bungie and/or Activision skipping the PC release for Destiny is just an odd choice for an FPS, and even moreso for an MMO. Maybe they figure with the wide swath of consoles they are covering they'll have enough sales to make a tidy profit. Somehow though I can't figure that whatever money they put towards a PC port wouldn't return vastly more in terms of sales.-
[deleted]
-
Another factor is that Bungie is used to developing just for one platform. Going for 4 platforms now is surely enough for them, adding PC to the mix does not make much sense.
It's interesting also that times changed enough now for developers to go console only with MMOs. Back in the day most of the consoles were not connected to the network, now almost all are.
-
-
-
-
-
-
COD: Crysis-Lite
-
God damn it
-
-
This is only surprising because of the lack of transparency of development/marketing budgets in the video game industry, particularly at the top end. When you staff up to hundreds, in the case of something like Assassin's Creed thousands, of developers, you only need to do some back of the envelope math of cost per employee x fulltime staff x full production cycle duration to know that modern AAA games are hundred million dollar affairs without accounting for marketing. Then you add in other fixed development costs - licensing middleware, leasing office space, administrative staff, outsourcing art/audio/ports - and a marketing budget that often dwarfs the already steep development cost, and it is no wonder that AAA development is consolidating around conservative bets. When you factor in that a 3rd party publisher/developer will only see something like $20 from a $60 console game sold at retail, it is a wonder that any AAA game makes money at all.
-
Factor in a new copy being slapped out of the customers hands and a $55 used copy put into it.
-
-
An ad for it came on yesterday and I asked my fiancée "what game does this look like?" and she immediately said "it looks like a Halo ripoff."
lol. Is that what they're going for? -
A franchise tailor-made for dude-bros, purely for the purpose of making lots of money over the next decade. Sounds like a real winner. Hope the dudebros enjoy it, and the investment fatcats get rich.
-
Doesn't it look like star wars though? How it's that a dude bro style?
-
-
