Activision to Spend $500 Million to Develop and Market Destiny

[Alex Co]

Activision to Spend $500 Million to Develop and Market Destiny

Activision CEO Bobby Kotick has revealed that the publisher intends to spend $500 million in developing and promoting Bungie's sci-fi shooter Destiny, with analysts proclaiming that this would be the highest sum spent on a single game.

Just how big of a business are games these days? It seems the market is big enough that spending half a billion dollars for a single game is now feasible. During the Milken conference in Los Angeles last week, Activision CEO Bobby Kotick has revealed that the publisher intends to spend $500 million in developing and marketing Bungie's upcoming game, Destiny. This budget which is even bigger than some of Hollywood's, will include "marketing, packaging, infrastructure support, royalties and other costs," an Activision spokesperson said. In the conference, Kotick mentions, "If you're making a $500 million bet you can't take that chance with someone else's IP...The stakes for us are getting bigger." In case you didn't know, Kotick is referring to the deal Activision has signed with developer Bungie back in 2010 that gives the publisher exclusive distribution rights and significant control over the franchise.

According to an Activision spokesperson, "Bungie's very ambitious plan is designed to unfold over a 10-year period...The depth of creative content, scope and scale is unprecedented and is required to bring Bungie's vision to life." However, don't expect the same budget for Destiny's sequels, with the spokesperson adding that the investment in the shooter's next-gen engine and a "robust backend infrastructure are upfront expenditures that should reduce future product development costs." The spokesperson finishes by saying Activision thinks that "Over the long term, we expect the ultimate product costs to be roughly in line with other Triple-A titles."

Analysts are saying that the $500 million budget would likely be a record spent on a single game, especially one that's a brand new IP. Based on the budget, it's estimated that Activision has to sell about 15-16 million units just to break even (at $60 per game), which is no small feat even for an established franchise. Sterne Agee analyst Arvind Bhatia muses, "It's a head scratcher...For brand new IP, it's tough but it could post a big surprise." Bhatia estimates Destiny will sell eight million units, which is a figure I assume Activision won't be content with.

Do you think Destiny will be worth the half billion budget Activsiion is allocating for it? And for Activision's sake, will it be the franchise to takeover Call of Duty and its year-by-year lagging sales?

Destiny will be out this September 9 for the PS3, Xbox 360, PS4 and Xbox One. In the meantime, go check out the shooter's latest gameplay trailer entitled "The Devil's Liar." [http://www.escapistmagazine.com/videos/view/trailers/9118-Destiny-Gameplay-Trailer-The-Devils-Lair]

Source: Reuters [http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506?feedType=RSS]

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[seditary]

I expect a Jimquisition on this lol.

I'm laughing so damn hard already.

 

[Legion]

While I have no doubt it will be popular, I am not so certain it will be that popular. I wouldn't be entirely surprised if this was the game that made publishers realise that games are getting far too expensive and are not cost effective with their current model.

As for me, I have no interest in the game from what I have seen. It's got some amazing concept art and looks nice but the gameplay doesn't seem particularly interesting. But that could just be my growing dissatisfaction with shooters. I feel like I have played them all before.

 

[Nouw]

The hype is real $$$

The game looks neat but I still don't really know what kind of game this is. I'm getting Borderland-y vibes, am I right in thinking so?

 

[Roofstone]

I wouldn't be entirely surprised if this was the game that made publishers realise that games are getting far too expensive and are not cost effective with their current model.

I actually kinda hope that happens.

It might be mean, but I hope that if they spend this much it'll crash and burn, horribly. Just so developers realize that toning stuff down is not necesarily a bad thing.

 

[Tanis]

If you bother to READ the article, it states that part of that cost is for developing the game engine and the back-end (read: multi-player/severs/etc) stuff.

It's not 500 million on JUST the game.

That 500 million is being used to create stuff that can then be used in OTHER games.

 

[mirage202]

At first I was just entirely uninterested in Bungies new COD/Halo wannabe.

Now I actively hope it fails in a spectacular fashion that sends Activision reeling.

 

[Hairless Mammoth]

Oh Great. Here comes the Destiny Mountain Dew, Destiny Dorritos, and Destiny Slurpies, along with the obnoxious banner and tv ads. Bring it on, Bobby, because I lost what little interest in this game I had when I head it's an MMO. The only thing you can do to me is scratch away my sanity, but you'll never get my moolah.

Also have fun Activision, when the sales don't look as good as you thought they would. The bro-shooter crowd probably still thinks this is the real continuation of Halo. Then some of some of them will play it and find the lack of beginning game versus multiplayer and MMO mechanics and tell everyone else to stick with Halo 5, Call of Duty, or Titanfall.

This might be a great game in the eyes of many people. But Activision's really risking it here since most MMO style games with big budgets have underperformed in recent years.

Plus what's with companies getting overhyped with their own MMOs now, too? Oculus wants a billion users in a Rift based Facebook MMO and now Bobby and Co. think Destiny is pure gold.

 

[Drummodino]

That... that is a lot of money. They must really be hoping this is the next big series that will take the next gen by storm. Honestly though, I just don't see that happening. The game looks pretty good as some kind of Halo/Borderlands combination, but is it the next big title? I just don't see it.

Maybe I'm just burnt out on the whole FPS over-saturation, but I can't imagine this having the kind of success they're hoping for.

 

[J Tyran]

This might be a great game in the eyes of many people. But Activision's really risking it here since most MMO style games with big budgets have underperformed in recent years.

This game is more like Borderlands with a persistent world, now the thing is Borderlands 2 did fairly well but not $500 million well. Is there such a huge market for a game like this? No idea but as you say its a big risk, it is deferred somewhat by the fact the technology they developed will be used for years to come though. Things like the engine and network infrastructure and code could outlast this entire console generation.

 

[Ed130 The Vanguard]

Question.

How much is going towards development compared to marketing?

What's the bet it's less than 10%?

 

[VanQ]

I expect around $499 million of that money will be for the marketing and $1 Million to development for the 4-6 months following release so it looks like they cared, then they'll stop, the playerbase will dwindle and then it will go free to play. And by that time the apologists will be screaming at anyone that complains about the 10 year plan that they should just be grateful that they had a game to play in the first place.
But seriously, who in their right mind starts talking about sequels to an MMO that has yet to be released? That's suicide to the experienced MMO player's ears, as no one wants to spend time and effort building up a character that won't be playable once the sequel is out.

 

[Arnoxthe1]

Now I actively hope it fails in a spectacular fashion that sends Activision reeling.

Yeah, and screw the developers too, huh? They don't need to get paid at all. And screw other players as well because if I'm not happy about a game, then no one should be.

 

[Fdzzaigl]

It damn well better have more to it than defense missions against waves of enemies and a bunch of instanced content.

Also, no PC release for a genre (MMO) that has traditionally always been on PC, while spending that much money. Seems like a risky call. When did console players ever show so much interest for MMO's?

 

[shirkbot]

If you bother to READ the article, it states that part of that cost is for developing the game engine and the back-end (read: multi-player/severs/etc) stuff.

It's not 500 million on JUST the game.

That 500 million is being used to create stuff that can then be used in OTHER games.

It doesn't matter that it can still be used later, that' still a lot of money (it could comfortably fund a few hundred human lifetimes) to be investing in developing a video game, especially at a time when many publishers are complaining about shrinking profit margins to justify DLC and other micro-transactions. I'd congratulate them for thinking about the future, but this is still kind of short-sighted in the sense that it doesn't do anything about the rest of their stagnating IP, production model or pricing schemes.

 

[CriticalMiss]

Based on the budget, it's estimated that Activision has to sell about 15-16 million units just to break even (at $60 per game)

Don't worry, they will just chop some content out and sell it as DLC. Throw in a few microtransactions for whatever the equivalent of a mount or pet will be and they won't need to sell nearly as many copies. It's still a crazy high number just to break even but if they are playing the long game and using some of the assets built for other projects (engines and infrastructure etc.) then it's probably not going to make them lose much sleep if they don't sell 15 million units overnight.

 

[Zhukov]

That's a lot of money for a Borderlands knock-off.

Hurr hurr.

Seriously though, it doesn't even look that great. I've seen better animation in previous gen games.

15million+ copies seems optimistic, even for a sci-fi shooter by Bungie that is going to get marketed to high heaven.

 

[mirage202]

Now I actively hope it fails in a spectacular fashion that sends Activision reeling.

Yeah, and screw the developers too, huh? They don't need to get paid at all. And screw other players as well because if I'm not happy about a game, then no one should be.

Bungie developers have said screw me for over a decade chasing the console FPS dragon.

Other players care as little for my tastes as I care for theirs.

I'm a gamer and a consumer, I'm human and selfish when it comes to games I want. I'm not an HR manager or a Welfare worker, their jobs are not my concern. My concern is the constant stream of generic FPS and MOBA games coming out of mainstream developers. They do not give a damn about my gaming tastes, why should I give a damn about the consequences of their choices?

Now that is out of the way, please tell me where I said nobody should be allowed to be happy about this? If they are so be it, I'm not doing to go murder their granny or kick their dog for it. I want Activision to be punished for their avarice, nothing more, nothing less.

If you feel the need to white knight for people that care nothing for you beyond the level of your disposable income, or if you feel the uncontrollable urge to dispense social justice on behalf of those that aren't even aware of your existence then again, so be it. I'd just advise that you do it somewhere constructive, where it is warranted. I have my opinion, you have yours. Your response to mine is, oh right: "I don't like what you said about what I like therefore everyone who doesn't like it shouldn't be able to say so". Or would that be me following your example, making assumptions and putting words into your mouth?

 

[alj]

It sounds harsh but i hope this fails, i would feel bad for all the staff that have worked hard on it and all the support staff that would lose out on jobs etc. Hopefully it would be short term pain for long term gain and this changes the toxic development practices in the main stream industry.

As i always say you cannot make a game a success by you just wanting it to be so, no matter how much money you spend on it. Look at Star Wars TOR a very expensive game well marketed and excluding the terrible free to play model a very well designed game yet it is nowhere near as successful as they needed it to be.

A MMO is usually the wrong type of game for consoles, not putting this on PC is a bad call IMO, as a general rule you don't see the take up of this kind of thing on console.

 

[Arkham]

I expect around $499 million of that money will be for the marketing and $1 Million to development for the 4-6 months following release so it looks like they cared, then they'll stop, the playerbase will dwindle and then it will go free to play.

It's already going to be "free to play" in that it's intended to sell as a boxed product without a subscription fee. Microtransactions are mentioned somewhere in their contract with Activision. The red hover bike preorder skin is ostensibly going to be sold later in this fashion, so there are likely to be cosmetics.

The more I read about the game the less convinced I am that it qualifies as an MMO. It's more like an FPSRPG with dedicated servers and endgame. It seems to have more in common with Diablo III than World of Warcraft.