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"Not sustainable": Developers across the industry react to The Last of Us Part 2's $220 million budget

Spyxos

Member
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Earlier this week, poorly redacted court documents revealed the time and budget allocated to Horizon Forbidden West and The Last of Us Part 2. Both games took more than five years and more than $200 million to develop. It took 300 employees working from 2017 to 2022 to make Horizon Forbidden West at a cost of $212 million, while Naughty Dog peaked at 200 studio employees as it spent $220 million over 70 months.

It's rare that we get this kind of detail on the cost of game development. Earlier this year, news that the poorly-received Forspoken had cost $100 million shocked players. That these two games cost more than double that is no great surprise, but the response to the exact figures has rippled across the industry, with developers helping to put some of those numbers into perspective.

On the one hand, there are the AAA developers. Former Psychonauts 2 developer Lisette Titre-Montgomery noted that Sony spent 220 million over six years to make The Last of Us Part 2 before they saw a single penny in return, claiming that "game teams this size for this long are Not. Sustainable." Former Capcom and Xbox producer Shana put that in further perspective, pointing out that that means the studio was spending $15,000 a month per employee on average – which doesn't necessarily translate to salaries but rather reflects headcount costs – at a total rate of $3 million.

That's understood to be a pretty standard rate in the US, and it highlights why games sometimes can't just simply be delayed - the cost of doing so quickly mounts up. Elsewhere, Bungie producer Nigel Davis points out that this is actually below the market rate for tech jobs, claiming that "almost everyone working in games is taking a pay cut. If we were to work in other tech fields we'd make much more."

Elsewhere, developers have discussed the additional costs not associated with those development figures. Third-party contracts are unlikely to have been included in official headcounts and development budgets, but may number in the several hundreds. Marketing budgets - sometimes as expensive as the development of the game itself - are also not included here.



On the other side of the equation are the indie developers, many of whom would love just a tiny slice of those AAA budgets. Chananda Ekanayake, game director on dating sim Thirsty Suitors, said "$200M+ development budget of a AAA game to indie scale is wild!" Former Vlambeer developer Rami Ismail said that "I'd need a tenth of that to fund 20-30 incredible indie games by super cool devs around the world." That sentiment has been shared a lot elsewhere, with many indie devs suggesting that a fraction of a percent of Naughty Dog's budget could be transformative for their careers.

Much of the conversation also revolves around the value to be found in those bigger titles. For example, the work that AAA studios can do around accessibility is significant. But as major publishers start to warn of longer, more expensive dev cycles, there are certainly questions over how much more these budgets can balloon.

 

adamsapple

Or is it just one of Phil's balls in my throat?
"I'd need a tenth of that to fund 20-30 incredible indie games by super cool devs around the world." That sentiment has been shared a lot elsewhere, with many indie devs suggesting that a fraction of a percent of Naughty Dog's budget could be transformative for their careers.
Well of course, that's the primary difference between a self-funded indie developer and a mega-publisher backed first party studio.
 
On the other side of the equation are the indie developers, many of whom would love just a tiny slice of those AAA budgets. Chananda Ekanayake, game director on dating sim Thirsty Suitors, said "$200M+ development budget of a AAA game to indie scale is wild!" Former Vlambeer developer Rami Ismail said that "I'd need a tenth of that to fund 20-30 incredible indie games by super cool devs around the world." That sentiment has been shared a lot elsewhere, with many indie devs suggesting that a fraction of a percent of Naughty Dog's budget could be transformative for their careers.

I'd take one TLOU over a million indie dating sim shovelware tripe releases, thank you.

I'm sure these indie devs would love to see this kind of funding but when the games you wanna make have such niche appeal, it should be no surprise publishers aren't knocking down your door to give you hundreds of millions of dollars.
 

ToadMan

Member
Not sustainable?

Surely this is exactly a model of sustainability.

TLOU is a massive selling game which has also crossed into a popular miniseries creating a new multi-media IP.

That’s a model others are also using - Nintendo and the Mario movie, MS with Halo…. Ok not all are as successful as Sony, but the model can work if they’re capable.

And content of the quality of TLOU attracts consumers to the platform where they spend more money on other stuff.

So that $220m is a lot, but it’s the cost of doing the kind of business Sony does. It would be a lot less sustainable for Sony not to make content like TLOU.
 
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Doom85

Member
Ryan Reynolds Wtf GIF


Apparently by June of last year, TLOU Part 2 has sold 10 million copies. “Not sustainable”, my ass.

Look, indie games are cool, but big AAA games are what move system sales generally. I don’t see many indie movie directors crying about blockbusters having larger budgets than them, probably because they understand indie films have more of a niche audience. Even A24, for how successful they’ve been, their most successful films still technically make less than many blockbusters. Different audiences generally, different numbers, but again I don’t see A24 crying about this because they probably understand the business. Some of these game developers should try to understand that too. Sony or anyone else isn’t handing you money purely because you went, “well, that’s not fair!”
 

Chukhopops

Member
LoU is highly profitable for Sony - not sure what is not sustainable in that...
The game made Sony over a billion dollars minimum the first year. It's highly sustainable.
You’re missing the point, just because it’s been a success this time doesn’t mean this kind of budget and development time can be sustained over different projects and teams.

To me the biggest impact is you need something really safe from an IP and gameplay perspective to break even on this kind of initial cost. And if you sell below expectations for any reason you’re down hundreds of millions - not necessarily a problem for Sony but would be for a third party dev.
 

GHG

Member
"Not sustainable" say the developers not invited to work on projects like this.

If as a developer you only want to work on indie games and/or games with smaller sized teams then that's absolutely fair, but saying bigger budget games are not sustainable makes no sense considering the success many of them have had.

And if you sell below expectations for any reason you’re down hundreds of millions - not necessarily a problem for Sony but would be for a third party dev.

If you're going to throw that kind of money at a project (in any industry) then you better make sure you have processes in place to ensure the final product is up to scratch. Anything else is negligence.
 
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You’re missing the point, just because it’s been a success this time doesn’t mean this kind of budget and development time can be sustained over different projects and teams.

To me the biggest impact is you need something really safe from an IP and gameplay perspective to break even on this kind of initial cost. And if you sell below expectations for any reason you’re down hundreds of millions - not necessarily a problem for Sony but would be for a third party dev.

It would be a problem for an independent 3rd party studio, yes. That's why there are very few that even exist anymore, who don't already have some massive GaaS game they're rinsing revenue in MTXs from.

Big third-party publishers are in a similar situation as Sony, in that they can offset the costs (and thus spread the risks) of these big AAA games against the money they print from their big MP Live Service games and MTXs.

It's why MTX revenue now far exceeds revenues from upfront game sales.

So yeah, market consolidation, MTXs and GaaS makes this model very sustainable; and in fact very profitable.
 

Dr_Ifto

Member
You’re missing the point, just because it’s been a success this time doesn’t mean this kind of budget and development time can be sustained over different projects and teams.

To me the biggest impact is you need something really safe from an IP and gameplay perspective to break even on this kind of initial cost. And if you sell below expectations for any reason you’re down hundreds of millions - not necessarily a problem for Sony but would be for a third party dev.
Do you think Sony would give 200m budget to something unproven? When it's proven, a 200m budget is safe for Sony.
 

Xyphie

Member
It's perfectly sustainable. Just means every big budget game will be a very safe focus-tested experience based on an existing IP and formulas made by a large publisher. Basically every game is just going to have to be the equivalent of a Marvel movie if it has that kind of budget because no one is giving your indie game about gay cowboys $200M. Which is fine, we need a few big dumb tentpole titles.
 

Yoboman

Member
You’re missing the point, just because it’s been a success this time doesn’t mean this kind of budget and development time can be sustained over different projects and teams.

To me the biggest impact is you need something really safe from an IP and gameplay perspective to break even on this kind of initial cost. And if you sell below expectations for any reason you’re down hundreds of millions - not necessarily a problem for Sony but would be for a third party dev.
$200m budget is 3.3 million units at $60. Naughty Dog games do that day one and have for a long time

Sony have built their studios into this kind of busget being sustainable

Same as Rockstar could easily put out a billion dollar game development and expect to be profitable just on brand alone

Nobody is giving that budget to a team of nobody's
 

Chukhopops

Member
If you're going to throw that kind of money at a project (in any industry) then you better make sure you have processes in place to ensure the final product is up to scratch. Anything else is negligence.
I agree but imagine starting a project now and having to guess what will be the market expectations in 2028, looks terrifying to me.

Take Suicide Squad, it doesn’t necessarily look worse than other GaaS but it was revealed at a point where GaaS fatigue became prominent. Now they have to eat another full year delay, retool their mechanics, tell devs to redo things they developed (with a likely significant human cost) and try to salvage the initial bad impression. It may entirely kill the developer if it doesn’t sell well in the end.

I think that’s the point of the article more than the specific cost of TLOU part 2.
 

ARK1391

Member
I think people are forgetting that marketing budgets are included in these figures....there was a ton of marketing for both of these games and that is not cheap.
 

OceanGaming

Member
every big budget game will be a very safe focus-tested experience based on an existing IP and formulas made by a large publisher.
pepo21.gif


At 220 million, TLOU made it's money back on it's opening weekend.

These devs sound salty.

Not with the marketing budget, no.

......

The problem here is, when you adjust your budget that only 5+ million sales at 70 dollars are just enough for that product to become an actual profitable product; one miss will brick you so have to play SUPER SAFE.

What about something like Control or Plague Tale?

They were rumoured to have budget of about 25-35 million USD. And have sold decent amount, to a point where they offer better return if successful.
I prefer good AA to standard AAA games honestly.
 
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hinch7

Member
Always a place for high profile and budget games. Unless quality falls off a cliff, there will be an interest in these big blockbuster titles.

As for the dev.. indie games don't garner a fraction of sales and interest, never mind indie platformers. And on top the budget and scale of development completely different. So apples and oranges.
 
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I didn’t enjoy last of us 2 story wise but I’d take it any day over another indie 8bit side scrolller…

Keep at it sony

What about something like Control or Plague Tale?

They were rumoured to have budget of about 25-35 million USD. And have sold decent amount, to a point where they offer better return if successful.

8 bit indie side scrollers you could make 800 of them for this budget.
 
Although it was part of the discussion, I feel like OP should have omitted the indie dev’s tweet. It steers the conversation into the wrong direction because too many people here look down upon independent games.

This should be more about AAA games being as big of a gamble as releasing a Hollywood blockbuster film…And the video game usually has no toy merch or other lanes of profit to draw upon, unlike movies.
 
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lordrand11

Member
If the latest sales figures are accurate, they've made about $700,000,000 off the game

A $480,000,000 profit sounds pretty sustainable to me
You've forgotten that the budget there is just for the development by the studio, you still need to factor in advertisement, and other overhead costs that more than likely bloated that higher. Meaning less earned.
 

Gorgon

Member
I think people are forgetting that marketing budgets are included in these figures....there was a ton of marketing for both of these games and that is not cheap.

Based on the original post, they're not:

"Marketing budgets - sometimes as expensive as the development of the game itself - are also not included here."
 

ReBurn

Gold Member
The premium $70 AAA model as it exists now isn't sustainable. If it weren't for the cash flow from getting 30% of every third party game sold on PlayStation Sony wouldn't be able to invest $200m over 5 years into creating these games. That's why Jim Ryan doesn't want games day 1 on PC or streaming services and why he spends so much on timed exclusivity. He has to protect the business model.

The problem is that the return on investment is becoming too far out and, even though more people are gaming, people are buying fewer games than in past generations. That's why Sony is chasing GaaS money. To shore up cash flow if the premium sales bubble bursts. Or at the very least subsidize the premium model.
 
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