If you kept up with news in December, chances are you heard of the Insomniac Games ransomware leak. Countless documents were released, focusing on upcoming titles, budgets, plans, and even employee credentials. This follows other major ransomware leaks in recent years, like the Capcom leak.
Out of everything that was leaked, one thing stood out above all to me. The recently released Marvel’s Spider-Man 2 cost over $300 million to make. That’s more than every single Spider-Man movie ever released. It’s an absurd amount of money, especially when considering the game didn’t necessarily change that much from the prior two titles, Spider-Man and Spider-Man: Miles Morales. So, why did a game like Spider-Man 2 cost so much? It’s a result of a growing unsustainability in AAA games, and it’s not slowing down.
My instant reaction to seeing the $315 million budget for Spider-Man 2 was simply shock, as I couldn’t believe I had just completed a title that took three times the budget of its predecessor. It didn’t feel that way at all when playing the game, and it has me questioning where all these resources were allocated. I couldn’t tell you what in this game required a budget of this size besides licensing fees or developer pay. Naturally, developer salaries are expensive, and rightfully so. This surely contributed to a large portion of the SM2 budget, with many pointing out just how quickly things can become expensive. However, after seeing titles like Alan Wake 2 be created for reportedly €70 million and Baldur’s Gate 3 for $100 million, it’s outright baffling looking at titles like Spider-Man 2.
This isn’t just an Insomniac problem, though. It spreads across Sony’s portfolio of studios, especially including Naughty Dog, who spent over $220 million creating The Last of Us Part II. Even Guerilla Games spent over $212 million to create Horizon Forbidden West. It’s a common theme at SIE with their single-player experiences, and sooner than later, the practice will catch up to them.
If a company has the money to spend, then the budget doesn’t really matter, right? Unfortunately, this couldn’t be further from the truth. AAA game budgets are investments made to create a final product that will ultimately return profit. These expansive budgets are setting companies up to fail. To break even on Spider-Man 2, Sony has to sell 7.2 million copies. The game will have no problem doing so, with over five million copies sold already. But what happens when someone releases a game with a budget like this, and it doesn’t come close to breaking even?
This will inevitably lead to mass layoffs and reduction of staff at studios, with even the possibility of shuttering an entire company. A game not meeting expectations could mean hundreds of millions of dollars worth of losses. If games are expected to sell 7+ million copies to break even, the industry as we know it is doomed. It’s a clear sign that AAA development is at a critical breaking point.
The AAA budget crisis is spread throughout the entire industry, not just Sony. While this issue is rampant throughout their studios, other companies like Take 2 aren’t much better off. Grand Theft Auto VI, set to release in 2025, has a rumored budget of over $1 billion. Rockstar will have no problem selling millions of copies with such a highly anticipated title, but it sets a terrible precedent for future games. A massive game will come along with a budget that high and fall flat on its face, causing a domino effect on everything outlined earlier in this article.
The answer to a lot of these issues is simply scaling back titles and becoming more efficient with creating titles. That’s not something developers or players seem to want, however. There is a constant demand for more from players, whether it be for better visuals, more lengthy campaigns, or more cinematic cutscenes. There’s a constant tug-of-war battle being fought, as something shorter or smaller is often disregarded and seen as “worse” to players. Ultimately, this has done nothing but contribute to the ballooning costs we’ve seen, with companies like Sony racing to provide the biggest experiences possible.
Dozens of developers have utilized these methods and seen success. Not every game needs to have a 20-hour campaign just to check a box. Insomniac Games released Spider-Man: Miles Morales in 2020, which was a shorter, smaller title focusing on Miles. Titles of this scale are much healthier for the state of the industry, but this still cost Insomniac a whopping $156 million to craft. The title went on to sell 10.2 million units with over $100 million of profit, but the risk can’t be understated. Smaller titles aren’t even enough for some AAA companies to develop without immense expectations at this current time.
A great example of efficiency is SEGA’s Ryu Ga Gotoku Studio and their Like a Dragon series. The RGG team has expertly reused assets to put out titles in the series over the years, leading to incredibly efficient development. Each game uses the same Kamurocho map, yet the developers tweak it depending on the time period and happenings of the game. Yakuza 0, set in the ’80s, features a far different map from Yakuza: Like a Dragon, set 31 years later. Little updates like this have allowed each visit to Kamurocho be its own unique experience.
Developers can leverage methods like these to cut development costs and output titles faster, leading to lower budgets. You can still get amazing experiences out of games that don’t have hundreds of millions of dollars poured into them. More often than not, that is the case. Something has to give, as costs aren’t going to magically lower anytime soon, especially with inflation and higher costs everywhere.
Companies like Sony are looking to transition to live service models, where revenue comes in consistently. It’s not looking great already, with Naughty Dog’s online GaaS title shuttered. Bungie’s revenue is also down 45%, which has led to layoffs and will create a Sony leadership takeover if things don’t change soon. Regardless of single-player, multiplayer, or games-as-a-service, the AAA scene is dire.
Overall, we’re approaching a pivotal moment in AAA games. The solution is complex yet simple. It’s a little bit of toned-down expectations and compassion from players while also lowering the scale and resources needed to create AAA titles. Unless something changes, the entire AAA landscape as we know it could collapse in front of our very eyes.