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Destiny Will Cost Activision $500 Million

When Bungie broke away from Microsoft, many expected big things from the studio’s first multiplatform release. At the time, even the most ambitious estimates wouldn’t have pegged the developer's team-up with Call of Duty publisher Activision to cost $500 million, though.

Activision CEO Bobby Kotick confirmed the price tag in a presentation at the Milken conference in Los Angeles last week. Activision later confirmed to Reuters that the number is correct, but includes the full scope of expenses related to the project, and not just development costs.

Of course, when you think about the 10-year deal that Activision and Bungie have signed and the marketing muscle the publisher is ready to leverage, it becomes easier to understand how the numbers add up. CEO Bobby Kotick has promised that Destiny will be the biggest new IP launch in history, expecting that it will be the company’s next billion dollar franchise (joining Call of Duty and Skylanders).

Activision will be reporting its first quarter financial performance later today. The company announced Call of Duty: Advanced Warfare, the first developed by Sledgehammer Games on the series new, three-year production cycle.

For more on Destiny, you can read a recent hands-on preview of the three different classes and our summary of five features that make the game stand out in the pack. You can also check out a gameplay video of cooperative play and a new batch of screenshots.

[Source: Reuters]

 

Our Take
Activision’s plan for Destiny is ten years long. The $500 million isn’t comparable to existing development budgets, because few games (especially in the console space) have that kind of life cycle. It is also crucial to understand that the $500 million includes marketing, promotion, packaging, and other related costs as part of bringing the game to market.

It would be more appropriate to compare Destiny’s production expenses to that of an MMO. The $500 million budget is likely to be recognized over a number of periods (and decrease as time goes on, with spikes around major content expansions).

The cost of games is certainly going up. But in many regards, Destiny isn’t like most of what we’ll be seeing on consoles this year.

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