Activision Expects Spending $500 Million on Destiny
Bungie's upcoming FPS/RPG is likely to be the most expensive game ever made.
Reuters reports that Activision Blizzard is going to be spending $500 million in order to develop and promote Destiny, Bungie's newest first-person shooter and role-playing game hybrid. This information was revealed by Activision Blizzard CEO Bobby Kotick last week at the Milken conference in Los Angeles. An Activision rep corroborated Kotick's bold claim by confirming that his number was accurate but also contained the marketing, royalties, packaging, infrastructure support and various other costs in order to put the game out.
"Bungie's very ambitious plan is designed to unfold over a 10-year period," an Activision spokesperson claimed. "The depth of creative content, scope and scale is unprecedented and is required to bring Bungie's vision to life."
$500 million is a number that trumps most blockbuster movie budgets and completely overshadows the combined costs of the two most expensive video games ever made to date: Grand Theft Auto V (an estimated cost of $265 million) and Call of Duty: Modern Warfare 2 (roughly $200 million). Just to put things into perspective, Halo 3 cost $60 million to make and Bungie was working on the game seven years ago. Just to break even, analysts claim that Activision would have to sell roughly 15-16 million units of the game, if they were all priced at $60. Given that Grand Theft Auto V has more than doubled this number as of February and reeled in over $1 billion in sales, we do think that it is quite possible for Activision to turn out a rather large profit with Destiny despite its major costs.
"If you're making a $500 million bet you can't take that chance with someone else's IP," Kotick stated at the Milken conference. "The stakes for us are getting bigger."
Mike Hickey, a Benchmark Company analyst, said that "there's no way they would come close to Grand Theft Auto." Hickey suggests that much of Grand Theft Auto V's success is attributed to its history, taboo nature, ongoing fan base. This means that $500 million is a bit steep to drop on a completely new franchise that doesn't have a preexisting fan base, but then again, Bungie has an audience of its own. If there is a development team that can design a new IP from the ground-up and warrant that much profit back, we have a feeling the house that made Halo can. Kotick even openly expressed his pride in the company by saying "we expect Destiny to be Activision Publishing's next billion-dollar franchise."
Destiny is due for a release on PlayStation 3, PlayStation 4, Xbox 360 and Xbox One on Sept. 9. Pre-ordering the game now, whether digitally or at participating retail stores, will warrant access to Destiny's beta program, which will launch later this summer.