The UK’s Competition and Markets Authority (CMA) blocked Microsoft from acquiring Activision Blizzard last Wednesday due to the implications of this acquisition for the cloud gaming market, and the document released along with this decision revealed some details about the growing financial demands behind AAA games.
In a massive report on the decision, the CMA revealed that some major publishers have reported that their AAA games can cost more than $1 billion.
According to the report, AAA games currently in development with possible releases in 2024 or 2025 typically receive development budgets of $200 million or higher, Call of Duty has already surpassed $300 million in development costs alone, and a Grand Theft Auto title will likely require Next is a development budget of $250 million or more, and when marketing costs are considered, that number could jump to over $1 billion, with a major studio stating a major series development cost of $660 million and a marketing cost of nearly $550 million.
These costs show a significant increase from what AAA games were five years ago, when most AAA games had budgets between $50 and $150 million.
Activision was quoted as saying in the report: “We have to make so much content for Call of Duty that we can’t even count on one major studio anymore. We need about 1.5 major studios per year CoD game. That kind of pressure forces us to More and more outsourcing. I don’t see that changing anytime soon.”
Along with information about the rapidly increasing costs of developing AAA games, the CMA report also asserts that Nintendo platforms are not “technically capable” of running Call of Duty despite Microsoft’s confidence in this.