According to the UK's Competition and Markets Authority (CMA) report, the cost of developing AAA games, like Call of Duty, has grown significantly. Activision now requires "almost 1.5" lead studios for each annual Call of Duty release due to the large amount of content needed.
Apparently, Activision packs "so much content" into each Call of Duty game that every project requires 1.5 lead studios.
Every year, a new Call of Duty is released and we find out two things: how much resources Activision Blizzard poured into a single game and how it didn't meet expectations.
Last year's Call of Duty: Modern Warfare 2 was a bit of an exception as it set a new launch record for the franchise although we're pretty sure sales have slowed down since due to the lack of ongoing content for the game.
But, we aren't here to talk about the success of Modern Warfare 2 or Call of Duty. Rather, the topic here is Activision and how expensive every Call of Duty game is to make.
It's one thing for Activision to claim that it spends so much money on Call of Duty, but it's another when a regulatory body tells us the same thing. This is exactly what happened when the UK's Competition and Markets Authority (CMA) decided to block the Microsoft Activision Blizzard acquisition last week. While all eyes have been on the decision, some have decided to look deeper into the final report, which has confirmed the ballooning costs of AAA games development.
Upon further inspection, there's an interesting section in the report that says that Activision needs "almost 1.5" lead studios to release a new Call of Duty game, saying:
We have to make so much content for Call of Duty, that we can’t even lean on one lead studio anymore. Now we need almost 1.5 lead studios for each annual CoD. That kind of bandwidth pressure is forcing us to use outsourcers more and more. I don’t see that changing anytime soon.
The CMA is using Activision's own words against the acquisition by saying this is the reason why Sony, among many other companies, will struggle to make an alternative to Call of Duty anytime soon.
The growing costs of video game development explain why Sony prefers this deal not to take place and why Microsoft is so motivated to make it happen (at least, outside of paying a massive fine).
In Sony's case, it can't afford to invest so much money in creating something that can compete with Call of Duty anytime soon. If it does try, it will have to allot a huge chunk of its budget to assign and/or create a studio specifically to do it while also taking on the risk of not making money out of it. This might come at the expense of its other best-selling titles. On the other hand, Microsoft stands to make back the money it spent on its investment, even if it doesn't make Call of Duty exclusive to the Xbox platform.
Activision Blizzard holds the keys to several other billion-dollar and hundred-million-dollar franchises. The systems and the properties are already in their place as well. All Microsoft has to do is give the company the budget and the green light to cook and watch as the profits come in.
Of course, with video game development budgets growing exponentially in just five years, this isn't a sustainable business move, even if you're a company that's worth trillions of dollars.
Besides, just because you spend hundreds of millions to make a AAA game, this doesn't guarantee that your game will be a success - just ask Square Enix, and ironically enough, Microsoft.
