{"id":156894,"date":"2023-05-04T23:45:43","date_gmt":"2023-05-04T23:45:43","guid":{"rendered":"https:\/\/culture.org\/?p=156894"},"modified":"2023-05-04T23:45:43","modified_gmt":"2023-05-04T23:45:43","slug":"skyrocketing-game-development-costs-cast-doubt-on-industrys-future","status":"publish","type":"post","link":"https:\/\/culture.org\/gaming\/skyrocketing-game-development-costs-cast-doubt-on-industrys-future\/","title":{"rendered":"Skyrocketing Game Development Costs Cast Doubt on Industry&#8217;s Future"},"content":{"rendered":"           <!--  <script type=\"text\/javascript\">\r\n                jQuery(document).ready(function() {\r\n                    jQuery(\".key-accordion-item .key-menu\").on(\"click\", function() {\r\n                        if (jQuery(this).parent().hasClass(\"active\")) {\r\n                            jQuery(this).next().slideUp();\r\n                            jQuery(this).parent().removeClass(\"active\");\r\n                        } else {\r\n                            jQuery(\".key-content\").slideUp();\r\n                            jQuery(\".key-accordion-item\").removeClass(\"active\");\r\n                            jQuery(this).parent().addClass(\"active\");\r\n                            jQuery(this).next().slideDown();\r\n                        }\r\n                    });\r\n                })\r\n            <\/script> -->\r\n\r\n\r\n            <!-- start html -->\r\n\r\n            <div class=\"news-key-takeaway-wapper\">\r\n                                <span style=\"background-color:#39b54a;\">Key Takeaways<\/span>\r\n                <ul class=\"news-key-nbox\" style=\"border-color:#39b54a;background-color:rgba(57, 181, 74, 0.1);\">\r\n                                                        <li>Game development costs are increasing and expected to continue rising, with some AAA franchises already exceeding $300 million in development costs.<\/li>\r\n                                                                    <li>Publishers are finding big-budget game development increasingly unsustainable, forcing them to rely more on their most trusted franchises.<\/li>\r\n                                                                    <li>Microsoft's acquisition of Activision Blizzard has been blocked by the UK's CMA, citing concerns over the future of cloud gaming. Microsoft's chances of a successful appeal are slim, as the CMA has a track record of winning appeals.<\/li>\r\n                                                                    <li>The impact of the acquisition on cloud gaming is a key concern, and Microsoft's deals with various cloud gaming providers have been deemed too limited in scope.<\/li>\r\n                                                                    <li>The EU's decision on the acquisition, expected by May 22nd, could have a significant impact on Microsoft's chances of success.<\/li>\r\n                                                <\/ul>\r\n            <\/div>\r\n            \n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Recent testimony in the regulatory battle over Microsoft&#8217;s acquisition of Activision Blizzard reveals that game development costs have been on a steady rise, with blockbuster game budgets expected to grow significantly in the next few years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Market analyst firm IDG projects that development costs for high-budget games will increase from an average of $50-150 million last console generation to over $200 million for games to be released in the next couple of years.<\/span><\/p>\n<h2><b>The Financial Strain on Publishers<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The UK\u2019s Competition and Markets Authority (CMA) report demonstrates the financial strain on game publishers, with some AAA franchises like Call of Duty already exceeding $300 million in development costs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally, several publishers reported spending millions on pre-launch development and marketing for their recent releases.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This continuous escalation in costs has made big-budget game development increasingly unsustainable, forcing publishers to rely more on their most trusted franchises.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Microsoft&#8217;s Acquisition of Activision Blizzard Faces Regulatory Hurdles<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Microsoft\u2019s $68.7 billion deal to acquire Activision Blizzard was blocked by the UK&#8217;s CMA, citing concerns over the future of cloud gaming.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Microsoft president Brad Smith expressed his anger over the decision, stating it was the \u201cdarkest day\u201d for the company in its four decades of working in Britain.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To appeal the CMA&#8217;s decision, Microsoft will have to file a notice with the Competition Appeal Tribunal (CAT), a process that could take months.<\/span><\/p>\n<h2><b>CMA&#8217;s Track Record of Winning Appeals<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The CMA has won 67% of all merger appeals since 2010, making Microsoft&#8217;s chances of a successful appeal slim.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Previous battles involving Meta and Viagogo show the difficulty companies face when trying to overturn a CMA decision.<\/span><\/p>\n<h2>                        <!-- <div class=\"container-c\"> -->\r\n                        <!-- <div class=\"row justify-content-between\"> -->\r\n                        <!-- <div class=\"col-post-800\"> -->\r\n                        <!-- start html -->\r\n                        <div class=\"blockquote-wapper\">\r\n                            <div>\r\n                                <span class=\"text_quot\">\r\n                                    <p><span style=\"font-weight: 400;\">Market analyst firm IDG projects that development costs for high-budget games will increase from an average of $50-150 million last console generation to over $200 million for games to be released in the next couple of years.<\/span><\/p>\n                                <\/span>\r\n\r\n                                <div class=\"quot_icon\">\r\n                                    <img decoding=\"async\" src=\"https:\/\/culture.org\/wp-content\/themes\/culture\/icons\/i_quot.svg\" type=\"image\/svg+xml\">\r\n                                <\/div>\r\n                            <\/div>\r\n\r\n                            <img decoding=\"async\" class=\"quot_tick\" src=\"https:\/\/culture.org\/wp-content\/themes\/culture\/icons\/i_quot_tri.svg\" type=\"image\/svg+xml\">\r\n                        <\/div>\r\n                        <!-- end html -->\r\n                        <!-- <\/div> -->\r\n                        <!-- <\/div> -->\r\n                        <!-- <\/div> -->\r\n                                    <\/h2>\n<h2><b>The Impact on Cloud Gaming<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Microsoft has been signing deals with various cloud gaming providers, such as Boosteroid, Ubitus, and Nvidia, in an attempt to mitigate the CMA&#8217;s concerns.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the CMA has found these deals \u201ctoo limited in scope,\u201d raising concerns about Microsoft&#8217;s ability to leverage Windows and Azure to influence game distribution and revenue shares across the gaming industry with its Xbox Game Pass subscription.<\/span><\/p>\n<h2><b>The Role of the European Union<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The future of Microsoft&#8217;s acquisition largely depends on the European Union&#8217;s decision, expected by May 22nd.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If the EU approves the deal, it could put pressure on the UK as the only major market to block the acquisition.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, if EU regulators share the same concerns as the CMA, Microsoft&#8217;s chances of success may be even slimmer.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":18,"featured_media":156895,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[407],"tags":[],"class_list":["post-156894","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gaming"],"acf":[],"_links":{"self":[{"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/posts\/156894"}],"collection":[{"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/comments?post=156894"}],"version-history":[{"count":0,"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/posts\/156894\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/media\/156895"}],"wp:attachment":[{"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/media?parent=156894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/categories?post=156894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/culture.org\/wp-json\/wp\/v2\/tags?post=156894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}