It’s no secret that the cost of game development is skyrocketing. Those rising costs are a key reason whyNaughty Dog’s founders allowed the studio to be sold to Sony.
Andy Gavin, who co-founded the legendary game studio in 1984 with Jason Rubin, explained why they sold the company to Sony in 2001 on hisLinkedIn page. It was all about the money, but not to come out with a big payday. Instead, games were becoming too expensive, and they wanted to secure their financial future.
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Little is known about the next game from the studio behind The Last of Us.
Why did we sell Naughty Dog?
It’s a question I’ve been asked countless times. The answer is simple: budgets were skyrocketing.
When we started Naughty Dog in the 1980s, game development expenses were manageable. We bootstrapped everything, pouring profits from one game into the next.
Our early 80s games cost less than $50,000 each to make.
Rings of Power (‘88-91), saw budgets rise to about $100,000, but yielded slightly more than that in after tax profits in 1992.
In 1993, we rolled that $100k from Rings into a self funded Way of the Warrior.
But Crash Bandicoot (‘94-96) cost $1.6 million to make.
By the time we got to Jak and Daxter (‘99-01), the budget busted the $15 million mark.
By 2004, the cost of AAA games like Jak 3 had soared to $45-50 million – and they have been rising ever since.
But back in 2000, we were still self-funding every project, and the stress of financing these ballooning budgets independently was enormous.
It wasn’t just us. This was (and still is) a systemic issue in the AAA space. Developers almost never have the resources to fund their own games, which gives publishers enormous leverage.
Naughty Dog Has Enjoyed Immense Success Since The 2000s
Despite making a name for themselves in the 1990s with theCrash Bandicootfranchise, Naughty Dog did not achieve its iconic status until the mid-2000s.
After the PS2’sJak and Daxterfranchise, they broke into the mainstream with theUnchartedfranchise for thePlayStation 3. The first threeUnchartedgames, heavily inspired by theIndiana Jonesmovies, gave the struggling PS3 console a bonafide system seller. With 2013’sThe Last of Us, they took another step forward as one of the premiere developers in the industry, standing toe-to-toe with other giants such asRockstar Games.
Naughty Dog’s games became something to look forward to, a trend that continues withUncharted 4andThe Last of Us Part II. That trend will continue with the recent reveal of their next game,Intergalactic: The Heretic Prophet.
The one cost of these marquee games, though, is a gigantic development budget.Sony has poured hundreds of millions of dollars into these games, including projects from Naughty Dog that will never be released, like the multiplayerThe Last of Usspin-off,which was canceled.
If Naughty Dog had to foot the bill themselves, there’s a good chance most of these games would never have been made.
