Prolific game studio Naughty Dog was acquired by Sony way back in 2001, following strong success with the launches of Rings of Power, Crash Bandicoot, and Jak and Daxter. Following years of speculation about the reasons for this acquisition, Naughty Dog co-founder Andy Gavin has spoken out, confirming ballooning video game budgets contributed to a desire for stability.
Over on LinkedIn (as spotted by SI), Gavin broke down costs for each of Naughty Dog’s early projects, revealing that budgets were growing rapidly year-on-year, likely due to the increased complexity (talent, technology) of developing video games. In the 1980s, Naughty Dog’s games cost “less than USD $50,000 each to make.”
Rings of Power, a Sega Genesis adventure developed between 1988–1991 cost USD $100,000. Profits from this game were used to make Way of the Warrior. Then, the team started developing Crash Bandicoot in 1994 – and it ended up costing USD $1.6 million over a three year period. The next Naughty Dog game, Jak and Daxter, cost a whopping USD $15 million.
“Back in 2000, we were still self-funding every project, and the stress of financing these ballooning budgets independently was enormous,” Gavin said. “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.”
Read: Cancelled Crash Bandicoot sequel set to feature Spyro the Dragon
Over a period of just over a decade, developing video games became far more costly for Naughty Dog (and other developers), leading to questions about the studio’s financial future. In choosing to sell to Sony, Gavin and his co-founders aimed not only to provide security to the studio, but to ensure it had “the resources to keep making the best games possible, without being crushed by the weight of skyrocketing costs and the paralysing fear that one slip would ruin it all.”
According to Gavin, time has shown that selling to Sony was the right call. It enabled Naughty Dog to continue the Jak and Daxter franchise, even with the third game costing around USD $45-50 million. It allowed them to create Uncharted, and then The Last of Us, and now, Intergalactic: The Heretic Prophet.
Gavin believes the studio’s enduring success would not have been possible without Sony’s backing, and while it might have been able to “keep up” without being acquired, this move “gave Naughty Dog the stability it needed to thrive – and to continue making the kinds of games we’d always dreamed of.”
As Gavin noted, today’s game budgets can get up to the USD $300-500 million mark, and in these cases, it’s essential to have a strong financial backing and partnership to ensure the full vision of these projects is realised, and that staff have a stable base to continue development.
