Will Activision’s $500 million bet on Destiny pay off?
Here’s some news for the record books. Activision CEO Bobby Kotick has confirmed that the company is spending over $500 million marketing and creating Bungie’s new shooter, Destiny. It’s impossible to not debate whether this is a realistic goal for the game, no matter how fantastic it looks.
Yes, you read that right. FIVE HUNDRED MILLION DOLLARS! That’s nearly double Grand Theft Auto V’s entire budget. Before I tell you what I think about this, let’s hear what Bobby Kotick had this to say about the huge number:
If you’re making a $500 million bet you can’t take that chance with someone else’s IP. The stakes for us are getting bigger.
Activision has confirmed that they need to sell 15 or 16 million copies of Destiny at the $60 launch price point to break even on the game’s development costs. Obviously a large portion of this $500 million is marketing, not the game’s actual development. If I had to wager I’d say $100-$250 million were spent on making the actual game but I have no data to back that up. Just a guess.
This is also for just the first game. When I first read this news I thought “they’re talking about all Destiny games and spin offs right?” Then I read the part about needing to sell 16 million copies to break even. This is an insane amount of pressure to put on Bungie and I just can’t see the first Destiny game selling that well, no matter how good it is.
This number is absolutely staggering. Most analysts are saying that they expect Destiny to sell 8-10 million units, nearly half of what Activision says they need just to break even. We’re seeing studio after studio shut down because a mega publisher like Activision gave them too much money and gave them unrealistic sales goals to hit. Destiny looks like it could be a fantastic franchise and become really popular but Call of Duty popular?
Even if the game sells 15 million units, that would be impressive in any other scenario, what then? Is Activision happy with simply breaking even? Wouldn’t the game be deemed a failure if it doesn’t post massive profits? I really think Activision is taking a huge gamble with this insane budget.
This $500 million price tag makes it all the more strange why Activision isn’t pushing Bungie to port Destiny to PC. I can’t imagine a PC version would sell much better than the console versions but with a budget this high you’d think they’d want the game on as many platforms as possible.
While I’m looking forward to Destiny a lot, I can’t help but find a part of me that doesn’t want to see the game break even. If Activision sets a precedent and manages to get Bungie’s new IP to pull this off imagine how much Ubisoft, Electronic Arts or Capcom will spend on their next big blockbusters? Game budgets are getting absolutely out of control.
Some titles, like Call of Duty and Grand Theft Auto, can make massive profits off a $100 million or more budget. Destiny might prove to be one of those uber-successful franchises. At this point in time though it doesn’t look like Destiny will be as much of a run-away hit commercially as recent games like GTA V. Maybe I’m under-estimating consumer demand for a new Bungie made FPS but I’m just not hearing the same kind of anticipation and chatter about Destiny as you would with a Call of Duty or GTA title.
Destiny will certainly be a historic game for many reasons. Its the famed Halo developers first non-Halo game in more than a decade, it is trying to bring MMO features to a console game, trying to give players an interesting story and universe in a multiplayer game, and most of all it will be known for being the game with the biggest budget of all-time. Will this $500 million gamble pay off for Bungie and Activision? I’d like to think so because I enjoy Bungie’s games and don’t want to see them fail but its hard not to have doubts with this price tag attached to the game.
As of today, I just don’t think this $500 million bet will pay off. At least not with the first Destiny game. If Destiny 2 and 3 recycle a lot the work that went into making Destiny then obviously Activision won’t have to spend $500 million every time Bungie wants to make a sequel. Maybe in the long run Destiny will live up to this $500 million budget commercially but right now I just can’t see this working out for Activision.