But can the industry sustain high costs and huge stakes?

Modern Warfare 2 dev costs put at $40-50m

Infinity Ward prised as much as $50 million from Activision’s budget to develop Modern Warfare 2, reports suggest.

That figure is thought to be far less than Infinity Ward had initially been offered.

In the first half of an extensive interview with Develop, Infinity Ward community manager Robert Bowling revealed the extent in which Activision was willing to go to ensure Modern Warfare 2 hits its marks.

“Early on – when we decided to make a sequel – Activision estimated out a ridiculous budget. And we were like: ‘No, we don’t need that’,” he said.

The $40-50 million that Infinity Ward spent – a number quoted by anonymous sources in an LA Times report – is not as eyebrow-raising as it was several years ago.

Polyphony’s Gran Turismo 5 budget said to be hovering around the $60 million mark, and when revealing the costs, Gran Turismo series producer Kazunori Yamauchi said the budget was a small amount considering the size and scale of the title.

“There are other games that cost more," he said at the time.

It is widely believed that GTA IV’s development budget is an industry record. Rockstar North president Leslie Benzies previously claimed the GTA IV budget was at $100 million.

The huge numbers underline the growing era of risk in the game development sector, with rocketing game budgets pushing the stakes to an all-time high.

Robert Walsh, the CEO of Australian outfit Krome, recently told Develop that game budgets are rising at a frightening pace.

“I think that’s one thing that the press, to a certain extent, is forgetting,” said Walsh in an interview.

“They’re saying sales have increased over ten percent since last year or whatever; I mean, dev costs have probably doubled or tripled in the console transition.”

Walsh’s Krome studio has in the past week announced layoffs across all three of its studios, citing poor sales that – presumably – failed to satisfy investments.

The LA Times report also claims that the marketing costs of Modern Warfare 2 hit close to $200 million – a staggering figure for a video game marketing campaign.

However, Colin Sebastian, an analyst at Lazard Capital Markets, believes that the FPS will sell as many as 20 million units, exceeding $1 billion in revenue. The game’s sales have already exceeded $550 million.

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