'In every single console transition we've seen an increase in expenditure'

Kotick: Rising next-gen dev costs inevitable

Development costs will increase for studios creating games for next generation platforms, the CEO of Activision has said.

Speaking to investors during an earnings call, as reported by CVG, Bobby Kotick said that every console transition had seen an increase in costs, and expects there to be no exception with the next Xbox and PS4.

He explained that although development costs will likely smooth out over time, studios and publishers will need to invest in new tools, technology and game engines to take advantage of new hardware features.

"This is my 22nd year doing this, and every single console transition we’ve seen an increase in development costs," said Kotick.

"Over long periods of time it gets smoothed out, but I would say this is not a transition where that’s going to be an exception.

"We’re going to have to figure out how to take advantage of the unique abilities of new hardware and that requires new skills and investment in tools and technology and engines and so yes, that’s likely."

Despite Kotick’s assertions, Take-Two CEO Strauss Zelnick recently said that he believed development costs were unlikely to change for the next generation of consoles, and that the publisher had actually managed to tighten its expenditure as it prepares to make the step into new hardware.

“We don’t have any reason to believe our development budgets will change significantly,” said Zelnick.

“If anything we have become – group-wide – much tighter in terms of how we spend our money. We can’t say specifically, but no we don’t expect to see a meaningful change in what it costs us to release these top quality products.”

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