Activision Ploughing $500 Million Into Destiny
Written Tuesday, May 06, 2014 By Richard WalkerView author's profile
By the time it launches, Activision will have invested $500 million into Bungie's Destiny, according to the publisher's CEO Bobby Kotick. Revealing the figure at the Milken conference, Kotick revealed that it's all part of not taking any chances with "someone else's IP."
"If you're making a $500 million bet you can't take that chance with someone else's IP," he said during the conference, Reuters reports. "The stakes for us are getting bigger."
To put that number into context, Rockstar spent a total of $260 million on Grand Theft Auto V, which went on to break the $1 billion revenue milestone in just a few days, shipping over 32.5 million copies at last count.
Analysts seem to think that Activision will have a fight on their hands just getting Destiny to break even given the amount of cash that's being pumped into the game. Destiny will apparently need to sell at least 15 million copies just to recoup its costs. "It's a head scratcher," Sterne Agee analyst Arvind Bhatia said. "For brand new IP, it's tough but it could post a big surprise."
Activision and Bungie have a ten-year agreement in place, so the half-a-billion dollar investment could bear fruit over time. Activision also noted that the $500 million takes into account Destiny's development, marketing, packaging, infrastructure support, royalties and other costs.
Investement in the game's engine and a "robust backend infrastructure," should also help reduce future costs, an Activision representative noted.. "Over the long term, we expect the ultimate product costs to be roughly in line with other AAA titles," the spokesperson observed.
We'll be able to find out whether Destiny is worth the investment when it launches on September 9th, 2014.