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[Super Nothing]

This just seems so backwards to me. You don't put all of your money into an unproven franchise thinking that you can brute force it into a blockbuster with an endless marketing budget. You start smaller and ramp up production on future titles after the first one proves to be successful. That way, you limit your exposure by investing large sums on a proven product. You expand on what is already successful. Look at Borderlands (we can tell Bungie already did from the early footage of Destiny). They started off with a modest budget and then built a franchise on the success of the first title. After the first game beat expectations, they then planned multiple sequels across all platforms.

 

[Phades]

They'll cost far less once Destiny's engine is in place and it's patching paid for via expansions.

Also, the marketing costs incurred for the first should surely be amortized throughout the life of the franchise. Activision is hitting the marketing hard for iteration #1 knowing that if it delivers they'll be able to massively cut back on advertising and sell 2-X much more heavily on word of mouth.

The point was, if the big number is to include subsequent iterations, then the big number is only going to get bigger as time goes on and it is a misrepresentation to understate the overal cost much in the same way that hollywood accounting misrepresents what really occurs in order to suit whatever message they want to send.

Also refer to my prior post regarding a "viral" marketing option that would potentially cost less than what they are doing currently.

 

[ComputerMKII]

This just seems so backwards to me. You don't put all of your money into an unproven franchise thinking that you can brute force it into a blockbuster with an endless marketing budget. You start smaller and ramp up production on future titles after the first one proves to be successful. That way, you limit your exposure by investing large sums on a proven product. You expand on what is already successful. Look at Borderlands (we can tell Bungie already did from the early footage of Destiny). They started off with a modest budget and then built a franchise on the success of the first title. After the first game beat expectations, they then planned multiple sequels across all platforms.

It worked for Kinect, though

 

[heidern]

I don't know how well the game is going to sell but you can see how this is the kind of thing that's been pushing the industry to more consolidation. How are other games going to compete with Destiny and a $200M+ marketing budget? COD/Fifa/Madden etc will do fine, but lesser known games will get drowned out. And if Destiny only sells 10M units even Activision lose out. And if those 10M sales are partly at the expense of Call of Duty they lose out even more.

 

[Goddard]

*Spends 500 Mil developing a brand new IP with the necessity of selling over a dozen million copies just to break even*

*Sells 10 million copies, an amazing amount of sales for any game*

*Consumer blaming*

 

[Phades]

*Spends 500 Mil developing a brand new IP with the necessity of selling over a dozen million copies just to break even*

*Sells 10 million copies, an amazing amount of sales for any game*

*Consumer blaming*

This wouldn't surprise me in the slightest. Throw in a dash of "dey tuk er gamez" piracy remarks or "uzed gamez er de debil". With the obligatory dash of "gaming iz dead!!!!!shift+1" from various publications.

 

[jhmtehgamr20xx]

Well this is the confusing part now. You took too long to speak up so I took this avatar bet to someone else. I can't choose you both.

What a predicament.

Eh, it's whatever, no big deal. And if the official holiday season DID end in March, well I would be very dumb to take that bet!

This game is still screaming "under expectations" for me but I don't see them having a problem moving 5-6 million copies this year. That'd still make it a bigger success than Titanfall in the given timeframe (3 months).

Speaking of which we never got official TF sales #s and that's a shame.

 

[Mike Double U]

I was more hyped for Destiny before Bungie delayed it. Don't get me wrong, I'm still anticipating getting it in the first week, but I'm not as excited as I once was. Maybe that'll change when launch gets closer.

Is $500 million more than Activison ever spent on a Call Of Duty marketing campaign?

 

[-PXG-]

15-16 million units to BREAK FUCKING EVEN!?!?!! They've lost their goddamn minds. Jesus Christ, The Avengers and Tengen Toppa Gurren Lagann, with their powers combined, couldn't make that possible. It doesn't matter how big both Activision and Bungie are. A new IP won't sell that many units, even across four platforms. Maybe...Maaaaaaaybe after a good while and if God is in a good mood and the planets are all in alignment. It certainly won't see that sort of insane sales figures at launch. But as we know, sales drop fast after the first month or so.

There's... There's just no way. It's impossible

 

[UntoldDreams]

Guys... Didn't they say they were targeting the long 10 year span?

Isn't that the point of this line where they are hoping to establish a new 10 year franchise?

"The company signed a 10-year contract with Bungie in 2010 that gives it worldwide distribution rights and significant control over the potential franchise's development."

They probably view this as a credible attempt to make a new "WOW" or something. Its not one game its like 20 games over 10 years.

 

[-PXG-]

Guys... Didn't they say they were targeting the long 10 year span?

Isn't that the point of this line where they are hoping to establish a new 10 year franchise?

"The company signed a 10-year contract with Bungie in 2010 that gives it worldwide distribution rights and significant control over the potential franchise's development."

They probably view this as a credible attempt to make a new "WOW" or something. Its not one game its like 20 games over 10 years.

Yeah.. and each and every one of those games will have their own development and marketing budgets that only add to the overall total cost. If you think about that, it's even dumber and even more improbable

 

[Dire]

I honestly don't see how anyone could think it's [not for the 10 year contract]. The 500 million figure doesn't make any sense if you stop and think about it. GTA5 was half of that, and had a dev time that was just as long as Destiny's, however they had twice the amount of people working on it.

Fortunately the contract for Destiny is public: http://documents.latimes.com/bungie-activision-contract/

The $500million is definitely for the first game.

I'm actually surprised it's that low. For just the 360 version's development they're allocating $140million (section 11.4). And marketing expenses typically far surpass development expenses.

http://www.businessweek.com/article...-expensive-game-ever-and-it-s-almost-obsolete : In GTA 5 $115million was spent on development and around $160million spent on marketing. And all things considered it seemed a fairly modest marketing campaign from a consumer point of view.

The above contract references 2010 as being in the future. GTA 5 development began in 2009 and was released 9 months ago. Destiny won't be released for some time yet. It has a longer dev cycle undoubtedly.

Also related to the contract. Check out section 11.2. It's amazing how standard (for a console title) and horrific Bungie's deal is. You'd think a dev of their reknown would be able to get something better. They get 20-35% of net income after expenses from the game. In other words after Activision deducts all of their expenses in any way related to the game (including marketing) Bungie gets up to 35% of what's left over. That up to 35% only applies if the game makes at least 400million net profit after expenses. That's not going to happen. That'd be 20million sales if Activision has net profit after expenses of $20/sale which is likely on the high side. That's painful. There's also clause 11.5 that cuts a good chunk out of their royalties if the game has been delayed, which it has. AAA is such a screwed up system for developers.

 

[Faith]

500 million for what exactly? 300 million for marketing?

 

[KeRaSh]

I was more hyped for Destiny before Bungie delayed it. Don't get me wrong, I'm still anticipating getting it in the first week, but I'm not as excited as I once was. Maybe that'll change when launch gets closer.

Is $500 million more than Activison ever spent on a Call Of Duty marketing campaign?

What delay? There was never a set date for the release before they announced the September date, right? The beta was pushed back a little but then again we never got a specific date for that in the first place.

 

[elektrixx]

Good. It shows confidence. I'll buy a copy.

 

[broony]

What delay? There was never a set date for the release before they announced the September date, right? The beta was pushed back a little but then again we never got a specific date for that in the first place.

It was originally marketed as launching Spring 0214 with the beta early 2014.

I am glad they are taking the extra time to get things right.

 

[KeRaSh]

It was originally marketed as launching Spring 0214 with the beta early 2014.

I am glad they are taking the extra time to get things right.

Oh! I actually forgot about that because I never believed it in the first place. I wish it was out already...

 

[Infinite Xero]

I'm terrible for saying this, but it would be hilarious if this game flopped like Titanfall. Like the game only selling 4-8 million copies.

Spoiler

Developers/Publishers should stop these enormous budgets. Half a billion is ridiculous.

 

[epicnemesis]

How do you spend 500million on a game this early in the new console lifecycle? Needing to sell 15-16 million to break even when there are optimistically 20 million consoles to sell to is bad business. Even assuming they get a few million copies sold on PC, its really hard to see them break even without a completely exploitative micro transaction model or subscription fee.

 

[RalchAC]

They say that Bungie has a contract firmed with Activision for around 10 years. And they already said that they are working on a long term plan.

They're probably going to have a really long marketing campaign for this game. It'd have adds everywhere for months, which costs money (some will be from Sony's pockets).

The game is quite big, so it'd be expensive to develop. They're going to release a Season Pass and DLCs have been promised to be quite big too (which means more money).

And we still don't know what will be their strategy. Are they going to release Destiny 2? Or are they going to do more than one Season Pass? Are they going to release retail expansions like they do with World of Warcraft / Diablo?

I think they'd likely choose option 2 or 3. There won't be Destiny 2. They'll expand the original game for years. It looks like the most logical outcome if it's like an MMO.

We're talking about Activision. They're not Square Enix, who is known for over-budgetting their games. I don't think they'd spend that much money on Destiny without a good reason.

 

[KeRaSh]

How do you spend 500million on a game this early in the new console lifecycle? Needing to sell 15-16 million to break even when there are optimistically 20 million consoles to sell to is bad business. Even assuming they get a few million copies sold on PC, its really hard to see them break even without a completely exploitative micro transaction model or subscription fee.

1. It's a crossgen game.
2. It's not coming to PC (yet?)

 

[Klyka]

That's a lot of money for a game that looks like Borderlands 2

 

[wowlace]

BOY OH BOY BIG BOY MCEVOY WOWEE!

 

[Dire]

How do you spend 500million on a game this early in the new console lifecycle? Needing to sell 15-16 million to break even when there are optimistically 20 million consoles to sell to is bad business. Even assuming they get a few million copies sold on PC, its really hard to see them break even without a completely exploitative micro transaction model or subscription fee.

Read the contract I previously posted. They're already planning to aggressively milk this before it's even hit store shelves. There will be DLC, microtransactions and "added value payment packages" (whatever that means). There's also going to be a sort of stand-alone expansion/co-title that hasn't been announced yet named Comet. They're also developing a new engine for the game which is expensive and time consuming. Once that's been developed costs and dev times will plummet.

 

[Super Nothing]

Read the contract I previously posted. They're already planning to aggressively milk this before it's even hit store shelves. There will be DLC, microtransactions and "added value payment packages" (whatever that means). There's also going to be a sort of stand-alone expansion/co-title that hasn't been announced yet named Comet. They're also developing a new engine for the game which is expensive and time consuming. Once that's been developed costs and dev times will plummet.

But banking on milking a franchise that doesn't even have a fanbase yet is a terrible idea. They're basically gambling with half a billion dollars. They've counted their chickens before they hatched.

 

[Jarmel]

There will be DLC, microtransactions and "added value payment packages" (whatever that means).

Season pass

 

[monome]

Fortunately the contract for Destiny is public: http://documents.latimes.com/bungie-activision-contract/

The $500million is definitely for the first game.

I'm actually surprised it's that low. For just the 360 version's development they're allocating $140million (section 11.4). And marketing expenses typically far surpass development expenses.

http://www.businessweek.com/article...-expensive-game-ever-and-it-s-almost-obsolete : In GTA 5 $115million was spent on development and around $160million spent on marketing. And all things considered it seemed a fairly modest marketing campaign from a consumer point of view.

The above contract references 2010 as being in the future. GTA 5 development began in 2009 and was released 9 months ago. Destiny won't be released for some time yet. It has a longer dev cycle undoubtedly.

Also related to the contract. Check out section 11.2. It's amazing how standard (for a console title) and horrific Bungie's deal is. You'd think a dev of their reknown would be able to get something better. They get 20-35% of net income after expenses from the game. In other words after Activision deducts all of their expenses in any way related to the game (including marketing) Bungie gets up to 35% of what's left over. That up to 35% only applies if the game makes at least 400million net profit after expenses. That's not going to happen. That'd be 20million sales if Activision has net profit after expenses of $20/sale which is likely on the high side. That's painful. There's also clause 11.5 that cuts a good chunk out of their royalties if the game has been delayed, which it has. AAA is such a screwed up system for developers.

10 years agreement.

Bungie will be busy making games for 10 years, whatever sales they get. that's nice.

I suppose Activision would have to give a shitload of $$$ to Bungie if Destiny 1 flopped and they wanted out.

 

[Mr. X]

They're not going to get those sales on the first game but they should be expecting to take a bit of an L. If not, they're really riding on the Bungie name + strength of FPS/shooters genre.

This is long-term building, they're hoping the first will sell at least well enough to justify making a franchise out of it (another game, some non-gaming merch like OST, clothing, etc.) so it'll not only break-even before or when the sequel drops but be making double the investment.

Not saying it's a good idea, the landscape doesn't seem to be that predictable and it's a dangerous precedent for publishers and hopefully no one else thinks they'll need to something like this to keep up. It's a massive gamble.

 

[Nirolak]

10 years agreement.

Bungie will be busy making games for 10 years, whatever sales they get. that's nice.

I suppose Activision would have to give a shitload of $$$ to Bungie if Destiny 1 flopped and they wanted out.

The contract specifies that if Destiny doesn't ship 5 million copies in one month they can drop the contract, and they can drop it for any reason they want after the expansion pack for Destiny 2, so they did leave themselves out clauses.

 

[Jarmel]

The contract specifies that if Destiny doesn't ship 5 million copies in one month they can drop the contract, and they can drop it for any reason they want after the expansion pack for Destiny 2, so they did leave themselves out clauses.

Oh shit, I didn't see that bit. Fuck, 5 million in the first month? That should be doable I guess.

 

[Concept17]

They're building a new franchise developed by Bungie in a genre where there are multiple billiond-dollar franchises. If they can build something huge with the first iteration, it'll be worth it for the duration of the 10-year contract between the two companies.

 

[Dire]

10 years agreement.

Bungie will be busy making games for 10 years, whatever sales they get. that's nice.

I suppose Activision would have to give a shitload of $$$ to Bungie if Destiny 1 flopped and they wanted out.

Nope. Sadly, that's also covered in the contract. Section 17.1

There's a hoard of reasons Activision can cancel the contract early on including Destiny selling less than 5million in its first 24 weeks or even if Halo:Reach (which was still under development when this was signed) sold-in less less than 6,000,000 units 6 months after its commercial release. Activision also has a clause enabling them to cancel the contract at any time they choose after the release of the second "Comet" game. Oh and if Activision cancels the contract, they get all the IP and related assets (such as the game engine) and right to keep collecting the money for the game.

AAA development really does suck for devs.

--And it's so strange to think that Activision was founded only a bit more than 30 years ago by game devs tired of publisher tyranny.

 

[Graphics Horse]

1. It's a crossgen game.
2. It's not coming to PC (yet?)

Cross gen will help, but maybe only means 25% extra sales with the way things are going recently.

 

[Phades]

Fortunately the contract for Destiny is public: http://documents.latimes.com/bungie-activision-contract/
Also related to the contract. Check out section 11.2. It's amazing how standard (for a console title) and horrific Bungie's deal is. You'd think a dev of their reknown would be able to get something better. They get 20-35% of net income after expenses from the game. In other words after Activision deducts all of their expenses in any way related to the game (including marketing) Bungie gets up to 35% of what's left over. That up to 35% only applies if the game makes at least 400million net profit after expenses. That's not going to happen. That'd be 20million sales if Activision has net profit after expenses of $20/sale which is likely on the high side. That's painful. There's also clause 11.5 that cuts a good chunk out of their royalties if the game has been delayed, which it has. AAA is such a screwed up system for developers.

Holy .... By the sound of that, what exactly will Bungie get from releasing the title at all? Couldn't Activision just keep "upping" the admin/advertising costs to retain all revenue from the title?

 

[FyreWulff]

Holy .... By the sound of that, what exactly will Bungie get from releasing the title at all? Couldn't Activision just keep "upping" the admin/advertising costs to retain all revenue from the title?

Welcome to poison pills. Now showing in every single publishing contract for every single dev.

 

[cuyahoga]

The contract specifies that if Destiny doesn't ship 5 million copies in one month they can drop the contract, and they can drop it for any reason they want after the expansion pack for Destiny 2, so they did leave themselves out clauses.

I thought it was six months after Destiny's release, not one.

I'm actually surprised it's that low. For just the 360 version's development they're allocating $140million (section 11.4). And marketing expenses typically far surpass development expenses.

I'm pretty sure the contract is not current, so worth taking it with a grain of salt.

 

[Bacon_Boss]

I feel like a lot of this is groundwork though. The 500 million they're spending now will probably fuel a good portion of that 10 year 5 game contract. Even if Destiny doesn't sell 12 million copies this time, the sequel, or even the DLC could probably push them to even in the early half of that deal.

 

[GenericUser]

This will be remembered as one of the great wrong decisions that Acitivision made.

 

[Woorloog]

Wasn't the Destiny contract wonderful for Bungie? Much better than average contract for devs, i understood, not to mention they actually own the IP (assuming everything works out).