isnt it also day 1 on gamepass

lol.

Yes it is on gamepass day1.

Peppridge Farm Remembers when Shenmue had the largest budget of all time at $70 million. Phantasmagoria at $4 million

I doubt this is true. Most of these rumoured budgets are normally greatly exaggerated, and based on the absolute upper end of games. For example Concord had a development budget of $50m from ProbablyMonsters investment material. No one can say how much it ran over budget, but the idea it cost $200m with a dev team that peaked at around 150 people is pretty ludicrous.

There’s lots of games with reasonable budgets when Developers are actually being held in check:

Ghost of Yotei - $60M

Alan Wake 2 - €50m

Saros - €50m

Control -  €30m

Control: Resonant - €50m

Horizon: Zero Dawn - €45m

Returnal - significantly less than Saros

It's just a rumor, not confirmed.
It could be with marketing added in (no idea).

However if you have 200-500 developers working 7years on a project.... it does add up.

Google claims:
"An average game developer (software engineer) at Xbox (Microsoft) makes roughly $135,000 to $175,000 per year in total compensation"

Lets take the low number, then it is about ~$135,000 with say ~350 developers and ~7 years of developement..
135k x 350 x 7 years = 330,750,000  ($330m) in Salaries.

(then there is mocap, voice acting, music rights, what have you, marketing ect)

That is just napkin math from me, that is likely off.
However it has been 7 years since their last game.


Tbh I'm not sure why some games cost drastically more to make than others.
However I can tell you that a big part of it is location & salaries, and the amount of people you have working on it vs time it takes to get it out the door. 
Also seems like this "gen" games that are graphically impressive are much more expensive than the PS4/XBone Era.

Production budgets are also often conflated with full investment budgets (marketing+fees+post launch support/roadmap etc)

A lot of them were contractors tho, a ton of devs were laid off or were gone after 1-2 years after Gears 5 and the number growed again with the scale of the game development.  Not contradicting the 400$ million tho,   just as a fan of Gears 5 and seeing so many people leave I had to point this out.

It is also something that people don't like about MS 'the contractors'

Spending this much on a game you give away with a subscription...

Steam is the only place this going to actually have a chance of selling copies, so it better do well.

Saros cost around €50m to develop. That's a good example of wrong information being circulated to the point that search AI will flag incorrect information as factual. 

The shorthand within the industry for development cost is $100k per developer per year, or $10k per month(which is $120k per year). That's an all-inclusive cost that covers wages, office space, equipment, licenses etc. Some od the European companies are under the low end though, and some of the California based devs might be pushing over the high end.

Hoisemarque for example had 80 devs at the start of saros and 110 in 2023. The average dev count is likely around 100. The development time is 5 years. So, in this emaple the maths works out very close. 100k per developer per year would result in roughly $50m cost.

Some games with exceptional costs outside of the core dev team might be significantly higher. Games that use massive outsource teams etc. The Sony games all include a percentage of the internal support studio costs. So if Spiderman, for example, took up 20% of the resources for Visual Arts Group in a year then 20% of that studio running cost is applied to the development cost. That's why Some of them can be very high with modest dev teams for AAA development. 

Why would you spend $400 million on a game for a series that were never massive sellers if also considering selling off the entire division?