https://x.com/SmashJT/status/2113789829096079392

"My long time contact at Microsoft has just reached out and informed me of a few WILD things.

> Gears of War E-Day Marketing budget was $300,000,000+ on top of the alleged $500,000,000+ development cost.
That is a total of $800,000,000+ for the game entire launch.

> Asha is NOT happy, they stated that this situation is NOT on her, and she is working hard to make sure this kind of shit never happens under her watch.

> Layoffs are already happening right now. With MANY more to come. Future of The Coalition is currently up in the air.

Many other things of note that I will cover tonight but suffice it to say… things are changing massively over at Microsoft Xbox."  - SmashJT


video: https://www.youtube.com/watch?v=IRBJbh3T7ZY





How the hell is that possible?
Like do any studios think its possible to recoup like a $1bn dollars if they spend that much?
Is that what happens next gen with PS6 and XBS2?

Do people believe these numbers? 
That seems like alot.

I remember hearing speculation that the production cost would be over 400m, but here its saying 500m.
Ontop of the crazy costs put into marketing.

Then think of the rumored ~40m revenue it made in its first week or so, from analysts (with 230k sales or something).

Why is budgeting adding 60% to the costs of developing this game in the first place? Not like Gears is unheard of! Just seems absurd.

Sooner or later they'll need to reign in these costs, advertise less, make smaller but more games. I'd actually prefer that. Games may look better now (not always, I hate how MW4 looks compared to classic COD for example) but they all seem shallower with physics, story and what made gaming fun in the first place and yet cost more to make and buy, require larger installs. Doesn't seem sustainable for us or them in the long run.

You mean marketing costs?  Yeah that is insane.
Like why would you need to spend that much on such, honestly these days with word of mouth, if you make a good game, people will notice regardless.

The 7+ years to develop is a big issue too I think.

PS3 / XB360 gen was great with games.
Like back then, Naughty dog did Uncharted 1, 2 years lateron, Uncharted 2, then 2 years lateron, Uncharted 3, and then another 2 years and Last of Us... ect.

Now games take forever to make.

Devs need to go back to the drawing board and figure out a way to push out games faster.

If you believe the marketing budget of this game was $100m more than Avengers: Endgame then I have some snake oil to sell you.

Smash JT is not a legitimate source. He's a pariah within the video game industry. He’s a complete imbecile, desperate for attention.

They did in the form of AI, but it has been widely rejected by customers.

Sadly, you can only automate so much, so not too much that can be gained here.

However, if they were to do multiple games with the same realistic looks, why not reuse some assets from those games, even if it's just background objects like trees or decoration? And also movement routines and potentially NPC and enemy AI while we're at it.

But even then, $800 Million is insane. That's more expensive than any movie yet to get anywhere near the same revenue of the big blockbuster titles they'd need to sell tens of millions of copies at full price, which is simply not sustainable.

I know film budgets are not a perfect comparison, since they don't include marketing budgets, but even just the $500 million dev cost would comfortably put e-Day into the Top 10 most expensive films ever. And with no offense meant to Gears of War, it is not the gaming equivalent of something like Star Wars or Avengers.

This is not a sign of games being too expensive to make; it's a sign of overly investing in a project that can not reasonably be expected to return the investment.

Not really. The video game industry has, for a long time, had winners and losers. Xbox just happens to be among the current losers, so to apply what's going on there to the industry as a whole is a vast overgeneralization. Companies falling from overspending against their rev isn't new. I'm sure many recall the fall of Sega, Atari, Infogrames, NEC, SNK, THQ, Midway, Acclaim, and many others.

Today, companies are making tremendous profits in the video game industry. For example, in the last fiscal year Nintendo made 360 billion yen profit off of 2.3 trillion yen revenue. Another example, Konami made 75 billion yen profit on 420 billion revenue. In the US the most profitable was EA in their last public annual earnings report that scored 1 billion in profits on 7.4 billion in revenue.

I'd actually say Microsoft is probably the worst company to look at as a sample of the video game industry for this kind of question:
1. They have the means to much more heavily subsidize their projects than any of the other companies.
2. Their mode of competition is imitate a market leader and outspend them. Spending well above their means to eat up entire studios, and outbid competition on staff hires.
3. They are a failing imitation brand that refuses to differentiate themselves with any meaningful lateral innovation (in the way Nintendo did multiple times).

This makes them very unlike other brands and devs in the industry.

In the past, Microsoft has been able to bail Xbox out with its substantial war chest, and finance its "spend above your means to compete" strategy. (and while I can't speak on the veracity of this report, if true) This Asha scaling back stuff is a "shareholders want to pull the plug on this Xbox spending strategy" type thing, rather than a reflection of the strategies in the rest of the industry.

Jez Corden suggested the $500M value is for the whole studio since the last Gears, which makes a lot more sense since it would include plenty of other stuff.

The marketing figure, though, is probably someone pulling it out of their ass.

So the take so far is, this will sort it self out, and that this is fine?
It's costing us studios though, which means less games and potentially IP going away.