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Activision CEO Says Destiny is a '$500 Million Bet'

Category: Gaming
Posted: 08:32AM

According to Reuters, during the Milken conference in Los Angeles last week, Activision CEO called Bungie's upcoming shooter-RPG hybrid Destiny a "$500 million bet." That number raised a few eyebrows, but a company spokesperson confirmed the number, though clarifying that it "included marketing, packaging, infrastructure support, royalties and other costs." Still, analysts say that the amount would likely be a record spent on a single game, which is even more surprising considering it's a brand new IP. According to several analysts, Activision would have to sell about 15 million to 16 million units of a $60 game just to break even.

Grand Theft Auto V has sold over 32.5 million units as of February this year, but that was the fifth major installment of a highly popular franchise. While Destiny could indeed be a big success, Sterne Agee analyst Arvind Bhatia is expecting it to sell "only" 8 million units. While Grand Theft Auto publisher Take-Two Interactive reportedly only spent around $260 million on GTAV, the costs may not be directly comparable since Activision's number may take into account the entire 10-year deal it signed with Bungie, or at least a large portion of that. For example, it seems part of that "infrastructure" cost is associated with the new next-generation engine, which will surely be used in future titles. Nevertheless, no matter which way you slice it, $500 million spent on an unproven IP is a huge risk.

Destiny is expected to launch September 9, 2014, on PlayStation 4, Xbox One, PlayStation 3, and Xbox 360. A PC version has not been ruled out, but if it does come, it certainly wouldn't be until after the console launch.

Source: Reuters

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