Andy Gavin, one of the minds behind Naughty Dog alongside Jason Rubin back in 1986, has been surprisingly active on LinkedIn, sharing nostalgic tales from the early days of their gaming venture. Lately, he’s been opening up about the financial journey of the studio, highlighting the escalating costs of producing Naughty Dog’s early games and how this financial strain eventually nudged them towards joining forces with Sony in 2000.
Gavin reminisced, "Our games in the early ’80s were created on budgets under $50,000 each. When we developed Rings of Power between ’88 and ’91, costs doubled to around $100,000. But in 1992, we still managed to turn a modest profit post-tax. By 1993, we reinvested that $100k into self-funding Way of the Warrior. Then, creating Crash Bandicoot from ’94 to ’96 demanded $1.6 million. Fast forward to Jak and Daxter from ’99 to ’01, where the budget surged past $15 million. By 2004, crafting a AAA game like Jak 3 ballooned costs up to $45-50 million, a trend that’s persistent ever since."
This financial pressure eventually led to selling the studio to Sony. As Gavin explained, "Managing these skyrocketing costs independently was immensely stressful. Selling to Sony wasn’t merely about securing financial stability; it was about empowering Naughty Dog to continue creating top-quality games without suffocating under financial burdens or fearing that one misstep could be catastrophic."
Gavin’s reflections sparked quite a discussion among industry peers. James Marcus, a senior artist at 1047 Games working on Splitgate 2, chimed in, "It’s unfortunate how costs have escalated so drastically. This climate forces too many developers to play it safe creatively or capitulate to big corporations to avoid the financial ruin a failed game could bring."
However, being acquired by giants like Sony isn’t always a straightforward boon. It can bring about restructuring and layoffs—Naughty Dog experienced this during Sony’s 2024 cutbacks. In the case of Firewalk Studios, after Sony acquired them in 2023 following the release of Concord, things didn’t turn out well; they were shut down soon after the game launched. So, the decision to sell to a major player like Sony comes with its own set of uncertainties. But, one thing is clear: the costs of producing AAA games are only climbing higher.
