Two things are causing AAA game development costs to hit $300 million per game

Industry insider and Bloomberg reporter Jason Schreier has revealed in a recent post that AAA game development costs exceed $300 million, and in some cases, much more.

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Schreier revealed the details in a recent report explaining why video games now cost so much money to develop. Within this report, Schreier outlines the current state of the industry, explaining that budgets for AAA titles have been sharply increasing for quite some time, with the reporter pointing to Naughty Dog's Uncharted 2: Among Thieves, which was released in 2009, costing $20 million, while The Last of Us Part 2, released in 2020, cost $220 million.

The report goes on to note that video game budgets have ballooned, mainly due to the combination of development time and salaries. Schreier writes that one employee in Los Angeles could cost the studio anywhere between $15,000 and $20,000 a month, when taking into account salary, benefits, and overhead. If the studio has 100 employees, it will be spending as much as $18 million per year. Now consider studios with thousands of employees.

"Exact budgets of video-game productions can be tough to corroborate (more transparency from publishers would be nice!) but the numbers I've heard floating around AAA game dev these days are $300 million or more - sometimes much more! - which I think helps explain the current state of the industry," wrote Jason Schreier on BlueSky

For example, Call of Duty: Black Ops 3 (2015) cost $450 million, Call of Duty: Modern Warfare (2019) cost $640 million, and Call of Duty: Black Ops Cold War (2020) cost $700 million. The reason for such large numbers is the salaries of the 3,000 people who work on the franchise, and the requirement to maintain an annual release cycle, which likely steadily increases the employee count as customers require innovations and improvements with each new release.