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Activision spending $500 million on Destiny (That’s more than Avatar)

Read our full Destiny review.

During the Milken conference in Los Angeles last week, Activision CEO Bobby Kotick revealed  that he intends to spend $500 million developing and promoting the post-apocalyptic multiplayer shooter Destiny, Reuters reports. A company spokesperson later confirmed the number, reiterating that, in addition to development costs for the game itself, the figure includes marketing, packaging, infrastructure support, royalties, and other costs.

The game’s budget surpasses Avatar’s  reported production and marketing bill of $425 million, making Destiny a contender for one of the most expensively-produced works of art in any medium.

That is a monumental amount of money to spend on a game, particularly for a brand new intellectual property. That places it squarely atop the list of most expensive video games to develop, definitively knocking down the previous record of $265 million by Grand Theft Auto V. Most other super expensive games have been well-established properties the likes of Final Fantasy, Call of Duty, and Star Wars, with the exception of Silicon Knights’ 2008 flop Too Human at #11.

Analysts speaking to Reuters estimate that the game will have to sell 15 to 16 million units at $60 in order to break even. Doing our own basic math, it would take roughly 8.3 million sales of a $60 game to exceed $500 million. If Destiny sells 15-16 million copies, it will be in the same league with the all-time best-selling titles on the Xbox 360 and PS3, Halo 3 and GTAV, respectively, or on par with the lifetime sales of The Sims. Activision is taking a serious bet that Destiny will be one of the biggest titles in gaming history.

Activision is committed for the long haul, with plans to develop Destiny into their “next billion-dollar franchise.” It sees this upfront cost as not just for one game, but as an investment in a next generation engine and a “robust backend infrastructure” to reduce future development costs. Bungie practically defined a decade of mainstream gaming with Halo, and now Activision is gambling that it will be able to do it again. Only time will tell if Destiny will be our density, or just a cautionary tale we tell about spending too much on a game.