Publishers disagree on Xbox 720, PS4 game development costs

Gaming publishers Activision, Take-Two, and Ubisoft have begun weighing in on the potential costs of game development for next-gen consoles. Over time, as development costs have skyrocketed with new technology, with consumers' wallets bearing much of the burden. Now, with the PlayStation 4 and Xbox 720 presumably on the horizon, there's some worry that next-gen development on the new consoles could further increase the costs of games. At $59.99 a pop, gaming is already an expensive hobby; how much higher can it go?

Well, that depends on who you ask. CEOs of both Ubisoft and Take-Two seem in agreement that next-gen development costs won't increase nearly as much as we've seen in the past — at least in the short term.

"What we've said is that, for the first two years of those machines, the costs will not increase because we can use a lot of the engines that we've already created," said Ubisoft CEO Yves Guillemot.

In Take-Two's recent investor call, CEO Strauss Zelnick echoed that statement. "We don’t have any reason to believe our development budgets will change significantly," he said. "If anything we have become – group-wide – much tighter in terms of how we spend our money."

But not all publishers are of this belief. Activision CEO Bobby Kotick, with his 22 years of experience, is a little more skeptical about the rising costs.

"This is my 22nd year doing this, and in every single console transition, we've seen an increase in development costs. Over long periods of time, it gets smoothed out, but I would say this is not a transition where that's going to be an exception," he said.

"We're going to have to figure out how to take advantage of the unique capabilities of new hardware, and that requires new skills and investment in tools and technology and engines and so yes, that's likely," he acknowledged.

If the rumors are true, and Sony and Microsoft are set to reveal their new consoles this year, then odds are these guys have a pretty good idea of the costs already. Then again, the differences in agreement could be a result of some being better equipped to handle the transition. The good news is that Sony and Microsoft's new consoles are both rumored to be much closer to a traditional PC in design, which could help lessen the cost for development.

Sony is expected to unveil the PlayStation 4 at an event later this month, but I don't expect they'll disclose any pricing.

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