Naughty Dog Founder Cites ‘Rising Costs’ as Reason Behind Sony Acquisition

Andy Gavin, one of the masterminds behind Naughty Dog alongside Jason Rubin back in 1986, has been quite active on LinkedIn lately, reminiscing about the early days of the company. In a recent post, he delved into the financial journey of the studio, including what it initially cost to produce some of their earliest games and how the ever-climbing expenses eventually led them to sell to Sony in the year 2000.

He noted, “Our early games in the 80s were made for less than $50,000 each. Things started to change with Rings of Power (’88-’91), which cost about $100,000, but it thankfully did bring in a bit more than that in profits by 1992. By 1993, we used that $100,000 from Rings to self-finance Way of the Warrior. However, Crash Bandicoot (’94-’96) was a different story, hitting $1.6 million to produce. Fast forward to Jak and Daxter (’99-’01), and the costs soared past $15 million. Come 2004, developing big titles like Jak 3 skyrocketed to $45-50 million, and the numbers have only grown since.”

Facing such financial pressures, they decided on the Sony acquisition. As Gavin candidly shared, “The stress from handling such massive budgets ourselves was overwhelming. Selling to Sony wasn’t just about securing Naughty Dog’s financial future; it also meant having the backing to keep crafting top-tier games without being buried under the weight of ever-rising costs and the dread that one slip-up could collapse the whole thing.”

Gavin’s reflections sparked a lively discussion in the comments, drawing input from other industry veterans. James Marcus, a senior artist on Splitgate 2 at 1047 Games, remarked, “It’s disheartening to see these costs escalate so dramatically. It has cornered many developers into playing it safe creatively or seeking refuge in big corporations to sidestep financial ruin from a potential flop.”

However, being acquired by giants like Sony isn’t always a bed of roses. There’s the risk of restructuring and inevitable layoffs, as Naughty Dog experienced in Sony’s 2024 cuts. Firewalk Studios, creators of Concord, didn’t fare much better after Sony’s acquisition in 2023. Despite the high hopes, Concord launched only for the studio to be abruptly shut down afterward. So, getting acquired by Sony is a mixed bag at best. Yet, the surging costs of AAA gaming are an undeniable, pressing reality.