Why does it cost some companies hundreds of millions of dollars to make a popular video game?

A few weeks ago, The New York Times blamed it the never-ending quest to deliver more photo-realistic graphics– and suggested that the industry is starting to see diminishing returns, leading to layoffs and studio closures.

However, Bloomberg’s Jason Schreier this analysis argues is “a bit off the mark.” He does not deny that budgets have increased significantly ($20 million for Naughty Dog’s “Uncharted 2” in 2009 compared to $220 million for their “Last of Us Part II” in 2020) or that graphics have a role , but he says it’s true. Starting to require bigger teams for longer periods of time — because of the improved graphics, yes, but also the growing range of games.

Furthermore, he writes that “everyone” who has spent at least a few years in the industry has “their own horror story” about management decisions such as “a feature that got canceled because the teenage kid on CEO doesn’t like it” or groups of hundreds of people “confused in pre-production as they try to figure out what the game’s ‘core loop’ looks like.”

So if game companies are really worried about ballooning budgets, Schreier says they should focus their “introspection” on the mismanagement that can waste everyone’s work and time.