Naughty Dog Founder Reveals Sony Acquired the Studio Due to Rising Budgets

In the fast-paced world of game development, Andy Gavin stands out with his compelling anecdotes. As one of the founders of Naughty Dog back in 1986, alongside Jason Rubin, Gavin is notably active on LinkedIn, sharing intriguing snippets from the company’s formative years. Recently, he took us on a journey through the escalating financial demands the studio faced, revealing how this paved the path toward a significant decision: Naughty Dog’s acquisition by Sony in 2000.

Gavin’s stories give us a glimpse into the financial landscape of game development over the years. “During the early ’80s, our games were made with budgets under $50,000 each,” he reminisced. He explained that “Rings of Power,” developed between 1988 and 1991, cost around $100,000, and managed to bring in modest profits by 1992. The stakes grew higher with “Way of the Warrior” in 1993, which was self-funded with profits from “Rings.” But then came “Crash Bandicoot” between 1994 and 1996, a project that raised the bar significantly with a $1.6 million budget. By the time “Jak and Daxter” came around in 1999 through 2001, the price tag had skyrocketed to $15 million. Fast forward to 2004, and AAA titles like “Jak 3” demanded budgets upwards of $45-50 million—a trend that has only continued.

These swelling costs were a major factor nudging Naughty Dog toward Sony’s open arms. As Gavin explained, managing such enormous financial burdens independently became a daunting task. “Aligning with Sony wasn’t just about financial stability,” he pointed out. “It was about empowering the studio to continue crafting top-notch games without the looming anxiety that one financial misstep could unravel everything.”

Gavin’s candid reflections have ignited discussions among industry insiders. Commenting on his post, James Marcus, a senior artist with 1047 Games working on “Splitgate 2,” lamented, “The rising costs are stifling. It’s sad to see that many developers play it safe creatively or choose to sell to big corporations to steer clear of financial disaster if a game doesn’t succeed.”

However, being acquired by giants like Sony isn’t always a silver bullet. Studios sometimes face restructuring and layoffs, as Naughty Dog experienced with Sony’s 2024 staffing cuts. Take Firewalk Studios, for example, creators of “Concord.” Sony acquired them in 2023, yet the studio was shuttered shortly after the game launched, suggesting that acquisitions are not always a guarantee of success. It’s clear that while the ever-climbing expenses of AAA titles are a harsh reality, the consequences of these business maneuvers remain unpredictable.