Pachter: GTA V costs $80 million to develop

It hasn't even been officially announced, but it still manages to grab headlines. Wedbush Morgan analyst Michael Pachter has issued an investor note, in which he estimates that Grand Theft Auto V development costs have already reached $80 millioin.

[Inside_out]

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M$ PAID 50+ million just for exclusive timed DLC for GTA 4...lol...these guys will make a small fortune on GTA 5...EVERYBODY knows that.

Expect EA to start running around trying to buy them...AGAIN. I doubt M$ will ever get involved in that kind of deal again as well even tho Take-Two has been trying to generate another deal like that. I think that was one of the first VERY BIG nails in Robbie Bach coffin.

[Micro_Sony]

Yeah but how do you know MS did not make a profit from that?

Some times you have to spend money to make money and we know what companies spend but we don't know how much they name in return being.

MS spent allot on Kinect but from what I am seeing its been selling pretty good.

[gamingdroid]

People tend to only look at the up-front investment, but with things like this you need to dish out the money to secure your spot as somebody your partners are willing to invest into.

For platform business, your customers aren't just the paying ones, but also includes the content developers.

That $50 million might sound like a lot, but it helped MS start a console business that is worth far more than that now.

Same thing with Kinect, it might have cost $500 million to advertise (unsubstantiated rumor), but it brought in up-front sales of 10 million Kinect at a price around $150 a pop, that's $1.5 billion! ... and that is just the start.

Profits will obviously be less cost, but they now have a secondary business. By all accounts, that is far cheaper than introducing a new console platform.

[SilentNegotiator]

"Yeah but how do you know MS did not make a profit from that?"
Unless they sold over 2 million things of DLC on XBL alone, they did not. And since MS nor RS bragged about any such numbers, I say it's fair enough to say that they did not.

"Same thing with Kinect, it might have cost $500 million to advertise (unsubstantiated rumor), but it brought in up-front sales of 10 million Kinect at a price around $150 a pop, that's $1.5 billion!"
I guess Kinect didn't cost them any money at all to produce, then, eh? They sell them at less than $150 to the retailers, and they cost money to MAKE.

[Micro_Sony]

@Silent I wont go into marketing 101 with you as you seem to not understand how economics works.

[gamingdroid]

Well if you read the paragraph right below that, note I said:

"Profits will obviously be less cost, but they now have a secondary business. By all accounts, that is far cheaper than introducing a new console platform."

That said, go to any company on the stock index. See their earnings relative to their stock price. It's usually around 10-20 times their earnings, because a business doesn't just earn money the first year, they do it over time. If MS made a $100 million profit on Kinect, at a rough minimum estimate, the business would be worth a bilion!

The Kinect device itself is only part of the earnings picture, what about sales of digital content, games, accessories, consoles, market penetration and brand recognition?

Imagine a no-name company trying to start a console now, even the likes of Google or Samsung would have problems.

It's almost a miracle MS made it as they were the butt joke in 2001, but today they have a larger market share than the king, Playstation.

[sikbeta]

GTA went to a point in which it has so much value and R* knows that, being to damn expensive trying to make a timed exclusive deal, MS got episodes probably as the best deal without spending as much money comparable to creating your own army of dev studios to secure a GTA game exclusive for a year or so, it's not productive, it's too big, you think Sony would not want to secure a GTA game? of course they want and they could, given the relation R* and SCE-WWS have, but it's not sustainable, too expensive to even think about...

[r1sh12]

MS did make a profit on it, by allowing the DLC to go over to the ps3 and pc.
So every person who paid for it on pc and ps3 gave MS a little money.
It was a good deal which got xbox sales up.
There was an article ages ago which gave stats on what profit MS made from Sony sales of the DLC

[Burning_Finger]

I'm sure they will make another full price DLC to cover the cost.

[KMCROC]

I see a price increase coming soon for retail games.

[Gameplay999]

Very interesting indeed. I wonder how much Red Dead Redemption cost.

Personally I think Saints Row the Third is looking pretty great graphics wise, and over the top craziness as usual.

I am sure Rockstar North has learned from GTA IV and what people like and do not care for. Perhaps they have learned to stretch realism more, just like San Andreas! Personally, I don't want to play around in a wall-to-wall concrete environment again. Give me hills and mountains and forests and you get the idea.

I would like to see a GTA world nearly as big as Just Cause 2.

[Relientk77]

Yay for the game that will become the most overhyped and most overrated game of all time (beating out GTA 4)

[senbonzakura]

GTA XIII

$40 billion to develop!

[blackhammer]

"analyst..."

This article is a joke.

[jopeussr]

How dare you! Pachter is always right ...

[Venjense]

I hope it's multiple discs on 360 I can't imagine another GTA on one DVD

[Yukicore]

This is GOOD news, GTA:IV was an excellent game, it changed gaming world completely, in a good way. I am still playing GTA:IV on my console, and it is still my favorite game, and i have played a lot games. Graphics seem excellent to me.

[mttrackmaster38]

It was a good game but in no way did it change the gaming world.

[Coffin87]

Everything about your comment was more or less believable, except for the graphics part.
Seriously ... http://www.youtube.com/watc...

So my guess would be troll.

[Seferoth75]

Or just someone who doesnt share the same opinion as you.

Troll is becoming a lot like fanboy.

People use it the wrong way.

[Yukicore]

With it's smoothness and lifelike gameplay, it was definitely the first game like that, other games started to use more of "ragdoll" and "free-physics based movements", when they were like every time different. It was definitely noticeable in more games after GTA:IV