Naughty Dog Co-Founder Explains What Led to It Being Bought by Sony

The co-founder of Naughty Dog has explained one of the main reasons behind the sale of the developer to Sony: finances. As the cost of game development has risen over the years, Naughty Dog and other studios have had to consider the cost and financial risks of developing games.

Many fans of Naughty Dog games only know the developer from its time under the wing of Sony, but the dev was acquired way back at the turn of the century in 2001. Based on recent comments from the co-founder, Naughty Dog classics like the Uncharted series and The Last of Us may not have ever existed without Sony’s support, or at least not in the way that fans have come to know them.

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In a post on LinkedIn, Naughty Dog co-founder Andrew Gavin responded to a question he frequently gets about why Naughty Dog was sold to Sony in the first place. He explained that due to ballooning game development budgets, the sale became a necessity in order to “keep making the best games possible” without being “crushed” by skyrocketing budgets. He explained that in the very early days of Naughty Dog, the games developed by the studio cost less than $50,000 USD to make, but started to rise with Rings of Power, which was $100,000 to produce. By the time Crash Bandicoot came along, the game cost a whopping $1.6 million.

Game Costs Kept Rising for Naughty Dog

As Gavin puts it, in the very early days at the studio, the games were funded by “bootstrapping,” and profits were taken from one game and put into the development of the next. However, that couldn’t last with the budgets going up so much. Jak and Daxter was a $15 million game, while Jak 3 had risen to somewhere between $45-50 million. He notes that modern AAA games “can easily cost $300, $400, or even $500 million to develop.” With that said, The Last of Us 2’s budget didn’t quite reach those numbers, taking $220 million to produce back in 2020.

• Naughty Dog’s early 1980s games: $50,000 budget (Roughly $140,000 accounting for inflation)
• Rings of Power: $100,000 budget (Roughly $225,000 accounting for inflation)
• Crash Bandicoot: $1.6 million budget ($3.2 million accounting for inflation)
• Jak and Daxter: $15 million budget ($27 million accounting for inflation)
• Jak 3: $45-50 million budget ($75-84 million accounting for inflation)
• The Last of Us 2: $220 million budget ($268 million accounting for inflation)

Gavin’s statements seem to mirror other comments made in the industry in recent years, with game developers and publishers saying that the price of games needs to increase, as it’s largely remained stagnant while inflation and budgets have continued to rise. Of course, not all modern games require massive budgets in order to be successful. Indie titles frequently make waves with very limited budgets. However, for Naughty Dog, which is now known for its recent games involving incredibly impressive, lifelike visuals, full teams of actors and performers, and a full development team, it’s easy to see why he says that selling had to happen for the studio to afford the costs involved in its modern-day games.

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Naughty Dog

Date Founded

September 9, 1989

Headquarters

Santa Monica, California, United States

CEO

Neil Druckmann

Parent Company

Sony Interactive Entertainment
, PlayStation Studios