StarCraft II cost $100 million to develop

Video game production is in a slump, the world's struggling with the tail-end of the Global Financial Crisis, and Activision Blizzard has spent more than US$100 million developing StarCraft II.

The sequel's been 12 years coming, and expectations are understandably high, with analysts predicting several million units will be sold this year alone - comfortably padding Activision's wallet.

StarCraft Concept Art

Blizzard Concept art from the StarCraft universe

On the surface investing so much into a PC title seems like an odd move - for Activision and most other publishers, console-based retail games have been the cash cow - but this attention-shift is a new trend in the industry as momentum slows. As explained in the Wall Street Journal (subscription link), US game software sales were more than 6% lower in the first five months of 2010, when compared to the same period in 2009 according to NPD. It's also reported that last year's June sales were $2.3 billion, significantly higher than this year's $2.2. (Of course it's worth noting that NPD don't bother with pesky things like Xbox Live, PlayStation Network or Steam, although they are looking to measure spending outside the traditional retail channels.)

It looks like StarCraft II, and the impending release of World of Warcraft: Cataclysm, will help the PC game segment neatly offset the console game decline, and Bobby Kotick, Activision CEO, may be relying on that. Last month, he described StarCraft as one of the company's seven "pillars of opportunity" (where each pillar has the potential to deliver operating profit between $500 million and $1 billion over its life span). He went on to explain that:

"There is no shortage of consumers for 'Starcraft'. For a game that is more than 10 years old, there's millions of people still playing it."

Mmm.

Mmm.

...for those playing at home, Blizzard also control three of the other remaining six pillars, with World of Warcraft and Diablo each getting a spot, as well as their secret new MMO project. Bungie's unnannounced new IP is also up there, with nobody surprised when Guitar Hero and Call of Duty take out the last two. Analysts have observed that these franchises not only have the potential for strong retail sales, but each of them is a pretty decent opportunity for additional online revenue through microtransactions, downloadable content or monthly subscriptions.

And whatever they're doing is obviously working - and not necessarily in straight-forward ways. Blizzard President Mike Morhaime has observed that they're not just attracting old StarCraft fans back to the franchise, but there are a lot of new players in the beta tests who have never played an RTS before but have simply migrated across from World of Warcraft.

July 27th is looming, so I guess we'll find out soon enough how wisely Activision Blizzard invested their $100 million.

UPDATE: July 23, 2010
...actually we do know how well Activision Blizzard invested the money, with the Wall Street Journal admitting they goofed - the $100 million figure they used was actually for development costs of World of Warcraft, not StarCraft II. Oops.

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