Blizzard Cancelling Titan Might Have Cost the Company $50 Million Or More, Analysts Say
"The market is just not in a place where you can have games with 7+ year development."
Blizzard Entertainment's surprise cancellation of its long-in-development MMO Titan, which was never actually officially announced, might have cost the developer $50 million or more. That's according to a survey of financial analysts featured on GamesIndustry International.
First up, independent analyst Billy Pidgeon said that although cancelling Titan may have cost Blizzard tens of millions of dollars, releasing a game that didn't meet player expectations could have also had adverse effects. He also says Blizzard's years of work on Titan might not be wasted, as some of the infrastructure and creative learnings can be applied to other projects.
"Development costs for Titan may have amounted to tens of millions, perhaps $50 million or more," Pidgeon said. "This is not an unusual event, however. Blizzard has cancelled several games in various stages of development in the past. Costs for unreleased games can be significant, but launching substandard games can harm the reputation of a successful publisher such as Blizzard. Expenses for development can be considered R&D, and benefits can include invaluable training, IP and technology that can be applied to other games."
"It's pretty sad that it took so long to figure out how bad the game was" -- Michael Pachter
Wedbush Securities analyst Michael Pachter said Blizzard might have spent much more than $50 million on Titan. He estimated that Blizzard had 100-200 people working on the game, each drawing an average yearly salary of $100,000. This comes out to between $70 million and $140 million in "sunk cost," he said. "It's pretty sad that it took so long to figure out how bad the game was. I expect them to go back to the drawing board," he added.
DFC Intelligence analyst David Cole added that he thinks Blizzard will continue to focus on "high quality products," but also games that have shorter development cycles and thus less cost. "The market is just not in a place where you can have games with 7+ year development," he said. "It is changing too fast."
Explaining Titan's cancellation yesterday, Blizzard co-founder Mike Morhaime said: "We didn't find the fun. We didn't find the passion. We talked about how we put it through a reevaluation period, and actually, what we reevaluated is whether that's the game we really wanted to be making. The answer is no."
Another Blizzard executive, Christ Metzen, added that the decision to cancel Titan was "excruciating."
Eddie Makuch is a news editor at GameSpot, and you can follow him on Twitter @EddieMakuch