I am quite sure that some in the gaming industry are still reeling over the fact that Blizzard actually took the decision to cancel a 7-year project in the form of Project Titan, an MMORPG that never came to be. Apart from all of that time and manpower invested in the project, the bean counters would definitely want to take a closer look at just how much all of it will cost the company, and analysts have stepped forward with their preditions that Titan’s cancellation might have actually
cost Activision-Blizzard somewhere to the tune of $50 million thereabouts.
According to independent analyst Billy Pidgeon who made mention to GI International, this particular cancellation has detrimental effects to the company’s bottom line, saying, “Development costs for Titan may have amounted to tens of millions, perhaps $50 million or more. 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.”
Wedbush Securities’ Michael Pachter is even more ambitious with his suggestion, pointing to close to triple the amount at $140 million in cost. His justification? “My guess is 100-200 people at $100,000 per year, so $70-140 million sunk cost. 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.”
Do you think this spells trouble for Blizzard? Image courtesy of Kotaku.