Naughty Dog Co-Founder Reveals Reason for Selling Studio to Sony
Andy Gavin, co-founder of Naughty Dog, recently shared that the decision to sell the renowned studio to Sony was driven by the escalating costs of game development. In a frank post on LinkedIn, Gavin disclosed that the leadership team was facing immense pressure due to rising budgets, ultimately leading to the sale of Naughty Dog to Sony to ensure its future.
Roots of Naughty Dog: From 1984 to Acquisition by Sony in 2001
Originally established in 1984 as JAM Software, Inc., Naughty Dog had been in operation for close to two decades before the mounting costs of game development necessitated its acquisition by Sony Computer Entertainment. According to Gavin (via Game World Observer), the budget for Jak and Daxter between 1999-2001 had surpassed the $15 million mark.
“By 2004, the production cost of AAA titles like Jak 3 had risen to $45-50 million — and this figure has only continued to climb since then,” Gavin shared. “Back in 2000, we were funding each project independently, and the pressure of financing these escalating budgets on our own was overwhelming.”
Gavin also highlighted that budget constraints remain a significant challenge in the AAA game development sector, with Naughty Dog not being the sole studio to opt for a sale in order to secure the necessary funding for game development.
“Reflecting on it now, it was the correct decision,” Gavin reflected. “The cost of AAA games has only increased over time. Present-day high-budget titles can easily require $300, $400, or even $500 million for development.”
Following the sale to Sony, Gavin, along with co-founder Jason Rubin, departed from Naughty Dog in 2004.