The video game industry will likely feel aftershocks from hackers’ raid on Insomniac for months or years to come, but one immediate impact is that we know far more about the Sony studio’s inner workings than we did 48 hours ago. Today, Kotaku’s Ethan Gach, one of the best reporters in the business despite management’s efforts, published a revealing piece about Insomniac’s finances. The picture it paints is pretty bleak.
The piece goes over a series of internal presentations, emails, and meeting notes that were included in the hack and comes away with some telling figures. According to one presentation, Spider-Man 2 cost roughly $300 million to make – nearly triple what it cost to create the first game in Insomniac’s spider verse. This put Spider-Man 2 $30 million over budget, meaning it needs to sell 7.2 million copies to break even (it was, according to Kotaku, at 6.1 million as of November). But shaving a cool $30 million off the top of Spider-Man 3 won’t reverse Insomniac’s fortunes.
“We have to make future AAA franchise games for $350 million or less,” a slide from a “sustainable budgets” presentation earlier this year reportedly reads. “In today’s dollars, that’s like making [Spider-Man 2] for $215 million. That’s $65 million less than our [Spider-Man 2] budget.”
Insomniac has some ideas about where to cut costs on future projects: Cinematics and scene lengths have grown too large, while smarter deployment of production halts and Spider-Man: Miles Morales-style “mid-sized games” – which take less time and cost less money to develop, and sell well (at least in Miles Morales’ case) – could help staunch the bleeding.
Still, budgets continue to balloon, not just at Insomniac but across the industry. That’s the current trend, and in one of the worst years for industry layoffs ever, it’s no secret that companies are struggling to reverse it. The current state of Insomniac makes it apparent that Embracer-style mass-mismanagement isn’t the only way to end up dangling from a precipice in the video game industry. You can be one of the companies Doing Things Right, like Insomniac, and still find yourself on the wobbly knife’s edge of disaster.
This is not to say that Insomniac is doomed or even uniquely in trouble. Instead, it’s symptomatic of a virus afflicting the entire industry. The Insomniac leak, for all the harm it has otherwise caused, spells out in detail the ways in which triple-A game development has become unsustainable.
“Is 3x the investment in [Spider-Man 2] evident to anyone who plays the game?” asks one presentation slide.
And while nothing is set in stone, Insomniac could soon join the ranks of studios ravaged by layoffs. Sony, it seems, is demanding budget cuts, while Wolverine is in danger of slipping from 2025 to 2026.
“Slimming down Ratchet and cutting new IP will not account for the reductions Sony is looking for,” Insomniac head Ted Price said in a November presentation note. “To remove 50-75 people strategically, our best option is to cut deeply into Wolverine and Spider-Man 3, replacing lower performers with team members from Ratchet and new IP.”
Sony has not replied to questions from Kotaku about whether these cuts are still on the table, but other Sony-owned studios like Bungie and Naughty Dog have recently suffered from layoffs. Here’s hoping it doesn’t come to that, but if it does, it won’t be the first time, and at the rate things are going, it likely won’t be the last.
