Video Game Development Budgets Drop 60%

May 1, 2009 Written by Richard Allen


It appears the economy has taken a comprehensive toll on the gaming industry. DevelopMag is reporting that gaming budgets have dropped 60 percent from last year.  This hasn’t seem to affected Sony first party developers, as much of the layoffs have been from multi-platform developers.

Put simply, in the last four or five months there has been a collapse in venture capital and, more broadly, private equity funding for privately-held games companies. And I deliberately use the word collapse. Private funding for games companies worldwide since the start of 2009 is tracking down a staggering 60 per cent on last year and close to 70 per cent on the year before that. Combine this with the strong allergic reaction banks are currently exhibiting to the idea of lending to most small and medium sized companies, let alone hit-driven ones, and one could conclude that the once-plentiful wellspring of non-trade finance for privately owned games companies is rapidly drying up.