Marketing Budgets Reach For The Stars

Seems like Call of Duty: Modern Warfare 2 is tearing up the record books, booking $550 million in sales in just 5 days. Not bad even when you break down the budget a bit, as revealed here. Seems like Activision is admitting to spending roughly $50 million developing the game, and another $150 million in marketing and packaging expenses. Here's a hint... I don't think the majority of that $150 million was packaging costs. (I might believe about $20 million, given that they've sold around 8 to 9 million units... though with that sort of quantity the unit cost has to be pretty darn low.) So a marketing budget in the neighborhood of $130 million... further separating the "haves" from the "have-nots"; games with big-time marketing budgets, and the rest of 'em.

I do wonder if it was really necessary to spend that much for a title that was already destined to sell well... I would have pocketed half the marketing budget and bet on the game doing as well with half the expenditure. I think there's some element of company promotion and stock price support inside of all that spending... perhaps it's not a coincidence that this week Bobby Kotick (CEO of Activision) sold a cool $37 million dollars worth of Activision stock. Hmm, betting the stock will go down in the future? You're not likely to get a Modern Warfare every quarter, or even every year.

Having dealt with multimillion dollar marketing budgets as well as multi-hundred dollar budgets, I can tell you it's sure easier with lots of money. Doesn't mean that you should spend like crazy, though, unless there's some other reason than just trying to get one product to sell well.

Like, for instance, making sure the stock price is nice and high.