Andrew Gavin, the co-founder of Uncharted developer Naughty Dog, has explained in a lengthy post on LinkedIn why the studio was sold to Sony nearly 25 years ago.
While he departed Naughty Dog in 2004, Gavin worked at the Crash Bandicoot creator for nearly 20 years, and explained that he is often asked why the company was sold. In a nutshell, it was due to the rising costs of game development.
Why did we sell Naughty Dog? It’s a question I’ve been asked countless times. The answer is simple: budgets were skyrocketing.
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When we started Naughty Dog in the 1980s, game development expenses were manageable. We bootstrapped everything, pouring profits from one game into the next. Our early 80s games cost less than $50,000 each to make. Rings of Power (’88-91), saw budgets rise to about $100,000, but yielded slightly more than that in after tax profits in 1992.
In 1993, we rolled that $100k from Rings into a self-funded Way of the Warrior. But Crash Bandicoot (’94-96) cost $1.6 million to make. By the time we got to Jak and Daxter (’99-01), the budget busted the $15 million mark. By 2004, the cost of AAA games like Jak 3 had soared to $45-50 million – and they have been rising ever since. But back in 2000, we were still self-funding every project, and the stress of financing these ballooning budgets independently was enormous.
Naughty Dog has enjoyed huge success while under the Sony umbrella, spearheading franchises such as Jak & Daxter, Uncharted, and The Last of Us. Its latest project, titled Intergalactic: The Heretic Prophet, was announced during December 2024’s The Game Awards.