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I work in marketing. This question has intrigued me since day 1 of Destiny. The following is an honest, in-depth, well-researched explanation of the $500,000,000.00 budget misconception. EDIT: Posted a reply with sources. Tried to post them within this post but reached the character limit and couldn't fit them all. For most, this will be a TL;DR. I don't blame you. Bungie didn't get $500,000,000.00 to develop Destiny. They got a deal that Activision would invest $500,000,000.00 over a ten year period for the life of Destiny. This includes the Vanilla game, all DLCs, as well as all sequels. That's $50,000,000.00 per year, over ten years. (That may not be the arranged payment structure, but that is what it averages out to). Part of that (a significant part, in fact) goes to marketing. That is a huge chunk of the budget that goes to marketing, and in no way contributes to game development. Another significant part goes to other costs such as distribution, licensing, and other non-development related costs such as getting the game rated in each country of distribution. So to compare: GTA V cost 137 million to develop, and there was 128 million in marketing. Call of Duty: Modern Warfare 2 took 50 million to develop... and had 200 million put into marketing. The Witcher 3: Wild Hunt had a development budget of 46 million, and marketing budget of 35 million. Metal Gear Solid V: The Phantom Pain had an 80 million development budget and has not released it's marketing cost figures. Max Payne 3, Red Dead Redemption, and Too Human, all had development budgets of about 100 million each. The leaked initial development contract for the game authorized payments totaling $140 million to cover Bungie's development and marketing efforts prior to the game's beta. So, if we look at how Activision publishes their games and marketing, using CoD: MW2 as an example, we see it had four times the amount of marketing budget than development spending. 50 million development, 200 million marketing. That is significantly different than the other AAA titles in the list. We also know that Destiny's marketing campaign was pretty big. So of that 500 million, 140 was spent on Destiny 1, vanilla. That is 140 million for development, and marketing combined. So on day 1 of launch, with ten years left, Destiny had a budget of 360 million remaining of Activision's money. If Activision stays true to form, then most of that money is planned to be spent on marketing. So let's say, for sake of argument, that merely half of that money will be spent on marketing. That's 180 million to marketing, and another 180 million to develop 10 more years of content. That now makes our annual budget 18 million. You may think that Bungie increased revenue by making deals with Playstation in the form of timed exclusive content, and Red Bull in the form of driving Red Bull sales with codes. I have not been able to find out in my research how much the Playstation exclusives deal, or Red Bull marketing deal made for Activision or Bungie in hard numbers. We do know, however, that Destiny was originally slated to be an exclusive game to the Xbox 360, and planned for later release to the XBone, then the PS3 & PS4, and finally PC. Due to the timing of events, It is theorized that when Bungie signed a contract with Activision, this changed. Microsoft passed on the exclusivity deal with Destiny, and then Bungie signed a publishing contract with Activision. This is the famous 500 million dollar Activision/Bungie contract. It would make sense to conclude that Bungie signing with Activision was what caused the PS exclusivity, and was a deal that Activision already had in place, or brokered into their budget consideration. This would mean that the 500 million dollar budget from Activision already included the money that Playstation paid for exclusivity. Thus, the Playstation deal would not raise the budget above 500 million. Again with the Red Bull deal, exact numbers are not available after my research. So let's assume they went with a standard brand synergy. In a standard brand synergy contract, Bungie and Red Bull, (or Activision and Red Bull) would sign a contract where both parties agree to put money into a marketing fund that will drive the sales of both products. Each product advertises the other, and sales increase for both. The nature of this marketing campaign is slightly different though. Destiny advertising was featured on Red Bull cans, and in-game codes were included in Red Bull cans. This would drive sales of Red Bull, but there is really nothing in the deal that would make someone go out and buy Destiny merely because of the Red Bull promotion. Because Red bull would be positioned to gain a higher likelihood of actual sales increases, it is almost certain that Red Bull put more money into the marketing campaign than Activision did. Again, following true to Activision form, Destiny merely gets more advertising than any actual revenue. There may have been a clause in the contract in which Activision receives money for each Destiny Red Bull can sold, but it isn't likely. Taking into account the negative reception of the Red Bull content, and the hacking of Red Bull codes, the marketing campaign was probably not as profitable as projected. Either way, it's reasonable to assume that other than marketing and advertising, Activision and Bungie did not gain any money that would be set aside for more game development. So now we are beginning year two, and we can assume of the aforementioned budget of 18 million a year, Bungie has spent 18 million developing in-game content. Now they have nine years left and 142 million dollars for development. If any of the development this year went over budget, then that means there is even less than 142 million. The development budget can get eaten away by hot-fixes, updates, patches, and we know how many of those there have been. Developing Iron Banner, Trials Of Osiris, and the new Raids also eat into the development budget. Even if that content was cut from the original game and just sitting waiting to be used, fine-tuning it to fit within the game and become ready for release still uses up development budget. We also know that Activision had lofty goals for Bungie, and for Destiny's sales. Destiny did not meet those sales goals. With Activision's sales goals not being met, this will also hurt the budget. When a budget is planned, it is planned based on projected sales. When sales do not meet expectations, then the projected budget gets cut. So with not much money left for this next nine years, and development probably going at least a little over budget, Bungie needs an inflow of cash. Sales picked up somewhat with The Taken King, and the holidays, but those sales are absorbed at least somewhat into the disappointing sales at release. So... Here come the micro-transactions. 18 million is not really that much money when it comes to developing content for a game like Destiny. Examples of games that took 18 million dollars to develop: I am just going to copy/paste an extensive list of what games cost to develop over the years, Just so you can see an idea of how far the money actually goes in game development. The more advanced the system is that you are developing for, the more money it costs to develop for it. As you can see, most titles that cost less than 18 million (when adjusting for inflation... for example, Frogger for the Atari 2600 cost 5 million in 1982. That same year, E.T. was released for the Atari 2600 as well. E.T. cost 23 million just for the licensing) were not that great. [spoiler] 1982 E.T. - $23 million Frogger - $5 million 1994 Mortal Kombat II - $10 million Wing Commander III - $5 million 1995 Full Throttle - $1.5 million Twisted Metal - $0.8 million 1996 Crash Bandicoot - $1.7 million Wing Commander IV - $10 million 1997 Crash Bandicoot 2 - $2 million Oddworld: Abe's Oddysee - $2.5 million PaRappa the Rapper - ¥90 million 2012 DC Universe Online - $50 million Ghost Recon: Future Soldier - €50 million The Secret World - $50 million Borderlands 2 - $30-35 million 2013 1666 - $35 million Beyond: Two Souls - $27 million Defiance - $70 million Disney Infinity - $100 million 2014 Destiny - $140 million Watch Dogs - $68 million [/spoiler] That list is merely a reference so you can see what you get for the money when it comes to game development. Having nine years left and about 140 million for development probably has Bungie in a panic. The Activision contract with Bungie is for 4 games over the ten year period. And now Bungie is wondering how they are going to develop 3 more games, along with all of the expected new content, DLCs, patches, hot-fixes, timed events, and ongoing events with a budget that merely equals what they spent on development and marketing of their first game at launch. If micro-transactions don't infuse their cash flow with new life, they may have to cut their losses. It is a very real possibility that they are talking about just spending all of their remaining money on Destiny 2, and hoping for the best. Honestly, that's what I would do. The problem is that abandoning the players of Destiny 1 would really alienate them, and probably hurt sales of Destiny 2 to the point that it would not re-invigorate the franchise. So now they have to figure out a way to make Destiny 2 so amazing that it makes enough sales to fund the next several years without losing it's current customer base. It's a tough position, one that I wouldn't want to be in.

Spent on hookers and cocanie

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Hookers and blow ¯\_( ˘͡ ˘̯)_/¯ [spoiler]( ͡° ͜ʖ ͡°)[/spoiler]

According to what I've found they have already made their money back in sales. As of January 5th, 2015, there were 16 million registered players, on September 17th 2015 there were 20 million. So let's assume that when HoW was released there were 16.5 million registered players and let's drop game price plus l DC to $60. ( the new game plus TDB and HoW was $100) That's 990,000,000 dollars. (990 million). Now, as of November 2015 there are 25 million registered users. Let's assume they bought the ttk edition for an average of $40 and spent no money on silver. That's an addition 340,000,000 (340 million) in sales. Totaling 1,240,000,000 (1.24 billion) dollars which is 2.5 times what activision gave bungie to develop and market the game. If you include micro transactions, plus the cost of the game new and the first two expansions before the collectors edition released that number increases again. I have a feeling that they are not short on money. This is from the research I found. Maybe I'm wrong, who knows. But it helped my 15 minute work break go by hahaha.

It was a typo they meant 50$

Have you seen luke smiths belly? if you have you'd know where 500,000,000 steaks went.