Naughty Dog co-founder says he sold the company to Sony because “budgets were skyrock

For almost as long as the developer has existed, Naughty Dog has been pumping out high quality games that have resonated with millions of players across the decades. The company was founded in 1984 and remained independent for quite some time, but after the massive success of Crash Bandicoot, the company was suddenly acquired by PlayStation creator Sony in 2001. Now, over 20 years later, we finally know why. 

In a post on LinkedIn, Naughty Dog co-founder Andrew Gavin spoke candidly – and publicly – for the first time about why he and fellow co-founder Jason Rubin sold the company to Sony. The short of it is that game costs were ballooning and the developer was self-funding all of its projects. Despite being profitable, Gavin said “the stress of financing these ballooning budgets independently was enormous.” 

“By 2004, the cost of AAA games like Jak 3 had soared to $45-50 million – and they have been rising ever since,” Gavin said in the post. “But back in 2000, we were still self-funding every project, and the stress of financing these ballooning budgets independently was enormous. It wasn’t just us. This was (and still is) a systemic issue in the AAA space. Developers almost never have the resources to fund their own games, which gives publishers enormous leverage.” 

Gavin says that selling the studio was the right call in hindsight, given the cost of making new games in the triple-A is still going up. Naughty Dog might have been able to keep up, he speculates, but it was far from a guarantee, and the security that a major company like Sony offered was too valuable to pass up. 

“Selling to Sony wasn’t just about securing a financial future for Naughty Dog. It was about giving the studio the resources to keep making the best games possible, without being crushed by the weight of skyrocketing costs and the paralyzing fear that one slip would ruin it all.” 

Both Gavin and Rubin left the company in 2004, shortly after the sale to Sony, but it’s gone on to become one of the biggest studios in gaming today, having seen massive success with series like The Last of Us. At The Game Awards 2024, Naughty Dog revealed its next big IP, a retro sci-fi bounty hunter RPG called Heretic: The Heretic Prophet.