Former The Coalition Producer Says Xbox Engine Costs Add to Hundreds of Millions in Spending
The Coalition’s work on Microsoft’s own branch of Unreal Engine is a major contributor to the studio’s costs, according to former Xbox senior product manager Derek Reese. He said Turn 10 faces a similar situation with ForzaTech.
Developing Gears of War: E-Day could be costing Microsoft substantial sums because other studios are not using The Coalition’s version of Unreal Engine. Reese said he had tried to persuade management to adopt a plan for other studios to use it and share the support costs.
Modern AAA games can cost hundreds of millions of dollars to make, and the source article argues that such budgets are difficult to recoup through sales alone. It says Microsoft faces that challenge as it works to rebuild Xbox’s position.
According to the article, Microsoft prefers other technologies, including ForzaTech, over The Coalition’s version of Unreal Engine. Hundreds of millions of dollars consequently go toward both game development and technological infrastructure.

A significant portion of these costs comes from The Coalition being responsible for developing Microsoft’s own branch of Unreal Engine and one of the company’s flagship projects.
I know this because I tried to persuade management to support a plan for other studios to start using the engine. That would have spread the cost of supporting it.
The situation with Turn 10 and ForzaTech is exactly the same.
Source: iXBT.games
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