Gears of War: E-Day Studio Was Paid $500 Million to Work on Unreal Engine, Other Projects – Rumor

A new report indicates that there is more to the reported $500 million budget for Gears of War: E-Day than meets the eye.

Posted By | On 02nd, Nov. 2026

Gears of War E-Day_02

While there have been many questions regarding the success of The Coalition’s Gears of War: E-Day, especially following reports that it cost $500 million to make, a new report by Windows Central’s Jez Corden has noted that the budget doesn’t exactly tell the full story regarding the project. While Corden has corroborated the reported $500 million being allocated to The Coalition between the release of Gears 5 and Gears of War: E-Day, there is seemingly more to how this allocation took place.

One of the biggest factors regarding the allocation is the fact that The Coalition has been helping with the development of Unreal Engine for other Xbox studios. Former senior Xbox employee Derek Reese made a note of this on social media, where he said that the company has been “on the hook for the Microsoft branch of Unreal and one of the flagship titles.”

The Gears of War developer also spent some time during the period working with Epic Games on the Matrix Awakens demonstration that was used to showcase the capabilities of Unreal Engine 5. Since this was also in the midst of a global pandemic, shortly after Rod Fergusson had left the company, The Coalition was also in what Corden describes as a “dormant state” while Microsoft was figuring out the studio’s future.

Following this, the studio worked on a prototype for more than a year and a half. This prototype, however, would not see the light of day, ultimately getting canceled. In the meantime, The Coalition continued to work as a support studio on projects like Avowed, Grounded, Grounded 2, and Hellblade 2, and even upcoming games like State of Decay 3, Clockwork Revolution, and the StarCraft shooter.

With these details in mind, it could be easy to see where much of the $500 million went, since The Coalition worked on a wide variety of projects while also working as the lead engineering team for Microsoft’s branch of Unreal Engine. However, with Xbox seemingly looking at making some more cuts later this month, The Coalition could end up being one of the targets.

Reports about Gears of War: E-Day costing $500 million first started popping up a couple of weeks ago. With analysts estimating around 230,000 copies of the title having been sold, this would make the investment seem quite bad for Microsoft. However, at the time, Corden had noted in a now-deleted tweet that, “They ain’t wrong on the figure, but seems to be some disagreement among my sources how that figure was allocated between E-Day and general TC operations/ATG contributions.”

It is also worth noting that Gears of War: E-Day is one of the first major titles that Xbox is using as part of its strategy to return to exclusives. However, Circana analyst Mat Piscatella doesn’t believe that this strategy has led to tangible benefits, especially when compared to Marvel’s Wolverine.

For more details on Gears of War: E-Day, take a look at our review. And while you’re at it, also check out our thoughts on its multiplayer.


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