Ironically, Bungie told Naughty Dog not to go “all in on a live service game”

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With all of the controversy surrounding Bungie’s layoffs recently, its wider business practices have come under the spotlight. It turns out, according to Jason Schreier, that it had been involved in peer-reviewing The Last of Us: Online, leading to Naughty Dog not going all-in on a live-service title. Ironically, this is one of the precepts that forced Bungie’s mass restructuring.

Schreier began by alluding to the fact that “Destiny 3 was not cancelled because it was never in development.” The topic quickly shifted away from this idea, and instead focused on “how a studio that hasn’t made a good game since 2010 (Halo Reach) can tell Naughty Dog (a studio that makes critically acclaimed games) to cancel a project,” as FarhaanBBR put it.

The Bloomberg reporter then went on to say that “Bungie gave Naughty Dog feedback that Naughty Dog found extremely helpful when making what was likely a very smart decision to not go all in on a live service game.”

In May 2023, Schreier published an article for Bloomberg stating that the “‘Last of Us’ multiplayer video game faces setbacks at Sony,” and there was a specific line stating the following:

Sony has invested heavily in “games as a service,” or video games designed to be monetized beyond their initial sales through ongoing purchases. As part of that push it asked another of its video-game studios, Seattle-based Bungie, to evaluate the games across its portfolio. Bungie raised questions about the The Last of Us multiplayer project’s ability to keep players engaged for a long period of time, which led to the reassessment.

Schreier’s tweets go on to point out examples of “single-player studios pivoting to make service games such as Anthem, Suicide Squad, Marvel’s Avengers, Redfall, and so on,” suggesting that there should be no outrage at TLOU: Online’s cancellation.

The Last of Us Online, concept art via Naughty Dog.

Bungie has been working closely with Sony’s entire portfolio of games and offering consultancy on live-service production. Ironically, Bungie has now folded under its own weight. It said:

For over five years, it has been our goal to ship games in three enduring, global franchises. To realize that ambition, we set up several incubation projects, each seeded with senior development leaders from our existing teams. We eventually realized that this model stretched our talent too thin, too quickly.  It also forced our studio support structures to scale to a larger level than we could realistically support, given our two primary products in development – Destiny and Marathon. 

Additionally, in 2023, our rapid expansion ran headlong into a broad economic slowdown, a sharp downturn in the games industry, our quality miss with Destiny 2: Lightfall, and the need to give both The Final Shape and Marathon the time needed to ensure both projects deliver at the quality our players expect and deserve. We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red. 

After this new trajectory became clear, we knew we had to change our course and speed, and we did everything we could to avoid today’s outcome. Even with exhaustive efforts undertaken across our leadership and product teams to resolve our financial challenges, these steps were simply not enough.

Marathon, via Bungie.

Despite Bungie’s own warning that creating convincing live service games is hard, it continued to pile forward with Destiny 2 and Marathon, alongside its other projects, ultimately forcing its hand with mass layoffs. Who could have seen this happening.

About the Author

Amaar Chowdhury

Amaar is a gaming journalist with an interest in covering the industry's corporations. Aside from that, he has a hankering interest in retro games that few people care about anymore.