Bungie has laid off and relocated a large portion of its staff and admits it is in the red. Is Sony’s $3.6 billion acquisition a bad investment?
The one of Bungie It was the most expensive acquisition during Sony’s acquisition campaign in recent years. The Japanese company spent well $3.6 billion in 2022 to annex it to its stable, while leaving it decision-making and creative independence, with the aim of access its “know how” in the field of live service games to “expand PlayStation to hundreds of millions of players”. After all, we’re talking about the team behind Destiny, a series that despite some slip-ups still attracts a lot of players today, and the idea of making it a sort of supervisor and linchpin of the strategy based on the development of over 10 GaaS by 2026 launched during the era of former CEO Jim Ryan didn’t even seem so bad.
Yet, something must have gone terribly wrong in Sony’s grand plan: not only has Bungie not turned out to be a profitable purchase for the time being, at least from the point of view of those who enjoy the games, but the recent wave of layoffs and red numbers confirmed by CEO Pete Parsons paint a worrying picture of a studio with great potential but also problematic to manage.
Bungie’s Disastrous Management of the Last 5 Years
I’ll recap for those who missed the latest: after the approximately 100 roles eliminated last year, yesterday Bungie announced the firing of another 220 people (17% of the total), while 155 more members will be integrated into the SIE staff (who would otherwise have been fired themselves). Added to this is the transfer of an unspecified number of employees to PlayStation Studios for start a new team who will be taking care of a project previously in development within the studio based on a new IP.
If the number of people fired or transferred is already worrying, the long press release from CEO Pete Parsons, strangely more detailed and clarifying than the circumstantial ones that are usually shared in these cases, speaks of a difficult situation within the firm that has been going on for yearsAiming very high, perhaps too high, the studio had planned to divide their efforts into “three popular and enduring franchises”. One is definitely Destiny, the other will probably be Marathon (which seems to have undergone drastic changes to its structure, according to a report by IGN), while for the third slot, the hope was for one of the many incubated projects started by the studio over the years and which apparently did not bear fruit (IGN also claims that the new IP Matter was scrapped in 2020, that another unnamed project was scrapped in 2022, while the MOBA codenamed “Gummy Bears” would have been put on hold at best).
What went wrong? According to Parsons, the mistake was that assign active team leaders to incubation projects with uncertain futuresweighing on the shoulders of the development of Destiny 2 (and at this point it is no coincidence that The Eclipse was a popularly bad expansion) and on those of Marathon. At the same time, the massive hiring campaign launched in recent years, which brought the total staff to over 1,300 people (definitely a lot for a studio that currently has only Destiny 2 as an active project on the market) ended up like all the others launched by the big names in the industry during the Covid-19 parenthesis: as soon as the gaming bubble burst and the numbers spiked by the pandemic began to drop, the axe fell on the staff.
The red numbers and Sony’s intervention
Not only did the development of Destiny 2 and Marathon suffer, but this division of the workforce across multiple projects It also drained Bungie’s financeswith Parsons himself saying that the studio’s accounts had started “going into the red.”
In all of this, Sony Interactive Entertainment is the one that is putting up the money and the fact that it has granted decision-making and creative independence does not mean that it cannot act directly in the event of an economic hole of this magnitude being created. It is probably the company led by the two co-CEOs Hermen Hulst and Hideaki Nishino that has imposed the layoffs and the transfer of part of the staff within the parent company (which will presumably be divided among the various teams of PlayStation Studios) and that, according to sources of journalist Jeff Grubb, has now decided to revoke the autonomy granted at the time of acquisition to transform Bungie into a studio under its direct control. Whether this will be a good or bad thing, only time will tell.
Those who fear the studio’s closure can sleep soundly for now: Bungie has confirmed that it has Still 850 active employeesa staff that is more than large enough to maintain high levels of support for Destiny 2, develop Marathon, and probably even move on to new projects. But it’s clear that something about the studio’s strategy and that of Sony, who invested $3.6 billion in it and supported it, has gone terribly wrong, and unfortunately the current state of the AAA video game industry, with ever-increasing costs and ever-shrinking profits, simply doesn’t allow for any margin for error.
This is an editorial written by a member of the editorial staff and is not necessarily representative of the editorial line of Multiplayer.it.
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