Bungie leadership reportedly ‘overstated studio’s financial prospects’ to Sony, leading to need for layoffs

Following yesterday’s mass layoffs at Destiny 2 developer Bungie – in which 220 employees lost their jobs – a new report has claimed the cuts were a result of Bungie leadership ‘overstating the studio’s financial prospects’ to Sony, which acquired the developer in 2022.

That’s according to sources interviewed by journalist Stephen Totilo, who, writing in his GameFile newsletter, reports yesterday’s job cuts were necessary to stem Bungie’s continued financial losses. The studio is said to have repeatedly missed financial targets promised to Sony, and has reportedly lost money since the release of Destiny 2 expansion Lightfall in 2023.

Totilo claims yesterday’s layoffs – the second round of job cuts in less than a year – had long been planned, and “couldn’t be avoided” even if this year’s Destiny 2 expansion, The Final Shape, had “blockbuster performance.” Bungie management reportedly concluded last year – amid poor sales and a dwindling Destiny 2 player base – it would need to “make deep cuts to show Sony’s executives that it was taking its finances seriously”, with the studio’s autonomy – and management jobs – apparently on the line if it failed to meet its targets.

That tallies with reports from IGN last year, in which numerous Bungie employees told the publication the mood at the studio was “soul-crushing” as leadership implemented harsh cost-cutting measures, apparently in a bid to cling onto independence.

Totilo notes Sony’s gaming division has reported slimmer profits in recent times, and that when Hermen Hulst and Hideaki Nishino replaced outgoing PlayStation CEO Jim Ryan earlier this year, they wrote, “Expectations for us are high and we aim to drive improving profitability.” However, Totilo’s sources say employees have little animosity for Sony over the cuts, with many instead blaming Bungie management for promising unrealistic growth – an attitude reflected in staff social media posts slamming studio CEO Pete Parsons following yesterday’s layoffs.

According to Totilo, Destiny 2 remains the only game currently making money for Bungie, and this year’s The Final Shape expansion “sold less than Lightfall”, despite its positive critical reception. That’s a problem for a Bungie leadership still looking to prove it can turn things around for Sony, and perhaps not an easily solvable one. “The financials just don’t work,” one source told Totilo. “Destiny is an incredibly expensive game to make.”