Sony has reported an eye-watering $765 million impairment loss on Bungie, raising the question: is this the platform holder’s worst ever acquisition?
This includes a $204 million impairment loss late last year, meaning the value of the developer has plummeted since its $3.6 billion purchase in 2022.
It’s important to understand exactly what’s happening here.
These aren’t necessarily cash losses for the company, but a devaluing asset. The Japanese giant is effectively “writing down” the value of the purchase because it’s fallen short of expectations and its performance isn’t expected to improve in the short-term.
The latest impairment loss is particularly pertinent because it comes after the release of Marathon, which appears to have performed below expectations.
While the platform holder hasn’t announced any specific sales data, we know from sources like SteamDB that the game hasn’t exactly set the world alight. Meanwhile, it was completely missing from April’s PS Store sales charts, following its release in March.
Did Sony Overpay for Bungie?
These impairment losses appear to signal one very simple fact: Sony dramatically overpaid for Bungie.
Wedbush Securities’ Michael Pachter, a divisive but well-known industry observer, said as much when the purchase was announced.
He described the acquisition as “desperation”, and a response to Microsoft’s unprecedented near-$70 billion purchase of Activision Blizzard, which was taking place roughly around the same time.
He said:
“Just to compare and contrast, EA bought Respawn about three or four years ago for $700 million with 400 developers. And those guys generate $700 million a year in revenue. Bungie does about $200 million in revenue. So I think Sony vastly overpaid.”
Part of Bungie’s value for Sony was not just its games, but also its live service expertise.
However, the dev has struggled to cling on to players, as Destiny 2 has shed many of its daily active users since concluding its story with The Final Shape in 2024.
Meanwhile, Marathon is now struggling to surpass 15k concurrents on Steam just a month after launch. While we don’t have console specific numbers, we know the game likely sold best on PC and is attracting the most players there.
Live Service Woes
Furthermore, even with Bungie’s apparent expertise under its umbrella, Sony’s live service strategy has blown up in its face.
Concord was shut down within weeks of release after it failed to retain anywhere near enough players to be viable. Firewalk, its developer – another candidate for worst PlayStation acquisition ever – was unceremoniously closed down after it failed to settle on a rescue plan.
Multiple projects have been shuttered as a consequence, including a God of War live service game from remake dev Bluepoint, which also concluded in the dev being shuttered.
And remaining projects like Fairgames and Horizon Hunter’s Gathering face an uphill battle against negative player perception. The former has been roasted in various closed beta tests, while the latter has constantly attracted criticism for its artstyle and deviation away from the mainline games.
In fact, the only live service game PlayStation fans genuinely showed excitement for, The Last of Us Factions, was apparently axed following feedback from Bungie.
While the Washington studio simply advised Naughty Dog it would require a lot of resources to maintain, many people blame the studio for its cancellation – especially when it was apparently close to completion and by all accounts an outstanding experience.
It’s Going to Take Years to Turn Things Around
The big problem for Bungie right now is that it’s hard to see where the next win will come from.
Those who’ve played Marathon do genuinely enjoy it, but its hardcore extraction shooter format means it’s always going to be difficult for the game to reach a large audience. Even though it may be able to sustain itself just fine, it’s unlikely to ever be a big winner.
Meanwhile, Destiny 2 is on a downward trajectory following The Final Shape, and not even a Star Wars-themed expansion could turn its fortunes around.
The studio is supposedly in the “early stages” of making Destiny 3, but considering modern dev cycles, it means we may not see it for another five or six years – so, likely somewhere in the early 2030s at this point.
In response to its flagging management, Sony has yanked incubated studio Team LFG out of the Bungie umbrella, and while its project Gummy Bears should still release as a first-party game, it means that team’s now operating independently of Bungie.
Is Bungie Sony’s Worst Acquisition?
Given the amount of money spent, the company’s ambitions for it, and the impairment losses recorded so far, it’s hard to argue against Bungie being Sony’s worst acquisition by far.
Other candidates like Firewalk are up there, and Haven may make the list depending on what happens with Fairgames. But the overall spend on these studios is likely nothing compared to the billions invested into Bungie.
Acquisitions like Bluepoint ultimately haven’t panned out either, but that feels like the right kind of purchase in spirit, the platform holder just completely mismanaged what it had.
It’s going to be interesting to see what happens with Bungie moving forwards, because while we don’t necessarily think the studio’s in danger, it’s clear big changes are going to need to be made.
With an estimated 850 employees, in one of the most expensive areas of the United States, it’s difficult to see how Sony is going to justify the studio’s expense in its current state. And sadly that likely means impending job losses and redundancies.
