The frenzy surrounding live‑service games has been dissected countless times over the last ten years, and the consensus is clear: the industry went overboard. The belief that every new title could be transformed into a perpetual, revenue‑generating service turned into a costly experiment, draining billions of dollars, countless development hours, and eroding player goodwill and brand equity. Major publishers and console makers scoured their back‑catalogues, convinced that somewhere among their legacy properties lay the next Fortnite‑type juggernaut.
The odds of striking gold were astronomically low, yet executives rationalised the gamble by assuming that a single blockbuster would offset a slew of failures. That assumption proved disastrous for several intertwined reasons.
First, the success rate of live‑service games was vastly over‑estimated, meaning the risk was far greater than companies admitted. Second, the market’s capacity to support multiple large‑scale live services at once was grossly inflated; there simply isn’t enough player spend to sustain a dozen simultaneous behemoths.
Finally, the operational complexity of running a live service was underestimated. The line between a profitable, well‑received service and one that alienates its community is razor‑thin, and many studios fell on the wrong side of that divide.
The fallout has been industry‑wide. Studios have been forced to lay off staff, cancel projects, and even shut down entirely—often the very teams with the least influence over the strategic decisions that led to the over‑investment.
While many publishers felt the tremors of this live‑service mania, Sony stands out as the most conspicuous example. The company’s aggressive pivot toward live services epitomises the broader industry missteps, from the bombastic promise to launch a dozen live‑service titles by March of this year, to the subsequent retreat marked by delayed releases, under‑whelming launches, and a cascade of cancellations.
Jason Schreier’s recent investigation into Guerrilla Games’ "Horizon Hunters Gathering" offers a micro‑cosm of the larger issue. The project, originally envisioned as a live‑service experience, performed poorly in internal testing and is now being re‑engineered into a traditional multiplayer game without ongoing service components. This isn’t an isolated case; "Dragon Age: The Veilguard" reportedly underwent a similar transformation from a live‑service model to a single‑player experience late in development.
What makes Guerrilla’s situation especially striking is that, according to Schreier, the studio has devoted virtually all of its post‑DLC resources to Hunters Gathering. Consequently, there is currently no major sequel to "Horizon: Forbidden West" in active development.
Whether or not Hunters Gathering ever reaches consumers, the opportunity cost to Sony is immense. Guerrilla, one of PlayStation’s most lauded first‑party studios, will likely not deliver a flagship exclusive for the PS5 era.
The sequel to Horizon, which debuted at the tail end of the PS4 lifecycle on both PS4 and PS5, may be delayed well into the PS6 generation. This represents a catastrophic misstep.
Horizon was a cornerstone of Sony’s PS4 success, contributing to a steady stream of must‑play exclusives that showcased PlayStation’s ability to both birth new franchises and rejuvenate older IPs. Yet studios renowned for crafting expansive single‑player experiences were redirected to develop live services based on those same IPs. The predictable failure of those services now means that, for at least half a decade, those studios have little to show for their efforts. Guerrilla is not alone.
Observers can spot similar gaps across Sony’s release calendar that likely stem from the same live‑service push. Naughty Dog, for instance, has not produced a new original title since 2020; its PS5 releases have been remasters while a planned "Last of Us" live‑service was cancelled. Other first‑party teams such as Sucker Punch and Santa Monica Studio appear to have escaped the worst of the curse, but their relative exemption is more the exception than the rule.
The timing could not be worse for Sony. The perception that the PS5 lacks compelling, exclusive, next‑generation experiences has become a meme, even if the console still offers a healthy library.
The absence of marquee studios and flagship franchises from the current lineup fuels consumer doubt just as Sony prepares to market what will likely be its most expensive console to date. In response, Sony is attempting damage control, shifting back toward the development philosophy that powered the PS4 era and trying to salvage value from the costly live‑service experiment and the multibillion‑dollar Bungie acquisition that was meant to underpin it. However, modern game development pipelines require years of lead time; no amount of capital can conjure a robust slate of releases overnight. Microsoft faced a similar dilemma when it entered the current generation, discovering that high‑quality pipelines must be seeded half a decade in advance.
Financial analysts often downplay strategic blunders by treating them as line‑item variances—ten million here, a hundred million there—absorbed into quarterly earnings. Opportunity cost, however, does not appear on balance sheets.
When top‑tier studios waste years on ill‑conceived side projects and miss an entire console generation, the impact reverberates far beyond any accountant’s column. It erodes brand equity, weakens the relationship with consumers, and leaves a lingering scar that persists long after the cancelled live‑service fades from memory. In the broader narrative of industry missteps, Sony’s ill‑judged pivot to live services may ultimately be remembered as the most costly error of all, not because of the dollars spent, but because of the lost creative capital, delayed exclusives, and the long‑term damage to the PlayStation brand.