What's In Your Wallet, Sony?

 

We need to have an incredibly serious, direct, and timely conversation about the advent of the swathe of self appointed “professional business advisors” that have cropped up over the last few years.

Y’all might not know this, I am a contract small business developer, my job is to either: analyze business plans at inception and strategize launch, or scale an already established business.

I mention this with the explicit purpose of saying that I am, at the very least, vastly more informed on Biz Ops than the majority of the aforementioned “business advisors”. The fact of the matter is that, more often than not, you are probably engaging with an idiot when it comes to these “steam chart” conversations. I don’t mean to be blunt or crude, but there is no better way to describe the phenomenon of the completely uneducated parsing noncontextualized financial (or performance) data and presenting it as complete fact.

This is less about Bungie specifically and more about the industry as a whole, though I think it would be unwise to center the conversation around anything other than SIE and their near $4 Billion investment into Bungie, very few investments have ever been this colossal or risky, and even fewer still have ever been scrutinized by this many incapable morons.

In 2022 Sony Interactive Entertainment announced their acquisition of Bungie to the tune of $3.7 Billion, part of this acquisition was for the obvious purpose of controlling one of the biggest live services in history as SIE pushed into the live service market (with a fair amount of futility). However, something I see discussed much less substantially is the reason Sony made the acquisition. Between (former) CFO Hiroki Toktoki and Playstation CEO Jim Ryan, the intent of buying Bungie out was never really about Destiny, my professional opinion is that they probably couldn’t give less of a fuck about the performance of a 10-odd year old live service. Bungie had known management issues, many of which were made clear to SIE during discovery (which, yes, does exist, and is a critical part of any merger or acquisition). Sony bought Bungie for a much more important reason than making money off of Eververse transactions; live-service development expertise, cross-platform experience, and publishing infrastructure, which led to their influence over future cancellations of risky titles.

A lot of people love to throw around the idea that Sony has to “recoup” its investment, they love the “fallacy” part of a “sunk cost fallacy" but conveniently ignore the “sunk cost”. Sometimes you just have to pay for something expensive. Do you think that buying a new printer means the onus of generating revenue is on the printer?

After Sony’s acquisition of Bungie, their suits went on to internally review all 12+ of Sony’s in-development live services. Since then, any number of them have been cancelled, including The Last of Us live service, Bend Studio’s live service, and the God of War live service, which we now know led to the (utterly disgusting) closure of BluePoint studios. Bungie did not advise Playstation to cancel all of them, but it did have a hand in a few, and we know for sure they directly killed the TLOU live service, which could’ve cost upwards of $300 Million, knowing Naughty Dog’s penchant for hardware pushing technology. So there’s $300 Million Sony has earned back from the Bungie acquisition, because a penny saved is a penny earned, even when we’re talking about 10 figure sums. Factor in the fact that Bungie was probably involved in the Insomniac Spider-Verse game cancellation, and the aforementioned GoW and Bend Studio titles, that’s probably a lot of money. It’s certainly more money saved than Xbox has lost on the ABK and Bethesda deals so far, but no one quite talks about Microsoft having to recoup $80 Billion in 3 years now do they? Of course, the natural counter argument is “hey dumbass, Microsoft has money”; so does Sony.

(Financials sidebar: At the time of the acquisitions, Microsoft was worth about $2.22 trillion, with nearly $80 billion spent on Bethesda and ABK combined, roughly 3.6% of its market cap. Sony, by comparison, had a market cap around $155 billion when it acquired Bungie for $3.7 billion, about 2.8% of its market cap. In raw proportional terms, Sony spent less on Bungie than Microsoft did on ABK. That said, market cap itself tells us very little about operating costs or internal budgets, much of which corporations never publicly disclose. A more useful metric would be revenue spread across divisions, which, based on Sony’s recent earnings calls, remains extremely healthy.)

There will obviously be people who hoot and holler about how Microsoft has other arms that can and probably will mitigate the losses attached to ABK, but Sony does as well, least of which is their growing monopoly over anime in the western hemisphere and control of Spider-Man's theatrical license. (I sell my car to pay for an engagement ring, happy wife, happy life, I might have to take the train to work now, that’s not your business).

So, now that we’re all in agreement that the vast majority of people who talk about game performance actually have no fucking clue what they’re talking about when it comes to a business’ financial portfolio and only parrot what columnists can only dream of properly understanding the larger implications of, we need to move onto other titles.

I think Concord and Highguard are interesting examples; both titles failed, yes. However, they failed for two totally different reasons. 

Concord did not fail because it was a bad game, it failed because of two major issues:

1) Concord did not have a particularly provocative art style, it was largely bland and felt very “corporate safe”.

2, and this is the big one) Concord released as a $40 hero shooter when basically every other game in that genre was free to play, and ahead of the console releases of Marvel Rivals and Valorant.

2a) “All of the cosmetics and shit that’s normally paid in F2P was included in the game) that doesn’t matter, it was a barrier to entry for a game people already had free (and better) versions of.

This timing was psychotic, I knew it would be problematic well before release, but I believe that the studio was far too deep into development to not try and release it. No professional analyst could’ve predicted the magnitude of the outcome, it was truly once in a lifetime and nothing like that will happen again. It did not happen again with Highguard.

Highguard failed because it was a confused game, Wildlight clearly had no idea what they needed the game to be, but there were a few more issues:

1) Despite being free to play, the game had largely no precedent, most people didn’t actually know what it was until week 2, and considering Wildlight had to add 5v5 based on community feedback; they probably didn’t either.

2) Bad art style, just boring and dated. Cohesive and not the worst, but certainly nothing enamouring.

3) Apparently, its reveal placement at The Game Awards, which was enough to sour expectations on it (I still think this is dumb, but to each their own).

3a) The shadow drop on a genre people were not comfortable with was a gamble that did not need to be made. There was no reason not to have more comms or marketing material.

Both of these titles failed, but for completely different reasons.

Apex, conversely, was a much easier shadow drop, “first person, competitive fortnite, eh, you’ll figure out the rest”.

Similarly, Marathon is “first person, competitive ARC, eh, you’ll figure out the rest”.

Do you think that out of the genuine hive mind of pseudo intellectuals screaming about how Marathon would fail, that not a single person at SIE would’ve told Playstation that maybe Marathon wouldn’t open to 1 Million concurrent players? Do you think that there’s no reason a random account doesn't work for SIE instead of shitting around on twitter all day? Are they actually so conceited that they won’t admit that they have zero professional experience in this field, or at the very least with Sony’s financials?

Stop pocket watching billion dollar corporations if you can’t even pocket watch your own 6 figure one. By potentially having a hand in cancelling multiple live services, Bungie has already earned back quite a sum of money for SIE, as time goes on, SIE will reap the benefits of Marathon, Destiny, their merch, marketing, and MTX revenue. They will also reap the benefits of the inevitable Destiny 3. Sony could also demand remakes for the Original Marathon, or put those games on PS Plus, or order Destiny Classic (I imagine much to the amusement of one particular Aztecross). Sony makes money off of the fucking worm plushies, they make money off of the spotify streams on the OST, they make money off of the marketing engagement revenue. Sony prides itself on public image and financial success, and with Marathon sitting at 90% paid user score on steam they’re unlikely to euthanize the game any time in the immediate future. Moreover, 70-80k on one platform for a niche title is healthy, I don’t really know where the notion that it isn’t came from; this point is psychotic and arrogant. Look at Tarkov, look at Apex’s first two months on steam (and people already knew Apex was good). We haven’t even begun to talk about the sheer number of Playstation die-hards that would buy a game simply because it has the PS Studios logo on it. With 92 Million-odd PS5s out there, it is reasonable to assume quite a large chunk of that playerbase has their hands on the title.

All of this is to say; my professional opinion is that no one, including myself, has all of the data and therefore does not know what they’re talking about. We don’t know what sony makes off of each unit sold, we don’t know how many deluxe editions moved, we don’t know how much SILK has been spent, we don’t know how much money was recouped by Bungie-influenced cancellations, we don’t know how much money Sony makes on merchandise, we don’t know what they make on Destiny. We don’t know what Sony is willing to lose on Marathon development for the explicit purpose of keeping the legendary Bungie studios (their talent and source code included) in their wheelhouse. We don’t know if Sony made so much fucking money on Spider-Man PS$ (50 Million as of 2024) that they’re willing to eat the loss on Bungie entirely. If we assume that Spider-Man PS4 averaged $30 per unit based on sales and such, by 2024 the title made $1.5 Billion). Sony is also set to have, in all but ink, exclusive claim over GTA 6 for at least a year until the PC Port, and we know based on Jason Schreier that Sony is already treating it as such internally.

I mentioned previously that people are suspiciously unconcerned with Microsoft making its own money back, COD is possibly doing worse than it ever has but the K in ABK was the real powerhouse; King makes nearly $3 Billion per year. Off of the back of a fucking match 3 game.

I cannot stress this enough. No random Twitter account, or article writer (both of which include me), or Youtuber, or streamer, or even senior business professional that doesn’t work at SIE, knows what the fuck is going on with SIE. You aren’t credit karma, you aren’t the IRS, you are certainly not Lin Tao or Hiroki Totoki., you do not know what’s in SIE’s wallet. I mean really, for the love of god, you’ve never blown 3% of your net worth? If you haven’t, you certainly have no room to talk, because you haven’t the slightest idea of what actually comprises business risk and/or liability.

I don’t know if Marathon or Bungie will survive or thrive, but the important thing is that you do not either; and you must come to that realization. You don’t sound intelligent, you sound righteously indignant.

Some more numbers.

From the moment of acquisition to today, the Sony Corporation has grown about 30%. However, from the moment of acquisition to their November 2025 peak, their market cap had increased by 80%, and that is including the early 2020s tech sector financial collapse. Their stock is also set to explode later this year when PS5 is the only machine in the world that can run Wolverine and GTA 6 during the holidays.

SIE does not care about a bomb the way people seem to think they do; they care about a bomb that’s also a complete critical failure, because it jeopardizes the integrity of their quality guarantee. Sony is far more tolerant of commercial underperformance if the game is critically successful and strengthens the PlayStation brand. Marathon has already escaped immediate execution in this way, its user scores are fantastic on outlets where actually owning the game is a prerequisite and cannot be subject to review bombing. It also looks set to have decent critical reviews as more and more outlets publish positive (and informed) opinions prior to the release of Marathon’s endgame map release, Cryo Archive, later this month, where in these outlets will be able to publish holistic reviews of a fully realized title.

A perspective anecdote.

A while ago I convinced one of my clients to go to a tradeshow with physical business cards. Many, especially in the tech sector believe this to be a dying practice as business cards have switched over to LinkedIn QR codes or NFC chips with business contact information baked in. The business cards were, therefore, a business expenditure that was arguably, unnecessary. In the following months, and to this day, I have lost track of how many times clients have started a call with “…I found your business card and…”. So did I waste my client’s money? Or did I add to the client’s visibility and grow their brand equity?

I’ll leave you the situation to draw a conclusion from, but I will tell you: my client’s profit margin continues to grow quarter after quarter, even if I told him to spend a (at the time) good chunk of change on premium cardstock.

Please stop jumping the gun on financial reporting based on “15 tweets you saw one time yesterday or something”. Wait for the fiscal reports, and even then, do not just take a journalist’s opinion on it and run with it. CDPR got sued by its investors, Sony, and Microsoft. No Man’s Sky peaked in player count last year. We are in an age where anything and everything can happen with any given title; you do not get to peddle assumptions about one game based on another. Concord’s performance tells us nothing about Marathon, and told us nothing about Highguard’s. Helldivers’ success tells us nothing about how another Killzone would do, etc. I understand on a baseline why people label inbound games they don’t like as Concord [X], on the one hand it’s a shorthand for affirming a belief that a game will fail based on contextless information, but on the other hand, the reality is that anyone making that claim is disinterested in the machinations of what goes on at major corporations, and is more interested in sounding loud and stupid than actually informing themselves.