The opportunity cost of Sony's live service pivot is enormous | Opinion

What the report says

The folly of the live service mania that consumed the games business for much of the past decade is pretty well documented by this point. The idea that every game should be a live service game – the absolute madness of thinking that every game could be a live service game – consumed countless millions of dollars and incalculable hours of labour, not to mention burning vast amounts of consumer goodwill and IP value on a bonfire of executive failure.Many of the world's biggest publishers and platform holders spent years scouring their franchises and back catalogues, absolutely convinced that somewhere in there lay the IP that would be the next Fortnite-level live service moneyspinner.

Everyone could see the risk profile, with the chances of success being almost impossibly slim – but this was reasoned away by the idea that just one huge success would pay for many failures along the way.This idea failed for several interconnected reasons. The actual success rate of live service games was overestimated, meaning the risk profile was understated. The carrying capacity of the market – its ability to sustain multiple big live service titles simultaneously – was also dramatically overestimated. Perhaps most of all, there was a widespread underestimation of just how hard it is to operate a successful live service game, and just how knife-edge narrow the gap is between making money and making all your players hate you.This obsession and these failures were widespread across the industry – few companies have emerged without scars to show, and some are still in the throes of financial crises largely precipitated by overinvestment in these expensive, risky ventures.

The direct impacts have been easy to see, and some of the most severe consequences – redundancies, project cancellations, studio closures – have fallen on those who had the least amount of decision-making power in the mistakes that led to this juncture.Many companies may have been touched by the live service madness, but there's one obvious poster child for the era – when the histories of this chapter of the games industry are written, it's Sony that will get a page all to itself. The company's hard pivot into live service is emblematic of so much that went wrong across the industry, from the bombastic initial pledge to launch a dozen live service titles by March of this year, to the drawn-out humiliation of a slow strategic reversal punctuated by disastrous launches and project cancellations.Jason Schreier's reporting this week about the status of Guerrilla Games' Horizon Hunters Gathering, one of the surviving projects from that initial cultish outburst of live service devotion, presents a microcosm that encapsulates so many aspects of this years-long mistake.

Key details

Moreover, it presents a rare glimpse of the other cost of the live service miscalculation – not the direct costs in money and resources, but the arguably even greater opportunity costs that companies will be paying for years to come.The short version: it appears that Hunters Gathering has landed so poorly with test audiences that the game is being reworked as a conventional multiplayer title without live service elements. That's not a unique situation; Dragon Age: The Veilguard, for example, was reportedly a live service title until reasonably late in development, at which point it was reworked into a single-player game."Guerrilla Games, one of the most successful and celebrated of PlayStation's first-party studios, is not going to release a single major exclusive title for the PS5"What is extraordinary in this, however, is that Schreier's report suggests that Guerrilla has been solely focused on Hunters Gathering since wrapping up the DLC for Horizon: Forbidden West – meaning that there is not presently a mainline sequel to that franchise in full production at the studio.

Whether or not Hunters Gathering ever sees the light of day, its actual cost to Sony goes far beyond the money spent on it. The actual cost is that Guerrilla Games, one of the most successful and celebrated of PlayStation's first-party studios, is not going to release a single major exclusive title for the PS5. Horizon: Forbidden West launched at the end of the PS4's life cycle, appearing on both PS4 and PS5; its follow-up will now probably not appear until well into the lifespan of the PS6.This is a catastrophic fumble. Horizon was an incredible success for Sony, part of a roster of massive first-party titles that gave the PS4 a constant flow of must-play games and showed that PlayStation's studios were equally adept at creating major new franchises and continuing or reviving older IP.

Yet at some point along the line the studios that had demonstrated world-class expertise in making huge single-player titles found themselves commanded from on high to make live service games based on their IP.