In a Q&A session with analysts following Sony’s most recent financial report, PlayStation chairman Hiroki Totoki praised the creativity of Destiny 2 studio Bungie, but also said he wants to see more “accountability” for development budgets and schedules from the studio’s leadership.
Sony announced the acquisition of Bungie in January 2022, a blockbuster deal seen in some ways as a counterpunch to Microsoft’s takeover of Activision Blizzard, and an opportunity to add more live service game knowhow to the roster of PlayStation studios. It said at the time that Bungie would operate as “an independent subsidiary,” with the freedom to remain multiplatform and “self-publish and reach players wherever they choose to play.” Bungie, in turn, said Sony “unconditionally supports us in all we are,” as it “begins our journey to become a global multi-media entertainment company.” Business as usual, in other words.
But just two years later, that relationship is showing signs of potential strain. A December 2023 report said Destiny 2 player numbers had declined dramatically, while revenues were said to be running 45% below projections. Morale at the studio was also said to be in bad shape following layoffs in October. Bungie was also reportedly facing the possibility of a full takeover by Sony, ending its functional independence.
Totoki’s comments aren’t likely to quell those concerns. He began by addressing the situation at Sony Interactive Entertainment in general, saying employees have a “solid understanding” of their individual roles and responsibilities, but “don’t necessarily understand how their respective efforts tie into overall growth, sustainable profit generation, and higher margins.”
“By providing everyone involved with highly transparent description of the company and industry conditions, as well as of analyst views, I would like to encourage them to come to their own realizations,” Totoki said. “This will get everyone in the business onto the same page. Then, I would like them to consider what we need to do to work toward our major objectives.”
Then he moved on to Bungie specifically.
“I visited the Bungie studios and had meetings with [the] management, and I saw that employees working at the studios were highly motivated, showing great creativity as well as an impressive knowledge of live services,” he said. “However, I also felt that there was room for improvement from a business perspective with regard to areas such as the use of business expenses and assuming accountability for development timelines. I hope to continue the dialogue and come up with some good solutions.”
I’m not an investment analyst, but I know a veiled threat when I see one. My dad used to call it “explaining the facts of life,” while my mom preferred the phrase “you clean it up, or I will.” Either way, just like Totoki encouraging studio leaders “to come to their own realizations,” it was made very clear that although the final decision in a particular situation was mine to make, the consequences for making the wrong decision would be, well, not good for me.
Totoki, who stepped in as chairman of Sony Interactive Entertainment in October 2023 and will assume the role of interim CEO in April 2024 following the retirement of longtime president and CEO Jim Ryan, may have different ideas about how Bungie should be run than his predecessor. But irrespective of the shifts that inevitably follow a changing of the guard, his impatience is understandable.
Bungie blew a lot of gamer goodwill with its mishandling of layoffs, and then just a month later delayed the big Destiny 2 expansion The Final Shape from February to June 2024, pushing into Sony’s next financial year. There may be a lot riding on it: According to the December report on Bungie, employees expect that even more layoffs will occur if The Final Shape doesn’t do well. Meanwhile, against that backdrop the remaining players are enduring a massively-extended season with content thin on the ground, at the same time as Helldivers 2 offers an alternate path to shooting aliens in space with your buddies. Still, at least Mr Totoki can console himself with the fact that that’s also a Sony game.
