Report: Bungie Laid Off 8% of Staff as Revenue Missed Projections by 45% - News
by William D'Angelo , posted on 01 November 2023 / 11,179 Views
First-party PlayStation studio, Bungie, was confirmed to have been hit with layoffs on Monday as many employees confirmed to have been let go via social media. This included veteran composer Michael Salvatori, who was a co-composer on the original Halo titles at Bungie.
Bloomberg is now reporting eight percent of Bungie or about 100 employees were laid off due to a drop off in the popularity of Destiny 2.
Executives at the developer at a meeting held two weeks ago told employees revenue was 45 percent below projections for the year, according to sources who attended the meeting.
Bungie CEO Pete Parsons blamed the drop off in weak player retention for Destiny 2. The game has faced poor reception since the release of the latest expansion, Lightfall.
The next expansion for Destiny 2, The Final Shape, was reportedly delayed from February to June 2024. The next game from Bungie, Marathon, has also reportedly been delayed with the release window pushed back to 2025.
Parsons told employees at the meeting two weeks ago the company would be cutting costs by implementing salary and hiring freezes, and reducing travel. This lead to this week people getting laid off.
Those laid off will get at least three months of severance and three months of Bungie-paid COBRA health insurance. Although, expense reimbursements and other benefits ended on Monday. They will receive prorated bonuses, however, those who were on a vesting schedule following Sony's acquisition of Bungie will lose any shares that weren't vested.
Several other first-party PlayStation studios have also seen layoffs. This includes Naughty Dog, Media Molecule, and PlayStation Visual Arts Service Group.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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I will fully accept being roasted for this months/years from now if I turn out to be wrong, but it seems clear to me right now that Sony purchasing Bungie was a panic move that they couldn’t actually afford and now they are having to deal with the consequences.
A rare own goal from SIE. They absolutely did not need to buy Bungie, and they should have never strayed from their formula of single player games output as the main selling point of their console
Single player games are not sustainable especially if they come out every 3 to 5 years. Why do you think most companies have some sort of online model now? They need to find a way to make income during the wait periods of their next game.
Example: GTA Online is keeping Rockstar afloat while we wait 10 years for GTA6.
Bullshit just look at some of nintendos smaller series like Fire emblem, its lucky to sell like a million copies a game, yet it gets a new game every 3 years or so. Just don't make hyper realistic cinematic movie games.
Fire Emblems budget isnt even close to this conversation. Cheap to make, doesn't need much marketing and easy return.
So? It's still a single player gamer
Big budget 1 and done games with zero MP or online interaction dont rake in the money long term. People buy them, finish them, return or wait another 3 to 5 years for the sequel. Meanwhile the company cooks up the sequel, they have no source of income until their next project is released. So parent companies like Sony and Microsoft have to pay massive upkeep
To be fair, I am not placing the blame on Sony for this one... But rather Bungie itself.
Bungie has failed to find "Halo levels of success" by going all-in with Destiny... And has been rife with "drama" since it's inception while under the umbrella of Activision with incomplete single player/story content and lack of content in general... And as such, failed to meet sales/revenue expectations with Activision.
And that is despite Activision throwing Vicarious Visions and High Moon to assist.
They tried to right that ship with Destiny 2.
However, like Destiny 1, it just didn't have the same vigor that they expected... Some review outlets even labelled it as Destiny 1.5. Which for some, isn't a bad thing... But doesn't build much faith in the sequel.
They then made Destiny 2 free to play to build that playerbase in order to sell DLC and paid loot boxes (Paid loot boxes have since depreciated and is now a free award for various aspects.)
And then fast forward to today... The population has declined, which has impacted revenue and profits. (Which dropped by 45%)
So whilst "Games as a service" tend to have longer and more consistent revenue streams... They do require constant investment, development and resources to maintain... Essentially reducing the resources available for the next project. - Hence the Marathon delay.
And if your title looses it's player base (People simply move on to the next big thing) - You still have that content development pipeline that still needs development and investment... Which may not be financially viable.
Either way, cutting some of the fat from a company may not be a bad thing anyway, it should allow Bungie to refocus it's efforts and bring in new talent.
Destiny has been a massive success. So, I think you are way off base with many of your premises here. It certainly has fallen off here lately, but it has been one of the most successful games as a service titles ever.
Also, Sony and Bungie are one and the same. If you're putting the blame on Bungie, you are, by definition, putting the blame on Sony.
I am not saying Destiny was a complete flop.
But Destiny according to those who have a financial interest in the title acknowledged that Destiny upon release missed sales projections.
And I am NOT putting the blame on Sony.
Since Sony acquired Bungie last year, Bungie hasn't released a single game since being acquired... Ergo the issues already existed Pre-purchase.
In-fact the ONLY thing Bungie has released since their buyout last year (One month after purchase) is the DLC "Lightfall" for Destiny 2... Which received mixed to negative reviews on several platforms.
https://www.youtube.com/watch?v=3utyCyf8Acw
https://www.ign.com/articles/destiny-2-lightfall-launch-reception-news
So the issue is Bungie, not Sony.
They fired so many significant vets in this round of layoffs that I think they will be a hollow shell of their former selves now. The layoff choices they made were the worst way to deal with the fallout from their latest Destiny 2 expansion falling short of expectations, if you've got to layoff people you're better off firing semi-rectent hires, devs with less than 5 years at Bungie, not the the few remaining veterans you had from the Halo days. The quality of their expansions and games will suffer even more with the veterans who made Bungie "Bungie" gone now.
Many of those vets are probably as expensive as several new hires.
Bungie will turn out to be very expensive for Sony. And this will only be the beginning of the Gaas failure road that Sony is so deadset on taking.
Nice investment, Sony!
people are blaming sony right now, but reports seem to suggest it was bungie's management that made the call. dont get me wrong like fuck sony for many things but theres nothing saying bungies management cant be shit too
I'd say it's partly Sony's fault in that they likely told the Bungie leadership like Pete Parsons (CEO) and Jason Jones (CCO) that they needed to cut costs after the underperformance of their latest expansion and dwindling player numbers and revenue. But it will have been the Bungie leadership who made the actual decisions on which devs to layoff, they could have laid off recent hires, but instead chose to layoff a large number of veterans who have been with the company since the Halo days or even before Halo.
So both Sony and the Bungie leadership share some blame here.
I'd believe it if that turned out to be the case, but it does appear to be Bungie management's call. If it turns out that's incorrect and it came from Sony then sure my bad, but I don't believe that Bungie execs are above layoffs.
If anything, Bungie's CEO is trying to look as good as possible to Sony when it comes to cost efficiency. The fact not that even team managers knew who on their teams were being let go tells you it was a CFO or top Accountant that looked at a spreadsheet and thought "where can we save the most money?" They didn't speak to managers and laid off the weakest links based on individual merits.
Sony overpaid for Bungie and Bungie cannot make much money for them. That is kind of funny.
And this right here is probably why we saw the 34% price raise on playstation + to offset some of the losses from purchasing Bungie.
