Marathon Failed to Save Bungie - Inside Games Daily

Added: 2026-05-12

[00:00:00]4 years after acquiring Bungie for $3.6 billion, Sony has reported 765 million in impairment losses against the company, which is very, very bad news.

[00:00:12]Uh, welcome to Inside Games Daily, the only game news show brave enough to see where this might be headed.

[00:00:16]>> Yeah, and it's nowhere good for Bungie, that's for sure. I mean, they've already done a lot of layoffs, but uh, they got nothing else in the tank. That's what worries me. You can you can buy time as long as you can say just wait for the next thing, but Marathon was the next thing. and they've already done their Star Wars integration for Destiny. So, what's left?

[00:00:33]>> I I don't know. The bad news comes from Sony's fiscal year 2025 results uh published earlier today. In it, Sony realized a 120.1 billion yen or $765 million impairment loss against Bungie's assets.

[00:00:51]>> Yeah, they had actually done this before in a previous quarter, which is not good cuz it got way way bigger. Yeah, Sony previously reported a $31.5 billion yen or $24.2 million impairment loss against Bungie in Q2, but that was based on Destiny 2's underperformance.

[00:01:08]>> So, Lawrence, I was looking up an impairment loss and basically an impairment loss is uh you know, generally there's depreciation on everything. So, you assume that let's say Bungie's worth a million dollars and then the depreciation goes down. It's like, oh, it went down whatever 100,000.

[00:01:22]So, now it's worth $900,000. the impairment losses. They sort of, how do I put this? Um, they predicted the historical loss of $100,000, but it turns out an impairment loss is actually the real value of the company went way down. So, something they didn't even predict, which is even worse than I cuz I thought an impairment loss was like, oh, it's just a loss. It's like a fair market value loss, depreciation.

[00:01:48]>> Yeah. It just didn't work out.

[00:01:49]>> It is not. It turns out that they had someone else look at it and it turned and they they are noticing that Bungie went down even further than they thought.

[00:01:58]>> Oh my goodness, that's very scary. Yeah.

[00:02:01]From these results, it's I think it's pretty clear that Marathon underperformed expectations while Destiny failed to recover any of its money or even offset the underperformance of Marathon. Yeah. And the timing of this makes it pretty clear what this loss is marked against. Yeah, these results are marked against Bungie as a whole, the whole company. And to some degree, I guess to what you were saying, Bruce, it could be PlayStation realizing that they don't have the games of service golden goose that they thought they did, or that maybe Jim Ryan told them that it would be. Uh, but I think this is also a pretty clear referendum on the performance of Marathon, which launched in early March.

[00:02:34]This is the first quarter after Marathon's launch. So, and in terms of like always looking forward to the next thing, I was worried about this. If Bungie delayed any Fallout by saying just wait for Marathon, it's going to do so good now that it's out and it's not doing good, we may be seeing like the true cost of what Bungie oversold.

[00:02:53]>> M that's a really good point. Uh from the results, it's clear that Marathon underperformed expectations. While Destiny failed to recover or offset that underperformance, uh this loss is actually the biggest across all of Sony in their Q4. That's really bad. That is so bad when your company is the one that the the CFO is looking at and it's the biggest chunk taken out of the entire company's revenue. That's bad. That's bad. You don't want that.

[00:03:20]Like I think I said it before, but you don't want the IFS on trained on you like that.

[00:03:24]>> Yeah, that's right. Uh luckily it's not enough to sink their game and network division, which which brought in record income even though sales were essentially flat.

[00:03:32]>> Yes. Yeah. Yeah, the PlayStation Network continues to just be a money factory, not only from PlayStation Plus subscription fees, which are good, but also increased sales of non-fpart games on the PlayStation store. Uh, PlayStation expects a 30% increase in income in the next fiscal year for the simple reason that they won't be marking down huge losses from Bungie anymore.

[00:03:51]Yay.

[00:03:54]Gosh. Yeah. At this point, it's almost a third of the value of the company. O.

[00:03:59]Yeah. So, that leads us to the elephant in the room, of course. What does this mean for Bungie?

[00:04:04]>> H uh Sony sounds like they're not closing the studio outright, at least for the moment. Uh IGN reports some forward-looking statements about Marathon from Sony's investor Q&A.

[00:04:14]>> And why would they make those if they were just going to shut it down, right?

[00:04:17]Right. Right. Uh yeah, this is from Sony CFO Lynn Tao. She said directly that quote earnings from Bungie's title portfolio did not reach our expectations. So we downwardly revised our business plan and impaired the full amount of the fixed assets related to Bungie except for Goodwill. Okay. I wonder how much goodwill will give them.

[00:04:36]Maybe that'll bring the value up a couple million.

[00:04:40]Uh despite that, the plan is to quote improve the performance of the game. I would assume marathon. uh by working to retain highly engaged core users through the introduction of additional content, further improvements in the gameplay experience and expansion of the user base.

[00:04:54]>> Expansion of the user base. That's real important. Uh and I consider myself in the user base and even I would like them to expand to me a little more because uh I love Marathon but I can't man I have had enough of its [ __ ] Um, last time I played it was just a series of just getting stomped by super players. I didn't learn anything. I didn't get anything. I didn't really I didn't even have the chance to participate in any interesting fights. It's just the second I was I knew I was getting shot at, I was dead over and over again. And man, um, I you can't have players having experiences like that, even me. And I like to think I'm pretty permissive of getting my ass beat. Um, but even that is rough. So, they got to do something.

[00:05:38]I really, like I said, I really like the game, but um it needs a baby mode or something.

[00:05:43]>> Yeah, you've uh I think you've discovered extraction shooters more so now than ever because uh this is something that every extraction shooter goes through. I mean, I went through the same with Tarov and Arc Raiders and it was all, you know, they're they are generally the same usually and uh we've talked about this before on the show, but like Tarov had the uh advantage of building up this really small user base and then slowly expanding as the game expanded. So like their budget went up with their players. Bungie does not have that. Bungie was already, you know, they spent billions of dollars. Sony spent billions of dollars on Bungie. And so they had to deliver a hit. They did um with Marathon. And while I think Marathon is an amazing video game, I am not playing it for precisely the reason you just described, which is like, oh, it's so cool. I love this game. I would love to watch it from afar. I'm not going to play it at all. And I bought the game, so I I get it. And uh like you said, Lawrence, it would be great if they had like maybe a PvE mode or something, you know, like something like that. You go in and have a little fun.

[00:06:43]>> God, I'd love that. I'd love that so much. I just want to get my lore. I just want to get my little lore entries. Just leave me alone with my with my logs and my audio files, please. But no, no, the players are psychopaths. Uh unfortunately, um this is well, I guess it's not the total end of the cycle. there's there's some other steps that could happen and still may. And on that note, yeah, a word of caution, um even though executives are making forward-looking statements, they always say that until they shut everything down, and that could happen at any time. So, even though there are some eluding statements that that they're going to let Bungie continue doing their thing, I guess we have some theories about what that might look like, but uh just just don't take that too close to heart cuz it's always that's always what they're saying until they say the exact opposite. But uh yeah, there there was there were troubling signs when Bungie was acquired. I remember a lot of the press releases that Sony and Bungie put out talked up a lot of the projects they were going to do, these like these trans media projects. We're going to do TV, we're going to do movies, we're going to do everything, animation and stuff like that. And that already gave me a sinking feeling in the pit of my stomach.

[00:07:48]Whenever a company gets acquired and it thinks it's becoming a dream factory, finally we get to do everything we've ever wanted. And furthermore, we're going to be great at all that stuff just because we did this one thing really well. It's this it's this unfortunate mix of like doing one thing really well, getting acquired because you did that one thing well, and then thinking that that has empowered you to do all things well. And yeah, the the cycle pretty much went as expected. They hired like crazy. They made nothing for a year and a half, laid everyone off, tried to come back to their bread and butter, but found that it wasn't really there anymore because they had neglected it.

[00:08:22]So, they took their eye off the ball.

[00:08:24]People left people left Destiny. I'm not even sure if Destiny is a forever game.

[00:08:29]Uh, I think everything has its seasons.

[00:08:31]So, despite, you know, despite Bungie's best efforts, Destiny still may be in decline. Uh, regardless, but yeah, to to me though, Marathon, like I said, I really like it. But it is not the kind of game you expect from a studio that had just been acquired and put all that money and effort into one game. This is kind of like a side hustle game from a small group that put together a very constrained and responsibly scoped game to try out something new. Uh because there's not I like the maps. I keep saying that. It's a good game, but there's not much to it. Uh especially if you just get if you get your dick kicked in the second you log into the game. So, it's unfortunate and I I am perversely curious what sorts of expectations that Bungie set for PlayStation for Marathon because it should have been extremely conservative.

[00:09:25]Anybody that played Marathon for 15 minutes could have told you this is not a game for everybody and it's not a big seller and it's exactly the wrong kind of game that Bungie needs to make right now. But they did it and I to some degree I respect that. It's a very authentic game. It's very clear that they made the game they wanted to in the way they wanted to. So that's rad. But yeah, the business the business side of it is is questionable to me.

[00:09:46]>> Yeah, I think that uh I also think that Jim Ryan is responsible for a lot of this uh fa the failure of Bungie here.

[00:09:53]And and just by the way, I want to clarify both Lawrence and I don't want to see Bungie go away. I don't want to see people get laid off. I don't I would love to see them uh prosper and make Destiny 3 and Marathon 2. And I want to see all those games cuz like I said, I love Marathon even though I'm not out there playing it. I think it's such a cool game and it is one of the few times I could say that these artists at Bungie got to make the thing they wanted to make which is cool. But uh when Jim Ryan and Sony acquired Bungie a few years ago, clearly Jim Ryan was like, "We're going to make 10 live service games.

[00:10:23]Bungie's going to have a hand in each one of them and they're all going to succeed." And pretty much all of them failed. I want to say almost all of them failed. I don't know if they had a hand in Hell Divers, but like boy oh boy, uh they're it's been a massive failure on Jim Ryan and Sony's part. And I'm sure that they were handinand either for the success or failure of Bungie. And that's a real real problem for them. And uh I don't want to see them go away. Uh because I do think that they are the best in the business at live service games even though everybody hates Destiny all the time and they play thousands of hours of it. That's my favorite thing is that they played 5,000 hours of Destiny. They're like, "This is the worst video game I've ever played."

[00:11:04]So, no. Otherwise, you would have stopped. Uh, and I do think that they're really, really good at what they do. And I'm sure a lot of comments are going to say I'm wrong, even though they played 3,000 hours of Destiny.

[00:11:15]>> No, I I think you're dead on. And, and I don't know, my favorite Destiny player is the one that that understands it.

[00:11:20]Like, I hate it, but I love it. And we're all here, and for some reason, it's a lifestyle to complain about the thing we can't step away from. Yeah.

[00:11:27]Some people have accepted the the cognitive dissonance of playing Destiny.

[00:11:32]Yeah, Bruce, I think I think you're dead on about Jim Ryan. Um, if for no other reason than he followed the dance steps perfectly by leaving before any of this stuff really hit. That's that's the grand irony of of executives that have a vision is that they're the first ones to see if it's working or not. So when they when they crawl out of the bathroom window in the middle of the night and take a big suitcase of money with them, there's a reason and it's because they don't want to be around when this happens or have to answer difficult questions. Or maybe they were answering difficult questions and got tired of it and decided to leave. So yeah, it's unfortunate. I mean, the the good news is that Jim Ryan's misguided uh life service push, you know, if the consensus is that we can attribute it to him. Uh so if it truly was his push and his idea, uh PlayStation seems to have transitioned out of it without, you know, without too many uh huge hits to their business or their their income.

[00:12:25]The biggest one is probably right here.

[00:12:28]But uh I guess they're just going to go back hopefully to making uh making the games that worked before. You know, things like Wolverine, the big budget, uh prestige premium games.

[00:12:37]>> Yeah, Intergalactic is another example of that. That's that's coming up. I'm sure they're doubling down on Naughty Dog and being like, "Hey guys, just make another single player game." Last of Us 3. Let's do it. Um, Lawrence and I were speculating last night on what's going to happen to Bungie. This is another thing that I think we like to talk about cuz like Lawrence just talked about with the executives sneaking out in the middle of the night. We've seen this firsthand. We watched this happen firsthand at companies that we worked at. So, uh, what I what what I think the future of Bungie is at Sony is that I don't necessarily know that Sony will shut down Destiny. Um, they may just leave a skeleton crew there sort of let it to let it die over the next few years. I'm worried about Marathon. I don't want Marathon to get shut down. I really don't. I would hope I would love if they had a skeleton crew and then maybe they lay off a bunch of people at Bungie or whatever. I don't want to see that either, but it would be nice to see those two games survive for a few more years versus just shutting it down like they did Concord. Um, cuz we were talking about that too. We're like Firewalk was the developer of Concord, but we probably think that Sony shut down Concord. We don't know that they, but Firewalk was the one that did that.

[00:13:40]Um, so we're worried about Marathon for that. And then at that point, Sony just absorbs the rest of the employees from Bungie into Sony and then they slowly fade away. That's it's this is very sad.

[00:13:51]I don't want any of this to happen, but that's what looks like it might happen.

[00:13:54]>> Yeah, I agree. I mean, certainly the dream phase is over. Uh, the the reality is fully set in now. So, uh, yeah, it it makes sense that PlayStation would scale back Bungie's headcount to basically get a healthy profit margin out of Destiny and ideally out of Marathon and and with the way those games are established and especially the maturity of of Destiny as a business and the way that Bungie has run it, I'm sure that they are very knowledgeable about the costs it takes to operate that game and the revenues they can get out of it. So, yeah. Yeah.

[00:14:28]uh worst case scenario, PlayStation acquired Bungie and Bungie has a very healthy and somewhat stable revenue stream. It doesn't make sense to shutter the whole thing. Um when there's like a when there's a fat line of revenue coming in, it's it's somewhat similar, but not quite similar to rumors about like Microsoft just closing Xbox entirely. They have Call of Duty, they got World of Warcraft, they got Candy Crush, they have all of Activision's revenues coming in under that division.

[00:14:52]Um, so it doesn't make a lot of sense to just shut the door because, you know, in in a given four or 5 year period, there's a decline when money's still coming in and it's a functioning business unit. You know, they don't have to uh they don't have to oversee it or get in there and fix stuff, at least not anymore. So, yeah, I don't think I don't think they would close Bungie outright.

[00:15:09]But yeah, Bruce, I think I think your vision is the most accurate where uh maybe their their operating revenue gets squeezed and they have to do just smallcale layoffs over the like every 6 months, lay off another 20, 30 people until they get down to the headcount that PlayStation wants them at and then they stay there. Uh and maybe in 5 years, Bungie will be able to appeal to PlayStation again, ask for the sweet permission to make another original game. And we'll see if PlayStation says yes, cuz they've been burned a couple times at this point. Yeah, I'm I'm crossing my fingers for Marathon. I really hope that Marathon keeps going. I really do because I think it's a good game. Uh, thank you very much for watching Inside Games Daily. We appreciate you sticking around and listening to our speculation even after the news cuz we love to talk about it.

[00:15:52]Uh, like I said, Lawrence and I were just talking about it for fun on Discord last night. Um, so because we enjoy it.

[00:15:57]Uh, so subscribe to the channel if you uh enjoy our our news and speculation.

[00:16:01]And we also have a Patreon if you want to support the Patreon. That actually helps us make more content. uh helps everybody that is uh employed with this channel. So, if you want to do that, Lawrence even posts all of our content for free over there on the Patreon in addition to some memes. And uh I don't know what Lawrence has posted in the last couple of days, but they can be edgy.

[00:16:21]>> They can. Yeah, I've been stocking up memes since the the gosh the early 2000s. And let me tell you, meme culture was a little edgier back then. So, sometimes you get a vintage one.

[00:16:30]Although, I have to admit, meme culture around Marathon's pretty good, too. So hopefully I can dig a newer one out tonight. But yeah, thank you very much for watching.