Asset impairment in accounting occurs when an asset's market value falls below its book value, requiring a write-down that reduces the asset's value on the balance sheet and creates an expense against profit. In the context of game development, this means that when a studio's financial performance fails to meet expectations, the company must acknowledge that its investments are worth less than originally recorded, which can significantly impact the studio's financial health and future development capabilities.
Deep Dive
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Deep Dive
What Sony’s Bungie Update Really Means for Destiny 2’s Next ChapterAdded:
Welcome back, Guardians. My name is Sam Lab. It's been some time, but I thought now would be a good time to touch base, see how you are all doing, check in, maybe chat a little bit about the Sony-Bungie things that have been going on, and also catch up on all things Destiny and Marathon.
This is going to be interesting. Okay, so IGN recently put out an article, which is this article, which is on my screen right now. We're going to be discussing this and talking about Sony's [music] impairment loss over Bungie.
It sounds alarming, but there is more to this than meets the eye. So, I just wanted to preface this.
So, let's take a deep breath, and then we will get into this.
Um we have quite a few things to discuss, but I want to I wanted to make this video as helpful as possible and informative [snorts] as it can be and put out some good vibes about everything that's happening with Destiny and Marathon and Bungie on a whole and and how that works in terms of [music] connecting them to Sony. So, but first I thought it would be good to do a quick lore recap. So, for those of you who maybe stopped playing Destiny 2 after Edge of Fate, this might be helpful for you to get a general sense of where we are in terms of the Destiny lore timeline. And this is relevant because I think it's important for us to note these things as Bungie continues to move forward with Destiny and what that looks like and in what capacity and what we can expect.
So, I thought that this would be a great video and an opportunity to do that.
So, in July 2025, we obviously had the Edge of Fate was released and [music] with that we got the story focusing on the Nine calling Ikora Rey to Kepler, but more specifically in a distress call sent by Lodai, which was received by Astraea in the Vesper host dungeon, which came out years ahead of the Edge of Fate, [music] which is pretty cool. Love how that was connected and we'd even learn learned the name Lodai or the word Lodai and had no idea what that meant and the Destiny community went pretty insane for a quite a long time. So, but this is connected for lore reasons. It's I don't think that we have enough time in this video to really explain that. I don't have enough time to explain why I don't have enough time to explain. But, if you're interested in finding out why the Nine are on Kepler uh in the Jovian system, then spoiler alert, if you didn't know already, this would be your chance to tune out. I'll give you a second.
Okay, you're still with me? Great. A member of the Nine's death, more specifically three of uh Earth, who was killed and we went to Kepler to find out what happened and she left us a message and we needed the help of the Drifter and the whole to reanimate her for her to deliver us this message before she then passed away again. And her message was this, to prevent extinction, we must bind the Nine. I'm probably paraphrasing here a little bit cuz I didn't get the direct quote, but binding the nine is an essential element to preventing extinction in the universe. That Those are where the That's how high the stakes are if you if you're if you're trying to catch up. Now, this time of year in July 2025, when Edge of Fate released, is also when we got the portal.
Um Yeah, [music] no comment. We'll we'll maybe come back to that because I have thoughts >> [laughter] >> about the portal. I'm not sure if if this video is the best place to discuss that. I have another video coming later on that I think will be helpful towards that.
But, in December 2025, we had Renegades expansion, which was the next big expansion after Edge of Fate. This expansion continues directly from where Edge of Fate ended.
And in this story, we catch up with the Drifter, Eris Morn, Arnn Mahal, who is a Praxic Order Warlock tasked with shadowing the Drifter, who believes the nine are behind the Baron Imperium, who are I'm going to say are an offshoot Cabal legionary, breakaway miniature frac faction or now major faction from Empress Caiatl's troops, whose power who rose to power unnaturally fast with the help of a member of the nine, more specifically six.
And six represents Saturn, and six has been real grumpy for a long time because he is or she or they are unhappy with how it's its fellow members are handling things amongst the nine. So, they take control by leading a member of the last city who is named Dredgen Bale to become a dark guardian and wield darkness. So, that's like a quick snapshot of where we are. Obviously, Renegades came with a whole lot of things. It came with new bounty systems that and the Lullas Frontier and kind of and factions and gave us a little bit of a taste of I think like hearkening back to like the original faction wars, but I'm going to say like the the OG faction wars from my personal perspective were were I found a lot more interesting and I was interested in sinking a lot more time into playing Destiny than as maybe I am now. I think I logged in yesterday for the first time and I did one strike and I logged out.
And that's where things currently sit with me with Destiny. Obviously, it's a little bit strange that I'm doing another Destiny video having said I'm not going to cover Destiny lore anymore.
I'm still I'm on the fence. I'm on the fence. [snorts] I've got the itch, but I think like I don't if I do cover Destiny lore, it just won't be definitely not a major focus. I think I've said that before. So, >> [music] >> we want to get into this article. We're going to go through it real quickly without wasting too much of your time.
They bought Bungie for 3.6 million.
Okay, however, the studio has struggled financially since then with Destiny 2 failing to do the business and its new game Marathon having a hard time breaking out. As a result, Sony Sony has admitted the acquisition has yet to pay off, right? During the financial year ending March 31st, [music] 2026, Sony's game and network services segment of which PlayStation is part of, right?
Because when we refer to Sony, we're referring to the entire Sony. That is games, film, TV, music, products, any other type of business that they're into that most people don't know that Sony's into and has a bunch of subsidiary companies that they own or have bought, etc., etc. Um which is why this is specific about talking about the game and network services only segment of Sony.
And PlayStation is part of that.
Suffered a 1.2 billion yen, which is 765 million impairment loss against Bungie's assets.
So, the money that was bought The money that Sony used to buy Bungie and its assets, they've They have They have filed a significant amount of losses, which is 765 million. That's It's a lot of It's a lot of money. It's a flat line cost. And we'll get to why later in this article why that's the case. Um impairment loss against Bungie's assets, Sony has already reported a 31.5 billion yen, approximately 204.2 million impairment charge charge as a result of Destiny 2's underperformance during the second quarter of its fiscal year. Now, I don't know if this Destiny portion is part of of this current reporting from Sony, but IGN is just giving us a quick reminder, I think, about that. I could be wrong. Let me know in the comments if if anyone has a better idea.
During the second quarter of the fiscal year, but it's now reported that another 88.6 billion yen, which is 565 million impairment charge during the fourth quarter.
Um I'm not really sure what the difference is between an impairment charge versus an impairment loss.
So, let's go back to Google here a second.
And we want to say uh impairment impairment, sorry.
Impairment charge meaning I would help if I spell meaning correctly without AI.
Okay, so in accounting, when an asset when an asset's value falls below book value or if its value can no longer be justified by reference to the future cash flow uh Sorry, future of the Sorry, to the future cash flows it is likely to generate.
It must be written down. This means a reduction in the asset value in the balance sheet and an equivalent expense against profit.
Mhm.
That sounds slightly worrying. I'm going to I'm going to be 100% honest because anytime that an asset is reassessed against the the the the purchase value is reassessed based on [music] its actual market value, its actual market viability it it needs to be it needs to have cash flow.
And if it doesn't have cash flow, it means Sony has a loss and they've reported what those losses are. And they're saying that Bungie is a studio, then as Marathon, and then as Destiny, we have we we have losses and we have charges. Now, what I don't know if charge means that um money is is is is costs are recouped somewhere. I have no idea. I'm not an accountant. Somebody who works with numbers would probably able to to tell me a lot clearer, but this this definition of an impairment charge meaning is concerning um for me as somebody who like runs a business. I I understand that this this is not it's not good overall. It's not the end but it's also not good. So, it's just an important definition for us to have.
Okay. Hardcore extraction shooter Marathon launched early July within the last fiscal year and crucially within the quarter in which Sony reported the additional 88.6 billion yen impairment charge against Bungie.
Marathon reportedly had a budget of more than 250 million. I'm I don't know if I should say I'm shocked or or I should or I shouldn't be shocked that Marathon cost 250 yen. Let's do a quick Google and say how much uh did it cost to make Destiny 2 cuz I'm really curious and I don't know if there's an actual figure here that we can um find. Here's a I know there's a Reddit post.
um Uh it says here somebody said 500 million doll- I I know if that's accurate though. That's That's feels like somebody just discussing things.
Um Wikipedia says Destiny 2 is free-to-play. No, it's not. It's absolutely not entirely free-to-play.
Um okay, here's a Polygon article.
Destiny is a So, Destiny 1 cost 500 million.
That's a That's a lot.
That's a lot.
Um and Marathon cost what? What's that? Like not even half? What's half of 500?
Uh Wait, actually, let's let's let's get a let's get a calculator.
Uh so, if we say 500 minus 250 Oh, okay, yeah. So, it's exactly half.
So, 250 million is exactly half of 500 million. It cost Destiny It cost Bungie 500 million to make D1.
So, I'm going to imagine that if it cost 500 million to make D1, it must be double that for Destiny 2.
And it probably explains why we have experienced so many gameplay reductions.
It's a It's It almost sounds like it's been about stripping Destiny back to [snorts] core aspects.
And I think Sony's probably saying "Hey, we're going to give you a budget of 250 million to make Marathon. Make it happen."
And the Destiny team uh Bungie team got together and are like, "Okay, let's How do we do this? Like, what Can we do this? Can we make a AAA extraction shooter, which is probably the worst genre to honestly launch another game into. Um but I think I think Bungie probably looked at it and like, "We're a shooter business We're in the the business of first-person shooters. We had Halo.
We have Destiny.
>> [music] >> What else can we do?" And then and somebody is probably like, "Well, what about extraction?" Right? It's actually weird to me that they didn't go "Okay, let's do a Battle Royale like Fortnite or PUBG."
Um or even like >> [music] >> a purely P Can like Okay.
Si- slight off tangent. It's actually weird to me that Bungie didn't go, "Okay, let's do a Warzone type thing >> [music] >> and it just be purely PvP combat." That would have sold so [snorts] well.
Way better, in my opinion, than an extraction shooter. Potentially. I don't know. This is all hindsight. I don't work at Bungie, so I have no clue.
And I I don't want to like say things that's like slapping the the developers in the face.
Uh that's absolutely not what I'm interested in. So, if you were offended and you and you happen to be a developer watching this video, I apologize.
We're just [music] We're talking these things through. We're just airing how we're feeling.
We're not attacking anybody here. We're also speaking truth cuz like it's the truth of the situation. There's not a whole lot that we can we can do about it, which is why it's good to talk about these things so we get a clear understanding. This is This article is not even a a fraction of the piece of the picture of what is what has been ongoing internally for Bungie and what continues to go on internally um for [music] them. But, let's move on.
Uh Bungie Bungie repeatedly said that while Marathon has a steep learning curve over time, recovering from bad loss gets easier. [music] This is subjective. I'm going to be 100% honest.
But, when Marathon's recently launched raid experience Cryo Archive doubled down on the ultra hardcore experience with several requirements you needed to meet in order to access it.
Former professional Counter-Strike player Shroud said that while Cryo Archive offers an incredible experience, it's too difficult for casual players.
Speaking in a recent stream, the influential gamer said, "Cryo Archive is insane. It's the most elaborate extraction shoot a map I've ever seen in a game ever.
The loop they made is truly something special. The problem is it is too elaborate. It is too complex. It is too much of a grind.
Is your 9-5 grandma or grandpa going to be able to do it? I don't know.
Where does Bungie go from here? Marathon is far from a Concord-style live service disaster, I would agree. But, it's clear Bungie need to do something to increase sales, absolutely. Simply making Marathon easier to easier may not be enough to do the trick and would run the risk of alienating those who currently love it the way that it is.
Making [clears throat] it free to play this soon after launch would just anger those who paid full price.
Could a single player or PvE campaign spark renewed interest?
Could a traditional PvP mode help?
Um that kind of ties into what I was just talking about. Let let let's discuss these two questions for a moment.
I think the story of Marathon is a PvE story.
There's hardly any the original Marathon story, there was hardly any PvP involved. It was a PvE story. So, it completely makes sense to have a PvE campaign.
The problem with adding a as the problem with Marathon is it's too much like Destiny.
And if they add a PvE campaign, we're essentially making a Destiny 3. Now, I know everybody's going to be like, "No, Some Lab.
Um Marathon isn't Destiny 3." I would beg to differ.
Because if Marathon was not on the table, we would easily be talking about furthering development of Destiny 2 or segueing straight into a Destiny 3.
Because that that 250 million is what would I hope would have provided the ability to make a big enough dent in progressing Destiny to its next level, the the of of the potential it has.
I think that Destiny 1 released in a time where technology was different. It There was limitations.
In that decade since then dec- or decade a little and a little bit. Tech games development technology has come way further than it did. The engines that we have now, like Unreal 5 or CryEngine or Unity or or um Cry- is it CryEngine?
Sorry, you know, I said it. CryEngine in terms of some of the top engines um are phenomenal, right? What we can get for them. So, I think that there's something to be said that like I just don't know where internally Marathon suddenly emerged from when we've been talking about Destiny 3 for years. And we spent 5 years developing a brand new IP when Destiny had problems that still needed to be fixed from a general gameplay standpoint. I mean, there was some we've had some basic issues in Destiny that I think even till this day haven't been fixed. I mean PVP alone I think is a massive example of that. Um the loot table for Destiny in general has been flipped reversed so many times that it's like, okay, there was nothing wrong with the loot tables we had in I don't know. I I mean, I always go back to this, but Season of Arrivals, right? We had Season of Arrivals and that was it. I feel like the quality changed.
The focus was different and it had just reached peak of like what was enjoyable.
And everybody had established a build and then we reset again and it we started all over again, right?
And so Destiny's had these cycles of like resets, literal resets, or miniature sunsetting that I think eventually as a community um we kind of get tired of of of of seeing. So, yeah. Let's let's move on for that for that a little bit and and finish this article. During an investor focus Q&A, Sony Chief Financial Officer Lin Tao indicated the company will stick with Marathon in a bid to grow its user base.
Um it's really interesting because I think the context that you read this in, a lot of a lot of people are assuming, "Oh, that means Sony only cares about Marathon." This at all doesn't say that.
This does not say that Sony doesn't only care about Marathon, but they're specifically talking about Marathon because that's their latest product.
And they want to see it do well, right? Cuz PlayStation is fundamentally a game studio, and so it serves them no interest to see a game tank and and them look bad, okay?
Sony also don't want to mess up Destiny cuz it will look really bad. There is There is hardly any gamer who has not heard of Destiny or Bungie and has an opinion, even if they haven't played the game.
Destiny is is is like the gaming industry's equivalent of Star Wars. I'm going to be real. It's infamous. Um and that's that's a hard level of publicity to retain, good or bad.
And when you have large companies and studios like this, um bad news is good news because it means people are talking about your game.
Um and sometimes marketing strategies can be super drastic, like not hearing anything is also is also a marketing ploy because they know that they're they're going to hit us with something juicy later on, and boom, that's it, right? Destiny's immediately trending again.
Everybody's downloading the game again.
Everybody's hopping into the game again because like everything's been fixed, etc., etc. We've been through these cycles. We've been through these seasons.
Um There isn't too much I I I I think the stakes have always been high with Destiny.
But this is progressively higher than it than it ever has been. This is this is quite the peak. But let's move on. Uh in our studio business, 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 for goodwill. What does that mean?
Impaired the full amount of fixed assets. Let's Google that really quickly cuz that This is like this is becoming a education stream, but I it's really important.
Okay. If a market value of an asset is lower than the carrying value the asset is impaired and must be reduced to its fair market value.
Yeah, that that that that ties into what I was saying earlier, okay? Um it's fair market value and the amount of the right uh the amount of the write-down will be reported as a loss. Right. So, There's two ways we can interpret this.
This either means based on this definition that one Sony is going y'all overcharged us for this for this uh burger and fries and want a refund in the sense of or not a refund, but like we you you charge you you made a product, you set a price, you've overpriced the value of this product. It is not worth that.
So, we're going to strip it back to what we feel is its market value.
And I think that definition is where things get a little tense, a real dangerous, okay? Cuz in that territory, jobs are seriously on the line when it comes to game development studios. Um I could be wrong, happy to be corrected.
I'm not an expert, but in my limited experience, I understand that much. The other aspect of this definition, right, of what this market value asset is, where it says, "And the amount of the write-down will be reported as a loss." I said this earlier on, a lot of companies, um when they report losses, they can also write that off their taxes.
So, and this makes sense, and you'll understand why in a minute, cuz they explain it. Uh player re- player reception to Marathon is strong, with the game receiving a Metacritic score of 82, [music] and more than 90% of the player reviews on Steam being positive.
Engagement metrics, such as retention, also remain at a high level.
Going forward, we aim to improve the performance of the game 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. Um when they say content, I think like one of the sure-fire ways that we're probably going to see happen is like a a straight-up PVP mode.
Right? Where it's like maybe it's capture the flag style or hack the room style. I think I think it's OverWatch who has a mode that's all about like it's capture the flag. So, it's about who can hold a point for the longest.
I don't know how something like that would work into an extraction shooter world.
But as soon as you start adding other modes that like PVP oriented like that, it gets dangerous because you start to slip out of the extraction shooting niche. So, Bungie have the challenge of now looking at extraction shooters on a whole and going okay, what else could we add to flesh out Marathon? Cuz I think in a lot of ways Marathon Marathon feels like a living concept.
A living proof of concept. And I'm not really sure what the proof of concept is for either that Bungie says we can make a great triple-A extraction shooter or this is a proof of concept for like future work or both.
Um I'm we're splitting hairs right now, so I have no idea what that motivation might look like or what that internal discussion may even have been. Um So, it says while that while Bungie has dragged down Sony's financial performance for the year, that's that's that's that's this dude talking. That's Wesley cuz Sony didn't I don't know if Sony said that. Uh sales for the game and network services segment were essentially flat. I mentioned this earlier. And the operating income was up 12%.
Looking ahead, Sony expects its current financial year to end up with a flat operation operating income due to the incorporation of an increase in investments for the next generation platform, that is PlayStation 6. Uh yeah, and he says it here. Sounds uh very much like Sony's working hard on PlayStation 6. Yeah. Uh we plan to base our P uh PS5 hardware sales in [music] uh 2026 on the volume of memory we can uh procure at reasonable prices, and we expect hardware profitability to be essentially the same as 2025, Sony said.
Okay, so yeah, that's the entirety of the article.
Um so and I think that there are some key takeaways that I want to keep us focused on before we [music] lose our minds. The first one is that Sony's latest financial report confirms that Bungie is under a lot of pressure financially with both Destiny engagement and Marathon's performance failing below expectations. But importantly, Sony is still backing Bungie rather than abandoning the studio outright. I think that that's an important perspective to for us to have.
Um the lack of major Destiny 2 dis- discussions suggests, I think, that maybe Destiny may no longer be viewed as may no longer may no longer be viewed internally as Sony's main future growth engine. And I think that that would be a fair assessment. Um but that doesn't mean that Destiny's dead. Absolutely doesn't. Uh it likely means that Bungie's entering a transition period where the franchise needs reinvention modernization or a clearer long-term vision.
Um I think that those areas are key, right? The reinvention is huge.
Modernization, absolutely. I think under modernization, we're probably like graphical overhauls, potentially very loosely uh some sort of new game engine.
And a clear long-term vision. These are the These are the two things that we are waiting for right now, okay?
Um Also, I think Marathon appears to have become Bungie's biggest strategic gamble since the Sony acquisition.
Um even though the launch hasn't fully met expectations so far, I think Sony continues publicly supporting the game long-term.
Um which I think s- you know, they it suggests that the Sony still believe Bungie can recover, right?
If the studio stabilizes creatively and operationally. And I think that those are the two gray areas that that that where tension has uh more or less existed.
Uh but I think the positive side coming away from all this is actually that like m- the major industry pressure often forces studios to refocus.
And I think that that's a good thing. Um because then Bungie now has the opportunity to rebuild trust by simplifying priorities.
Um I think listening more directly to players and investing in the long-term health of Destiny instead of chasing too many projects.
Um because, you know, some of the best comebacks have started from moments exactly like this. You know, we've had We've been there, you know, we've had our curses of Osiris or our seasons of the worthy and all that period during COVID, right?
From season of the worthy onward and then obviously uh Edge of Fate into Renegades.
Uh well, actually no. I skipped one, Lightfall.
Um even though I I I don't necessarily agree with everybody's opinion of Lightfall, but I understand it and I I think I I agree to some extent. I was never one of those people who was like, "What's the veil?"
Uh >> [laughter] >> I don't mean to sound I hopefully that doesn't make me sound arrogant, but in the broadest sense, I kind of understood where the veil fit in. And I don't know if I felt like I needed a huge explanation about it. And maybe that's because I like a lot of the mystery, but uh I will agree, you know, a shorthand explanation as to what the veil is it was certainly valuable and the team at the time said they agreed and they fell short on that. I don't think that that was their original vision cuz remember that Lightfall was actually originally a part of Final Shape.
And had those two things been together, we would all still be here today. We would all still be playing Destiny because I think um the way that the seasons following Lightfall would have flowed totally different, right? We would have had a complete picture of uh everything that happened with Mayrsin Derresch, the Witness finally getting destroyed, entering the Traveler, or and everything in between, Heresy and Echoes, and Revenant, and uh Season of the Deep, and you know, it's just see or Season of the Wish, Season of the Witch, and all those subsequent seasons would have I think carried really well if they weren't cut up. And I don't know I think that happened like after the Sony acquisition.
Um Yeah. Maybe it was a case of like too much money, too ambitious, etc. And then we had the layoffs and and and that didn't really work out well. But yeah, I think that this is a unique moment for Bungie. I think the importance here is This is this could be a comeback moment for them if done well. But I think the realigning the reinvention and the modernization and like the clear long-term vision, these are the three things that we're hoping to get on June 9th.
It's a lot of pressure, but I It's a Bungie is a studio that's that's always been under a lot of pressure. So, I don't think that this is new per se to to them.
But I know that like when it's heads [music] down and they're quiet, then stuff's happening. Of course, it would be wonderful if we actually got like some comms that talked about that.
Um and that would be really helpful.
But yeah, that's all I have for you in this video. Hopefully, what we've talked about today has been a little bit helpful and easy for you to understand in terms of what is going on with Bungie at the moment and like what we're hopeful for, what we're what we're believing in.
Bungie as a team and the developers, Sony aside for a second, just the studio we know and love and what we know they can do and produce when they're allowed to be creative, get excited, tell fun stories, and and and cook really well. They know how to cook.
Um so yeah, I have another video I'm working on talking about what I would love to see in a Destiny 3 if that ever happened. Not sure when that will be out. [music] I'm currently still drafting the article, so once the article goes up then I'll work on >> [music] >> recording it as a video, but yeah, for now, thank you for watching. I appreciate you all. I know that it's been a while since [music] I've had any uploads.
Um, I've I've started different things to tell [music] different lore stories and nothing has really sat well.
Um, I've spent majority of my time drafting my uh, >> [music] >> my high fantasy / sci-fi novel series.
Uh, which is going really well. Started writing chapter three, but that is besides the point.
Uh, but yeah, I'll leave this here for now. I hope that you have enjoyed watching and listening to this video.
If you have, please don't forget to click the bell and subscribe to find out when my next video goes live.
Remember that no matter what you're facing at this moment in time, you can do all things.
Stay safe and Godspeed.
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