The closure of Naughty Dog’s The Last of Us multiplayer game sent shockwaves throughout the video game industry, and surprised even the developers who were making it. But for one former Xbox veteran, it was the right call — despite how painful it was.
Naughty Dog stopped development on The Last of Us Online in December 2023, saying it would have needed to put all its resources into post-launch content for years to come — an approach that would have severely impacted its ability to develop future single-player games, including what we now know is Intergalactic: The Heretic Prophet.
Earlier this month, the director of The Last of Us Online spoke out on the “devastating” impact of its cancellation, which he said he only found out about 24 hours before Sony made it public.
Vinit Agarwal, who was game director on The Last of Us Online, spoke openly about why The Last of Us Online was canceled despite being “very very close to done,” blaming it on a combination of factors including the widespread industry pullback following COVID lockdowns, and Sony’s subsequent reassessment of its live service push. Naughty Dog had to make a choice between The Last of Us Online and single-player adventure Intergalactic: The Heretic Prophet, Agarwal said. The decision, as we know, was to go with Intergalactic: The Heretic Prophet.
“And so one of the casualties of that was this game I was directing,” he said. “Basically, at one point, a decision had to be made. ‘Okay, make this game or make the next game that Neil Druckmann was directing, the president of the company.’ And so, kind of naturally, you can understand what happened there. They had to pick the game that was kind of the soul, bread and butter of the studio, rather than this experimental game that I was working on that I believe was going to be really big, but unfortunately couldn’t see the light of day.”
Now, Laura Fryer, who has extensive experience working for video game publishers under her belt, has suggested that the real mistake was Sony and Naughty Dog greenlighting The Last of Us Online in the first place.
Fryer, a founding member of Xbox and one of Microsoft Game Studios’ first employees, released a new video in which she expressed sympathy with the team at Naughty Dog who had to see their project canceled, but criticized the lack of planning.
“A lot of people are saying they should have just finished the game and shipped it because it was so close, and I understand how frustrating it must be for the players who were looking forward to this game,” Fryer, who also spent four years as general manager of WB Games Seattle, where she oversaw game development for Warner Bros.’ internal studios in the Seattle area, including Monolith, creator of the Gotham City Impostors and Guardians of Middle Earth, said.
“But I think that’s missing the bigger picture because the truth is that this is a classic example of the sunk cost fallacy. And I’ve seen it play out many times before where you have a studio that’s already spent many years and millions of dollars and they feel like they have to ship the game anyway, that they have no choice, even when they know the long-term live service support will be brutal. Then the game comes out halfbaked, the team burns out on endless updates, and it usually ends badly.
“Naughty Dog didn’t do that. They made the harder choice. They looked at the road ahead and they realized that they should stop instead of risking turning the entire studio into a live service operation that was only going to be able to support one big title for years. In my opinion, that was the right call, even though it hurt the team that worked so hard on it. They chose to go back to what the bread and butter of their studio was, single-player narrative games.”
Fryer’s criticism was aimed at leadership who not only allowed Naughty Dog to develop a The Last of Us live service game, but to continue to do so for seven years.
“I keep coming back to the bigger question of why did they start this game in the first place,” Fryer said. “Where was the planning? Live service games are not a mystery. There’s plenty of data out there that they could have looked at to understand what it would take to do this type of game. You’ve got new maps. You’ve got new modes, weapons, seasons, balance patches. It’s an infinite treadmill. Any studio leader could have run the numbers on what a team Naughty Dog size could realistically support. They could have seen pretty clearly that a team the size of Naughty Dog could never support a live service game and all of their amazing cinematic single player games. It wasn’t possible.
“But instead of doing that analysis, they went ahead and let the game go forward. They let it run for seven years. Eventually, Bungie was brought in to do an analysis in 2023, and their reality check on player retention and what it really takes is what finally convinced people that it might be a problem.”
That’s a reference to comments from former PlayStation executive Shuhei Yoshida, who, speaking to Sacred Symbols+ last year, said feedback from Sony-owned developer Bungie helped to convince Naughty Dog to scrap The Last of Us multiplayer.
“The idea for The Last of Us Online came from Naughty Dog and they really wanted to make it,” Yoshida said. “But Bungie explained [to them] what it takes to make live service games, and Naughty Dog realised, ‘Oops, we can’t do that! If we do it, we can’t make Intergalactic: The Heretic Prophet.’ So that was a lack of foresight.”
“The ambition was there, but the realistic upfront planning wasn’t,” Fryer continued. “Naughty Dog ultimately protected what they do best: good cinematic single-player games. That’s good leadership, even when it hurts. And sometimes the bravest thing a studio can do is to admit that something isn’t going to work before it drags the whole company down with it.
“So when people get mad about the cancellation, I think we’re focusing on the wrong thing. The pain for the team is real and I feel for them. That is a lot of time to put into a game to ultimately not have it ship. But pulling the plug, that was not the real mistake. Okay, the real mistake was in greenlighting this experiment in the first place without doing the homework upfront. That’s my take.”
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
