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Forbes: Bungie would have been in jeopardy if it weren't for Sony purchase

Draugoth

Gold Member
EN_Bungie_TheFinalShape_S3_2560x1440_2560x1440-9bdaae3a03394737c6fddecd62f00a70


Bungie’s management is not blaming Sony for the company's layoffs. Some employees were told that if the Sony buyout did not happen, the studio would have been in jeopardy, according to a new Forbes report made by someone with verified insider knowlodge:
  • Management said other levers were looked at to avoid layoffs. When employees asked if one lever was executive compensation, they were told no, and that it would not happen at the company.
  • Internally, really no one is blaming Sony for this, even management. Some employees were told that if the Sony buyout did not happen, that with current Destiny 2 performance the studio itself would have been in jeopardy if they were still independent.
  • Cannot be fully confirmed among every employee but at least to some, D2 director Joe Blackburn is not really considered to be one of the corporate culprits here for how things went down.
  • The expensive new building was a separate project that likely would not have saved jobs given the context of when that was drafted and when work started. Similarly, the $1.2 billion in employee retention from Sony was spent long ago, often on buying out employees’ Bungie shares which then went to Sony. There’s nothing left in that pot to avoid layoffs, which wasn’t what it was meant for this late in the transition.
  • The trendline of spending on the game over time made the current year’s revenue estimates somewhat logical, so yes, the 45% miss is important, and was not necessarily some wildly inflated projection, however nearsighted it ended up being. There has been a real, damaging drop post-Lightfall in terms of player engagement/spending. And Lightfall sold very well.
  • Employees are extremely angry with leadership now, and have often communicated that publicly in meetings. Bets were made that did not pay off, but those who made them remain in the company, a fact lost on no one.


  • The Final Shape:
    • The Final Shape delay was known by some a couple months ago. But it is happening late enough where there cannot be a 30th Anniversary size drop to split the season, as that took around eight months to build. There will be something in the season 23 gap, though no specifics.
    • They want The Final Shape not just to be as good as Forsaken or The Taken King but better. Hence the “good not great” feedback that will be polished during a delay. It needs to be the best, and it’s viewed as the key to turning things around.
    • The Final Shape campaign and features are reportedly quite solid even in its current state, ahead of planned future work. But they want to go even further, and there is some concern about crunch to make that happen, even with a delay.

Destiny Overall:


  • Part of the new PvP Strike team was impacted by layoffs, but significant progress has been made on the map pack already and it should not be cancelled.
  • No significant changes have been announced to staff for the longer term future of Destiny 2 plans because of these layoffs and the delay yet. No known plans to reduce support for D2 below old, already planned levels. No new info about the long, long term or something like Destiny 3 (which I did not get the sense was really on the radar).
  • In-game LFG has been tremendously difficult from a tech perspective and reportedly was announced to the community before the devs themselves. It is far more complicated than players will understand even if it seems like it’s an obvious thing the game should have. It’ll launch, but it’s been a tough road.
 
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skit_data

Member
Similarly, the $1.2 billion in employee retention from Sony was spent long ago, often on buying out employees’ Bungie shares which then went to Sony.
Can someone with a little experience in corporate finance ELI5 this part?
 
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StreetsofBeige

Gold Member
[*]Management said other levers were looked at to avoid layoffs. When employees asked if one lever was executive compensation, they were told no, and that it would not happen at the company.
[*]The expensive new building was a separate project that likely would not have saved jobs given the context of when that was drafted and when work started. Similarly, the $1.2 billion in employee retention from Sony was spent long ago, often on buying out employees’ Bungie shares which then went to Sony. There’s nothing left in that pot to avoid layoffs, which wasn’t what it was meant for this late in the transition.
[*]Employees are extremely angry with leadership now, and have often communicated that publicly in meetings. Bets were made that did not pay off, but those who made them remain in the company, a fact lost on no one.
lol
 

StreetsofBeige

Gold Member
Can someone with a little experience in corporate finance ELI5 this part?
Part of the big Sony buy of $3.6 billion was a portion of it was partitioned off as employee retention perks. So if an employee stuck around, they'd get paid out by Sony in cash and those shares would go to Sony since they own Bungie.

It's like Company A buying out Company B. Company A pays $50 for every share out there of Company B. After it's all processed, Company A owns everything to do with Company B.

The deal was structured in such a way that if Bungie employees stuck around, they'd get Bungie shares (or already have them). Periodically, they'd get cashed out over time bit by bit as long as you are a Bungie employee. But as per tweets yesterday, if you get fired or quit before any cash out dates the employee gets zero. So what happened was Bungie fired 100 people before some cash out days to save on paying those people retention pay outs. Instead, those shares are kept by corporate and if any execs by default own any corporate shares they'd get the pay out instead.
 
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Punished Miku

Human Rights Subscription Service
I would have never in a million years anticipated that Bungie would be in financial trouble if not for a buyout. Pretty wild state for the industry to be in where you can run one of the most aggressively exploitative monetization schemes pushing the same game for years and still be nearing collapse.

AAA gaming is a such a joke at this point. Sounds like some aggressively bad management at Bungie to squander that much wealth and resources.
 
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Draugoth

Gold Member
I would have never in a million years anticipated that Bungie would be in financial trouble if not for a buyout. Pretty wild state for the industry to be in where you can run one of the most aggressively exploitative monetization schemes pushing the same game for years and still be nearing collapse.

AAA gaming is a such a joke at this point. Sounds like some aggressively bad management at Bungie to squander that much wealth and resources.

I guess losing millions of players in favour of a couple hundred whales didn't work out.
 

yurinka

Member
Also bungie "we will only be purchased if we can keep multiplat"
One of the reasons Sony bought them is because Sony want to expand outside PS, so Sony never wanted to make them exclusive.

Now that Sony owns 100% if desired Sony can make them exclusive. But they won't, because keeping them multi generates more money for Sony.

Shouldn’t have let them call the shots. Make the games fucking exclusive.
That would reduce Bungie's revenue and profitability. They need the opposite, to increase it.

Increase quality.
This helps. The problem is that 'quality' means different things for different people.
 
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Roxkis_ii

Member
Yeah that would be nice but Sony didn’t pay $3.6 billion for that.
Yeah they paid for their experience in live service games, but if Sony is letting them release multiplatform games, they should be able to still make single player games.... If they can afford it.

Man, I really hope Bungie can pull through this rough patch. Their gunplay is really good.

Arent they making a single player game right now?

I haven't heard about anything outside of Marathon. What's the details??
 
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Bernardougf

Member
They wanted both. Staying multiplat obviously helps sales and being acquired keeps them afloat. Layoffs would have been more than 8% if these games all became Sony exclusive.
Yes.. but if you are in a position of weakness you usually cant make too much demands... anyway is all speculation
 

Unknown?

Member
Ryan was well and truly taken by Bungie, over 3 billion for a studio in trouble 🙄
This is the risk you take by buying huge companies, it's much better to buy smaller ones or create your own. Microsoft has similar problems, if COD(their cash cow) ever starts to lose popularity, Activision is done and now it's Microsoft's problem.
 
Leaving Microsoft was the worst decision Bungie ever made.
I find Marty's take most interesting.



Destiny is still one of the most popular live service games and would not exist if they were still with Microsoft.

I would argue it was one of their best decisions.
Didn't Microsoft pass on publishing Destiny?
 
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Darsxx82

Member
You're telling me that Sony bought Bungie knowing it was in decline and in trouble but at the same time they paid 3.6B and sold the acquisition as the best in the history of video games??

And supposedly, this new story leaves SONY in a better position??:messenger_grinning_sweat:
 

T4keD0wN

Member
Sad for the employees, but its a shame Sony bailed them out instead of letting them face the consequences of their actions. They could have used those 3b for something worthwhile.
 
Destiny is still one of the most popular live service games and would not exist if they were still with Microsoft.

I would argue it was one of their best decisions.
We are learning that the revenue Destiny brings in is not enough to sustain the company and that Bungie's existence as a company was in the balance. Doesn't seem like a happy story to me.
 
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Roxkis_ii

Member
Didn't Microsoft pass on publishing Destiny?

I believe so. I think that's the reason Bungie left.

We are learning that the revenue Destiny brings in is not enough to sustain the company and that Bungie's existence as a company was in the balance. Doesn't seem like a happy story to me.

It took ten years for the gravy train to slow down and we got two good games in between that time. Their story isn't over yet, and even if it did end, its still would have been better slaving away at games they aren't passionate about.
 
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Unknown?

Member
We are learning that the revenue Destiny brings in is not enough to sustain the company and that Bungie's existence as a company was in the balance. Doesn't seem like a happy story to me.
How would staying at Microsoft help them? If they lost tons of revenue, their existence would also be threatened.
 
I'm sure they will be back in form with a new game. It seems like realizing when the old cash cow is on its last leg early enough to have a new project ready when that starts to happen would be the challenge of these big GaaS operations.
 
I believe so. I think that's the reason Bungie left.



It took ten years for the gravy train to slow down and we got too good games in between that time. They story isn't over yet, and even if it did end, its still would have been better slaving away at games they aren't passionate about.
Both Destiny 1 and 2 were met with criticism at launch for lack of content and non-existent story. It was the addition of paid expansions that gave the games longevity and now people are feeling nickel and dimed.
 
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