Bungie’s Marathon, once billed as the cornerstone of Sony’s live-service future, is now looking like a cautionary tale.

First came the lukewarm reception to Marathon’s reveal. Then, plagiarism allegations surfaced. Now, a report by the Sacred Symbols podcast suggests Sony has pulled the game’s entire marketing budget ahead of its planned autumn 2025 release. That’s rarely a great sign. At best, we’re probably looking at a delay. At worst, a quiet cancellation might already be in motion.

Meanwhile, the rest of the PlayStation business is doing just fine. Sony recently posted strong results for last year, with the PlayStation division reporting record profits. In the fiscal year ending March 2025 (FY2024), Sony’s Game & Network Services division pulled in ¥4.6 trillion ($31.5 billion) in revenue, up 9% year-over-year. More impressively, its operating profit surged 43% to ¥415 billion ($2.8 billion).

The profit growth is purely driven by the platform, with third-party game sales and PlayStation Plus doing the heavy lifting. In fact, both hardware sales (predominantly PS5) and first-party software (PlayStation Studios titles) revenue decreased year-over-year.

On paper, all of that looks impressive, but it’s not the full story. A significant portion of the revenue increase comes from foreign exchange gains. Adjusted for inflation and FX effects, FY2025 revenue is actually projected to come in below FY2023 levels. 

Finally, one big problem remains: The live-service plan that was supposed to future-proof PlayStation is already falling apart.

PlayStation’s Pricey Live-Service Adventure

Back in 2022, Sony announced an ambitious goal: to launch 12 AAA-scale live-service games by March 2026. The strategy was to move beyond one-and-done single-player hits and tap into the recurring revenue model behind games like Fortnite and League of Legends.

But reality set in quickly. By late 2023, that number had quietly been cut in half. Even fewer titles are still alive today. (We covered Sony’s live-service gamble previously in 2023.)

The most public failure came with Concord, a multiplayer sci-fi shooter from Firewalk Studios. Concord flopped spectacularly, going offline just two weeks after it launched in mid-2024. Soon after, Sony shuttered Firewalk altogether.

Concord was a wake-up call: Sony swiftly hit pause on several other live-service projects, including unannounced titles at Bluepoint (God of War) and Bend Studio (rumored to be an untitled sci-fi shooter). Even Naughty Dog’s long-awaited The Last of Us multiplayer spinoff was quietly shelved.

Now, only four high-profile projects remain: Marathon (Destinymaker Bungie’s new sci-fi extraction shooter), Fairgame$ (Haven Studios’ team-based heist shooter), and two multiplayer Horizonprojects (Horizon Online by Guerilla Games and a rumored Horizon MMO by Korean developer NCSoft).

Fairgame$ is also showing signs of trouble. The studio’s founder, Jade Raymond, recently departed Haven Studios, reportedly following an underwhelming external playtest. Between the setbacks at Fairgame$ and the issues surrounding Marathon, it’s unlikely that morale is particularly high on either team right now.

Looking Beyond Live Service

Whether or not Fairgame$, Marathon, or Horizon Online make it to launch, Sony’s live-service pivot has clearly failed.

At the same time, there’s been a shake-up at the top. Jim Ryan, the architect of the live-service push, retired in 2024. He was succeeded by co-CEOs Hermen Hulst (formerly head of first-party studios) and Hideaki Nishino (formerly head of services and platform). Just eight months later, in January 2025, Nishino became the sole CEO of Sony Interactive Entertainment (SIE). Hulst remains in charge of first-party content, but no longer shares executive leadership.

The leadership shuffle opens the door for a reset. Backpedaling from failed bets is far less awkward when the executive who made them is no longer calling the shots. It wouldn’t be surprising if PlayStation’s content strategy quietly returned to its roots: tentpole, AAA single-player titles like Ghost of Yōtei and Death Stranding 2.

But returning to what has worked before doesn’t answer the growth question. If live service is a dead end, where can PlayStation look next? 

Let’s look at three possible avenues: hardware, cross-platform, and M&A.

Hardware. The PlayStation 5 is in the late stages of its life cycle. While its successor is certainly in development, a launch is still years away. At this stage, unit sales usually start slowing down, while the profit per console improves as production becomes cheaper. For now, Sony is still selling around 15 million PS5 units each year. 

Beyond the main console, results are mixed. The PSVR 2 launched with great fanfare, but it failed to gain traction. On the other hand, the dedicated remote play device PlayStation Portal has quietly outperformed expectations. Even so, successful accessories are niche products with lower price tags. They’re unlikely to ever match the scale or impact of the core console and software business.

Cross-platform. PlayStation is making more money from PC games than it used to. Games like Spider-Man, God of War, and The Last of Us Part II have all been ported to PC, bringing in fresh revenue from existing back-catalog titles. The surprise hit Helldivers 2 even launched simultaneously on PC and PS5 in 2024, becoming one of PlayStation’s bestselling PC titles. 

All in all, while PC revenue still trails far behind PlayStation’s core business, it has a high margin and is growing. Sony does not report these numbers, but estimates place them in the hundreds of millions dollars annually.

M&A. Finally, there’s mergers and acquisitions. Sony has earmarked ¥1.8 trillion (roughly $12 billion) for strategic investments between 2024 and 2026 (that’s all of Sony, not just PlayStation). As of now, about ¥1.29 trillion($9 billion) remains unspent. Given its mixed track record with gaming acquisitions in the 2020s, Sony has reason to be cautious. But if the right deal comes along, it has the money to move. What it actually plans to do with that capital, though, is still unclear.

Slow and Steady Wins the Console War

None of the three avenues (cross-platform publishing, hardware innovation, or M&A) seem likely to dramatically move the needle. They can boost margins or bring in some incremental sales, but they won’t reinvent the business. PlayStation’s failed live service has left Sony without a clear path to a new audience, increased engagement, or deeper monetization.

But maybe it doesn’t need one. The PlayStation platform is hugely profitable. Monthly active user count is still growing, albeit slowly. And Sony’s traditional strengths — premium hardware and first-party exclusives — are doing exactly what they’re supposed to: delivering strong returns. That steady performance is translating into a clear lead. While Xbox has gone all-in on Game Pass and its platform-agnostic strategy, it’s trailing behind in the console war. Sony, by contrast, is winning this generation by doubling down on its exclusivity-first strategy.

Sony may have burned a billion dollars chasing live-service dreams, but it’s not alone. Microsoft’s Game Pass still isn’t profitable, and its strategy remains muddled. PlayStation’s path forward won’t be explosive. But it will be profitable, predictable, and likely dominant.

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In Other News

💸 Funding & Acquisitions:

• Amplitude Studios raises over $13M to fund upcoming games.
• Diversion raises $12M in funding for its version control platform for creatives.
• Rumi raises $4.7M to change passive media into interactive AI experiences.
• Oncade raises a $4M seed round to empower game developers and communities.
• Apple acquires Sneaky Sasquatch developer RAC7.

📊 Business & Products:

• Fantasy Life i: The Girl Who Steals Time sells 500K units in three days.
• Nazara’s FY25 revenue is up 43% to $190M after its pivot to "high margin" game segments.
• Embracer Group’s mobile revenue drops 31% after the Easybrain sale.
• Mobile games successfully "squeezing" more revenue per install as average player spending rises 11% despite 7% install fall.
• CD Projekt posts flat sales results for Q1 2025.

👾 Miscellaneous:

• Pokémon Legends: Z-A releases this October.
• Discord’s new currency pays users to interact with ads.
• Apple to launch a dedicated gaming app across all devices this year.
• Build a Rocket Boy drops a trailer detailing MindsEye’s blend of Grand Theft Auto and AI robot combat.
• AppOnBoard launches Quvy to speed up user acquisition.

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*Source: TikTok Marketing Science Journey of Launch Research 2023, conducted by Material, Mobile

Content Worth Consuming

The Big Clair Obscur: Expedition 33 Interview: Sandfall and Kepler on Team Size, the Return of AA Games, and What's Next (gamesindustry.biz): “The success of Clair Obscur: Expedition 33 — which sold 2 million copies within 12 days of launch — has meant all eyes are now on its developer, Sandfall Interactive. As the games industry mulls how to move forward, faced with a saturated market, widespread layoffs and spiralling development costs, the fact that an original title made by a relatively small team could see such massive success gives hope to everyone.”

Hogwarts Legacy's John Blackburn Is Cool in the Arcade (The Fourth Curtain): “Our guest John Blackburn is a founder and CEO of Avalanche Software, makers of hundreds of games for dozens of platforms, such as Hogwarts Legacy and Disney Infinity. He has tales of when games paid royalties and having to take a chance. We discuss how to talk to execs and being true but not canon.”

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Clair Obscur: Expedition 33 Tops Billboard Charts and Mario Kart Jazz (GXM Podcast): “Sandfall Interactive’s debut RPG, Clair Obscur: Expedition 33, has been an overwhelming success amongst critics and the official charts. With more than 90 million track streams on DSPs and top spots on the Billboard Classical Charts in less than one month after its release, Mat and Tom explain the hype behind the game’s original soundtrack and how [it’s] enjoying the same critical praise as the game itself.”

Sandsoft CEO on How a Cohesive National Strategy Could Level up Spain's Game Industry (pocketgamer.biz): “Pocket Gamer Connects heads to Barcelona next month on June 3rd to 4th. In the build up to the event, we've been reaching out to speakers and local companies to get their views on the Barcelona games hub and wider Spanish sector. We caught up with Sandsoft CEO David Fernandez about setting up the company's Barcelona studio and what it will take to make the city a leading games hub.”

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