After *The Last of Us Online* Was Canceled, Naughty Dog Became Even Clearer-Eyed

A good call. Canceling this project at least stopped the mistake from getting bigger. Laura Fryer’s judgment is blunt and to the point: this cancellation did more good than harm, and I agree.

The Last of Us Online didn’t fail at the last hurdle; the direction was flawed from the very beginning. Laura Fryer’s criticism was aimed squarely at Naughty Dog’s management, not the developers on the ground. The team worked on it for seven years and poured in massive funding, only to realize in the end that neither retention nor resource allocation made sense. That wasn’t an execution failure; it was a failure of early judgment.

She’s exactly right: the biggest fear with multiplayer live-service games is not figuring things out clearly in the early stage. Planning, update cadence, long-term operations, player retention—none of these are things you can patch in after launch. Naughty Dog didn’t bring Bungie in to analyze the project until 2023, and only then truly realized how serious the problem was. That response was already too slow.

That said, credit where it’s due. A lot of studios sink years and millions of dollars into a project, then just force themselves to launch it anyway, letting the project, the team, and their reputation all get hurt together. At least this time, Naughty Dog didn’t fall into the sunk cost trap. They didn’t try to force out a live-service game they themselves might not have been able to sustain just to recoup the investment.

The problem is also very real. With Naughty Dog’s team size, trying to maintain a large-scale live-service game while continuing to make high-quality single-player narratives is almost impossible. A live-service game doesn’t end when it’s finished—it means constant updates, constant data tracking, constant attention to retention. If they had really gone down that road, Naughty Dog could very well have been tied to a single game for many years.

That’s also the part of this whole situation the industry should remember most. Live-service games are not some mysterious black box; whether they can work or not, the market has long provided plenty of data to reference. Even former Sony Worldwide Studios president Shuhei Yoshida was not particularly on board with Sony’s big push into live-service games, which shows that the doubts never came only from the outside.

For players, the bad news is that seven years of work have been wiped out, and the former project director even called it a “devastating moment.” The good news is that Naughty Dog will most likely shift its resources back to what it does best: single-player narrative games. Rather than a possibly rushed online game that launches only to bleed out over the long term, I’d rather wait for a truly complete new title.

The industry trend is also very clear. Not every AAA team is suited to chasing live-service games, especially studios driven by auteurs and known for storytelling. Being good at telling stories does not mean being good at long-term live operations. Choosing the wrong direction is more fatal than slow development.