If Final Shape & Marathon aren't a commercial success @Sony will ultimately sell Bungie

[Thirty7ven]

Well the biggest advocate of buying Bungie was Jim Ryan. That man is gone, so there aren’t many who are backing them left. It’s not like I am making things up. You can literally read here that Sony is not satisfied overall with Bungie‘s performance so far.

Sony isn't happy with Bungie: PlayStation boss wants more 'accountability' from the studio on money and deadlines

SIE chairman Hiroki Totoki said during the company's recent earnings call that everyone needs to get "onto the same page."

www.pcgamer.com

All I’m reading is they want Bungie to be more productive or they will step in. That’s the contract.

 

[Entropi]

That’s something MS would do, not Sony. Sony would give them a chance to bounce back.

Although, MS would also close the studio if Marathon was a success.

 

[Johnic]

Although, MS would also close the studio if Marathon was a success.

 

[Yurinka]

Interesting is that Investors did pressure Sony on Bungie's earnings. Imagine for yourself if Bungie does not meet expectations. We know for longer Totoki was not overall happy with Bungie's performance. There would be several possibilities to sell them to: Tencent, Microsoft, Netease, Saudis Fond etc.
I kinda hope Bungie does not meet the targeted expectations, so in order Sony will sell them. Would help to slow down Sony's PC & GaaS ambitions once and for all.

Totoki never said he wasn't happy with Bungie's performance. His opinion about them is the same one any CFO would have about any game development team: that they are very creative, hard working and talented folks who suck at meeting milestones and budgets compared to other business like factories.

Destiny 2 already is a big commercial success, and like all the big previous updates this one will be very successful. After 7 years Destiny 2 is almost in sunset stage, but still generates around >200M per year. As a whole, Destiny 2 has made more money than any SIE game. And Destiny 1 broke the record of fastest selling new IP ever.

But Sony didn't buy them just for this project that is almost done, they mostly bought them for their upcoming multiple games under development like Marathon (whose announcement broke records in Youtube), more new IPs, more Destiny games, the adaptations of their IPs and to support their other GaaS titles.

MLB, Gran Turismo 7 (and Sports before it), Destiny 2 and Helldivers 2 are big successes, they will obviously continue forward with GaaS. Specially with Helldivers 2 becoming PS Studio's fastest selling game ever.

Sony won't sell Bungie, it wouldn't make sense at all. It's like to say that Nintendo should sell the team who makes the mainline Mario games if the release of some refurbished port doesn't perform well. Nonsensical.

 

[ethomaz]

The title doesn't match with the twitter.
And it basically says nothing at all.

Neither that Sony are not happy with Bungie or that they will sell it.

Seems like made up narrative?

They chances to sell Bungie is near zero with the amount of revenue/profit they give to Sony.

 

[ethomaz]

There's nothing in OP's source that remotely suggests the thread title.

This whole thread is just based off OP's imagination.

The twitter is not even related to comercial success or sell Bungie lol

 

[TigerFang]

Totoki never said he wasn't happy with Bungie's performance. His opinion about them is the same one any CFO would have about any game development team: that they are very creative, hard working and talented folks who suck at meeting milestones and budgets compared to other business like factories.

Destiny 2 already is a big commercial success, and like all the big previous updates this one will be very successful. After 7 years Destiny 2 is almost in sunset stage, but still generates around >200M per year. As a whole, Destiny 2 has made more money than any SIE game. And Destiny 1 broke the record of fastest selling new IP ever.

But Sony didn't buy them just for this project that is almost done, they mostly bought them for their upcoming multiple games under development like Marathon (whose announcement broke records in Youtube), more new IPs, more Destiny games, the adaptations of their IPs and to support their other GaaS titles.

MLB, Gran Turismo 7 (and Sports before it), Destiny 2 and Helldivers 2 are big successes, they will obviously continue forward with GaaS. Specially with Helldivers 2 becoming PS Studio's fastest selling game ever.

Sony won't sell Bungie, it wouldn't make sense at all. It's like to say that Nintendo should sell the team who makes the mainline Mario games if the release of some refurbished port doesn't perform well. Nonsensical.

If they earn 200+ million a year, how is it so that they aren't profitable, I mean they only have about a 1000 employees.

Even just yesterday I think Totoki said in the live stream that bungie did not break profits.

I don't think he was including the remaining acquisition costs, he was just comparing the costs of the studio vs revenue (im not a 100% sure).

Is the marathon development + Final Shape development costing 200+ million every year with only a 1000 employees?

 

[Evilnemesis8]

If they earn 200+ million a year, how is it so that they aren't profitable, I mean they only have about a 1000 employees.
Is the marathon development + Final Shape development costing 200+ million every year with only a 1000 employees?

US salaries aren't cheap.
They're in Bellevue, Washington which is essentially the greater Seattle area which is one of the larger gamedev scenes in the US. It's not Santa Monica and co. levels of California expensive but it's fairly close to it.

Oh and they fired folks sure but their real number is actually higher than you would think.

Has Destiny 2’s Bungie Actually Expanded To 1,400 Employees?

Everyone, including some Bungie employees, are confused about some recent listings that indicate the Destiny 2 developer has expended to 1,400 employees

www.forbes.com

While the number may be technically correct, there appear to be a lot of caveats here based on what I’ve heard about the situation. Update: Bungie has now given me some updates but there is a bit of confusion around some of these figures,

Bungie tells me they have about 1350 employees right now, which does not include contractors or Sony employees.
Contractors are indeed helping out, but outside help is not a new strategy for Bungie as they’ve done that in the past.
Bungie delisted many roles after the layoffs and there has not been a mass replacement of employees or re-hiring.
Employees have remained steadily at 1350 since the November layoffs.

1350~ is really expensive to run.

So yeah their dev costs per year must be fairly large.

 

[ethomaz]

I have no ideia where people made up the narrative Bungie doesn't make profit.
Destiny 2 is a cash cow.

 

[TigerFang]

US salaries aren't cheap.
They're in Bellevue, Washington which is essentially the greater Seattle area which is one of the larger gamedev scenes in the US. It's not Santa Monica and co. levels of California expensive but it's fairly close to it.

Oh and they fired folks sure but their real number is actually higher than you would think.

Has Destiny 2’s Bungie Actually Expanded To 1,400 Employees?

Everyone, including some Bungie employees, are confused about some recent listings that indicate the Destiny 2 developer has expended to 1,400 employees

www.forbes.com

1350~ is really expensive to run.

So yeah their dev costs per year must be fairly large.

Let's say around 900 of those people earns about 60,000 USD = 48 million

And let's say the other 500 people earn 100,000 usd = 50m (and mostlikely 500 people dont earn 100k)

let's 10-20 million for the electricity, motion caption, outsourcing stuff, CGI, art, etc.

That's only about 120 million.

I just fail to understand how their costs are that bad.

 

[Gediminas]

Let's say around 900 of those people earns about 60,000 USD = 48 million

And let's say the other 500 people earn 100,000 usd = 50m (and mostlikely 500 people dont earn 100k)

let's 10-20 million for the electricity, motion caption, outsourcing stuff, CGI, art, etc.

That's only about 120 million.

I just fail to understand how their costs are that bad.

54M not 48M

 

[Yurinka]

If they earn 200+ million a year, how is it so that they aren't profitable, I mean they only have about a 1000 employees.

Who said they aren't profitable? Btw, when announced the acquisition they were around 800 employees but now they have 1500-1600 people.

Even just yesterday I think Totoki said in the live stream that bungie did not break profits.

I don't think he was including the remaining acquisition costs, he was just comparing the costs of the studio vs revenue (im not a 100% sure).

I'll watch the stream again, I don't remember him saying Bungie wasn't profitable. And well, Sony never said they aren't happy with Bungie. In fact, yesterday they highlighted The Final Shape as one of the two main releases for this fiscal year.

And well, the first GaaS that SIE released with Bungie being part of the GaaS Excellence team (in addition to PS Studios and SIE publishing GaaS related stuff experts), Helldivers 2, has been a stunning success.

What I remember he said is something he knew before: that their G&NS operating income (SIE profit) in recent years is being negatively affected because they are still paying costs related to the acquisitions (meaning retention bonuses, getting a new office, business trips to update strategy and workflow, integration, etc) made in recent years, being one of them Bungie.

Which is a different thing of Bungie not being profitable.

Is the marathon development + Final Shape development costing 200+ million every year with only a 1000 employees?

They are supposed to be around 1500-1600 employees (no official data, just from LinkedIn and jobs websites that make these estimations) and are also working in more games, minimum the other unannounced game they teased in a job offer (probably the same they trademarked as Matter) and pretty likely Destiny 3, plus movie/tv show adaptations of their IPs.

I don't remember the number they make, I estimated it so probably was wrong. But let's say it's $250M/year. Let's say they have 1550 employees. That would give an average of 161.3K/year per employee. If they would have 1000 employees, it would be $250K/year per employee.

They also got a big new office a few years ago, which I assume they maybe still be paying and should have nice office costs.

So doing these numbers I'd say they may not be profitable if they really are >1500 people. But well, even if it's the case they will once they release all the stuff they have in the works. And in a context of AAA gamedev and growth would be normal: they make a big investment and takes some years to release the product and make money.

 

[Evilnemesis8]

Let's say around 900 of those people earns about 60,000 USD = 48 million

And let's say the other 500 people earn 100,000 usd = 50m (and mostlikely 500 people dont earn 100k)

let's 10-20 million for the electricity, motion caption, outsourcing stuff, CGI, art, etc.

That's only about 120 million.

I just fail to understand how their costs are that bad.

Where's the employee benefits/insurance/healthcare and other administrative costs in there?

How Much Do Employee Benefits Cost?

Employee benefits account for about a third of the cost per private industry employee. Make sure the benefits you offer match what employees actually want.

www.care.com

National average in terms of benefits is 29.6% of a total's employee cost
I also think you're underestimating that 10-20 million for those outsourcing and other expenses too.




This isn't that outlandish of a cost. Here's the CEO of MiHoYo estimating that post launch of Genshin, it'll cost them $200M a year to continue development of Genshin Impact.

Genshin Impact set to cost double its initial budget for each year of ongoing development - VG247

Developer miHoYo reckons that on-going development will cost $200 million per year.

web.archive.org

That’s according to the president of developer miHoYo Cai Haoyu, who told Chinese publication 16p – as translated by Twitter user AeEntropy – that it cost the firm $100 million to make the game. Furthermore, the exec reckons that Genshin Impact will have a development budget of $200 million for every year that the project is being worked on.

While we’re now used to the games-as-a-service business model, this is a look at just how much investment companies need to make in order to keep these projects going.

At the moment, 700 people are working on Genshin Impact alone, roughly 29% of miHoYo’s 2,400 total staff.

These are with Chinese salaries and probably way worse compensation and benefits for employees and the fact they're got them working on that 996 schedule.

 

[TigerFang]

Where's the employee benefits/insurance/healthcare and other administrative costs in there?

How Much Do Employee Benefits Cost?

Employee benefits account for about a third of the cost per private industry employee. Make sure the benefits you offer match what employees actually want.

www.care.com

National average in terms of benefits is 29.6% of a total's employee cost
I also think you're underestimating that 10-20 million for those outsourcing and other expenses too.




This isn't that outlandish of a cost. Here's the CEO of MiHoYo estimating that post launch of Genshin, it'll cost them $200M a year to continue development of Genshin Impact.

Genshin Impact set to cost double its initial budget for each year of ongoing development - VG247

Developer miHoYo reckons that on-going development will cost $200 million per year.

web.archive.org

These are with Chinese salaries and probably way worse compensation and benefits for employees and the fact they're got them working on that 996 schedule.

I understand your prior statements - but I don't think Genshin is a good comparison at all. They will do whatever it costs and keep their experienced developers as well as hire new employees, they also earn like 175+ million per month from Genshin in particular.

 

[Evilnemesis8]

I understand your prior statements - but I don't think Genshin is a good comparison at all. They will do whatever it costs and keep their experienced developers as well as hire new employees, they also earn like 175+ million per month from Genshin in particular.

So you're just going to gloss over the fact you've underestimated huge portions of gamedev costs and leave it at that?
Nice napkin math, you sure showed the fact that these darn devs are wasting money!

Secondly, how much do you think the average salary of MiHoYo developer cost in Shanghai compared to the Seattle area?


Edit: Also how much money a game makes is irrelevant to costs.
Some GaaS games make $500M a year, some make 1Billion, some make 2-3-4-5B etc. That doesn't change the headcount they have at the studio.

Fornite/WoW/Destiny/Insert any GaaS still have like 800+ salaried employees working on their big revenue generating game at all times. They just have different operating income.

 

[TigerFang]

So you're just going to gloss over the fact you've underestimated huge portions of gamedev costs and leave it at that?
Nice napkin math, you sure showed the fact that these darn devs are wasting money!

Secondly, how much do you think the average salary of MiHoYo developer cost in Shanghai compared to the Seattle area?


Edit: Also how much money a game makes is irrelevant to costs.
Some GaaS games make $500M a year, some make 1Billion, some make 2-3-4-5B etc. That doesn't change the headcount they have at the studio.

Fornite/WoW/Destiny/Insert any GaaS still have like 800+ salaried employees working on their big revenue generating game at all times. They just have different operating income.

I was just saying that MiHoYo can drive up costs more because they are in a position where they can, whereas bungie isn't.

But I think your other points are right, i was just curious how exactly is their cost so high that they can't make profit, didn't mean to argue with you.

 

[shrike0fth0rns]

Interesting is that Investors did pressure Sony on Bungie's earnings. Imagine for yourself if Bungie does not meet expectations. We know for longer Totoki was not overall happy with Bungie's performance. There would be several possibilities to sell them to: Tencent, Microsoft, Netease, Saudis Fond etc.
I kinda hope Bungie does not meet the targeted expectations, so in order Sony will sell them. Would help to slow down Sony's PC & GaaS ambitions once and for all.

Speculation nonsense

 

[shrike0fth0rns]

Speculation nonsense

Also genki s a Nintendo fan boy that spreads negative ps news

 

[Cyberbroly7]

No they bought Bungie overpriced because they were panicking, that Microsoft would gobble them up. Bungie never did fit in PlayStation's philosophy. They are more of a hassle than fortune. Also Sony can sell Bungie with a profit.

No who was panicking? Sony bought bungie 3 months before announcing it for their live services plan which is still in progress, no bungie would agree to be bought by Microsoft.. PlayStation is filled with bungie devs at Valkyrie Entertainment ,Firesprite, Firewalk and others scattered all over PS single player studios and now has Bungie itself making them able to start making internal live service or multiplayer games.... PlayStation philosophy can include live service, what kind of publisher has no constant cash making ATM games for future investments?

 

[Cyberbroly7]

Bungie never fit in with Sony, they have always been an outlier. It never made any sense to buy them.

Cause u don't know their plans