Bungie Faces Massive Layoffs as Destiny 2 Ends and Marathon Struggles

A well-known game studio may be next in line to join the current wave of layoffs in the industry. Multiple news outlets are reporting that Bungie is contemplating a big round of layoffs this summer. Up to half of the company's staff are believed to be affected.

The reports come at a particularly bad moment for the corporation, as Destiny 2's long-running expansion roadmap has ended and Bungie's latest live-service effort, Marathon, is still struggling. Recently, Xbox has been under the spotlight for its restructuring efforts. Now the spotlight is on Sony-owned Bungie and what could be one of the biggest layoffs in the studio’s history.

Industry insiders indicate that about 400 workers may be at risk.

Bungie is said to have around 800 employees, meaning any potential layoff would be a major blow to the company and the gaming industry as a whole. It’s not exactly surprising. Bungie's future became a source of concern when the firm announced it was ending Destiny 2's main story and investing more in Marathon.

But Marathon has yet to demonstrate that the level of player interest or growth required to sustain such a dramatic shift in approach has been reached. Many observers believe the job cuts are most likely due to increased costs over the years, declining Destiny 2 sales, and uncertainty about Bungie's future intentions.

The initial reports came from French journalist Sylvane, who suggested that Bungie should be preparing to lay off many people this summer. Those stories suggest that the status of Destiny 2 and Marathon might affect at least half of the studio’s workforce. Some were skeptical about the claims, but further details from Forbes reporter and Destiny insider Paul Tassi have increased the odds of large job losses.

Tassi said he’s heard statistics that include the commonly publicized 50% estimate, but that no definitive number has been reported as having been chosen. If those claims are true, Bungie would be undergoing one of the biggest reorgs at a major AAA business in recent years. The news has fans anxious again, worrying that Bungie might need to shut down if Marathon doesn’t get a move on. A full closure is less likely than a cut, but many people believe it is an indication of just how terrible the studio's troubles are at the moment.

There were all sorts of ideas about what happened. One of the most controversial stories was that Sony had halted substantial Destiny 2 production because it was unsatisfied with Bungie’s work since it purchased the game.

A report had a strong response to those charges, though. People familiar with the issue believe the decision was not driven by personal animosity or business vengeance, but by a need to make money.

The story goes that Destiny 2 was becoming increasingly expensive to maintain while delivering less and less in return. Maybe Sony decided it wasn’t worth their money to keep pouring a lot of money into the game. Sources suggest that several PlayStation employees were confused over the decision to suspend production on Destiny 2.

But staff misunderstanding should not be interpreted as a sign of how decisions are made at the executive level. The consensus among most insiders is that Sony’s actions are driven by how much money they can make or lose, not by any attempt to punish Bungie or damage the Destiny brand for no reason.

But many fans feel that picking based on money isn't always the best choice, especially given that Destiny is still one of the biggest live-service names in gaming. The number of player activities has only strengthened the criticism of Sony's approach. Steam data demonstrates that Bungie’s two major titles are extremely different from each other.

Apparently, Marathon has had difficulty consistently supporting more than 15,000 concurrent users. There’s a strong community, but the following is still rather tiny. The number of players playing Destiny 2 skyrocketed with the recent update. It was stated that 116,000+ people played simultaneously over 24 hours, a big improvement over Marathon.

Many people assumed that the spike was more than just a curiosity.

Some fans have even logged into Destiny 2 only to prove that the series is still relevant and has a huge following. That gap is why many are pushing Bungie and Sony to alter their plans. Some feel it doesn’t make much sense to pull resources from the greater community when one game frequently attracts 10 times as many gamers as another.

Destiny fans say the series still has a lot of untapped potential, especially in a prospective Destiny 3 that could be a fresh start for both old and new players. Former Bungie community manager Lyanna Ruppert provided significant backstory, noting that many of the studio's troubles predated Sony's acquisition.

Ruppert claims Bungie was already in significant financial trouble before the deal was finalized. The acquisition was effectively an emergency measure that could have saved the company from greater trouble, she added. From that perspective, some of the blame shifts from Sony to Bungie’s own management decisions over the years.

Critics have blamed Destiny 2’s contentious content vaulting system, strong “fear of missing out” mechanisms, and difficulty attracting new players for the long-term drop. Bungie was able to keep its followers coming back, but others believe that the corporation focused too much on keeping existing players happy rather than recruiting new ones. If the comments are accurate, Bungie’s current issues could not be a crisis of Sony’s making but rather the product of years of poor judgment.

Perhaps the most shocking thing about the issue is that the great interest in Destiny 2’s final update reportedly hasn’t impacted Bungie’s immediate plans.

The update’s commercial success hasn’t actually changed the company’s mind, “I’ve been told by insiders,” says Tassi. Asked whether the good outcome benefited Bungie, the reported answer was “No.” The article also indicates that Destiny 2 will receive little future support, and that developers will only step in to fix a major bug that prevents the game from running. There are no plans for continuous material development or a large support staff at this time, according to reports.

If you were hoping that the series would go right into Destiny 3, you are still far away. And with how many resources it takes to build and manage a modern live-service game, large-scale layoffs would make it much tougher to make a new Destiny game. The issues aren’t necessarily with Bungie, but with the live-service gaming sector as a whole.

Producers have struggled for the last decade to figure out how to make continuous online games generate recurring cash. Some titles were enormous hits, but many others struggled to find long-term admirers. Trends in the corporate world indicate corporations are getting more conservative. Several publishers have cut back or discontinued ambitious live-service projects following a series of high-profile failures and rising development costs.

Bungie was one of the top live-service studios in the business — and their current woes are a reminder of how rapidly things can change. But whether Marathon will finally pay off Sony’s investment remains to be seen. What is evident, though, is that Bungie is at a crossroads. One of the biggest corporations in gaming is going through its worst time in years, with reports of hundreds of layoffs on the way, Destiny’s future still in the air, and Marathon still striving for bigger success.