The Last of Us Online’s Cancellation Was a Good Decision, Says Microsoft Game Studios Co-Founder

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After the cancellation of The Last of Us Online, Laura Fryer, a co-founder of Microsoft Game Studios, shared her thoughts on the situation. While she felt for the development team who had their work ultimately scrapped, she also expressed criticism regarding how the project was managed overall.

As a long-time gamer, I’ve always thought making multiplayer games is incredibly complicated, and it sounds like a ton of upfront planning is essential. I really respect Naughty Dog for making the tough call to cancel their project, even after putting so much money into it. It’s smart to avoid the ‘sunk cost’ trap – just because you’ve invested a lot doesn’t mean you should keep going if it’s not working!

Fryer explained that while many people believe the game should have been released as it was, understanding the situation requires looking at the bigger picture. He described it as a classic example of the ‘sunk cost fallacy’ – the tendency to continue investing in something simply because you’ve already invested so much time and money, even when it’s clear it’s not going to be successful. He’s seen this happen often: studios feel obligated to release a game after years of development and significant financial investment, despite knowing ongoing support will be difficult. This often results in a rushed, incomplete game, team burnout, and ultimately, failure.

Naughty Dog made a difficult but smart decision. Instead of trying to constantly update one game for years – a model known as ‘live service’ – they chose to focus on what they do best: creating strong, story-driven, single-player games. It was a tough choice, especially for the team who put so much work into the cancelled project, but ultimately, it was the right one for the studio’s future.

Neil Druckmann received criticism from Kim Frater regarding Naughty Dog’s continued investment in the live-service game. Frater feels the project never should have been started, pointing to a lack of initial planning and research that resulted in a seven-year development cycle ending in its cancellation.

She wondered why the developers even started this game, questioning the lack of foresight. Live service games aren’t unpredictable; there’s ample data available to understand the demands of the format – constantly adding new maps, modes, weapons, seasons, and balance updates. It’s a never-ending cycle. A leader at any studio could have realistically assessed what a team the size of Naughty Dog could handle. It should have been clear that the team couldn’t simultaneously maintain a live service game and continue creating their high-quality, story-driven single-player experiences. It simply wasn’t feasible.

Rather than investigate these issues early on, the game continued running for seven years. It wasn’t until 2023, when Bungie conducted an analysis of player retention and the factors driving it, that people finally acknowledged there was a significant problem.

Vinit Agarwal, the project’s former director, has often expressed his positive feelings about it, and shared how upset he was when it was ultimately cancelled. He described the cancellation as a deeply disappointing experience, noting he’d dedicated seven years to the game and found it incredibly disheartening. Shuhei Yoshida, a former PlayStation executive, has also talked about PlayStation’s shift towards live-service games, admitting he wasn’t entirely comfortable with that direction.

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2026-04-13 19:12