Sony is writing down $766 million against Bungie, the studio it bought for $3.6 billion in 2022. Both Destiny 2 and the unreleased Marathon are underperforming, marking another failed bet on the live service gaming model that's supposed to be the industry's future.

Let's talk about platform economics. The live service model promises recurring revenue instead of one-time purchases. Players stick around for years. Microtransactions add up. If you get it right, you print money. Fortnite prints money. League of Legends prints money. Genshin Impact prints money.

The problem is that the model only works for a handful of mega-hits. It's the Netflix problem applied to gaming: infinite content competing for finite player attention. You can't casually play three live service games. They're designed to be your main game, demanding daily engagement and FOMO-driven events.

Sony's $766 million writedown represents roughly 21% of what they paid for Bungie just three years ago. That's a massive depreciation in a very short time. The company bet that Bungie's expertise in building live service hits would transfer — that the studio behind Halo and Destiny had cracked the formula.

But Destiny 2 is aging. Player counts are down. The content pipeline hasn't kept pace with player expectations. And Marathon, which was supposed to be Bungie's next big thing, is apparently not meeting internal targets even before launch.

This matters beyond Sony's bottom line. Every major publisher is chasing live service revenue. EA, Ubisoft, Warner Bros., Microsoft — they're all pushing their studios to build games-as-a-service instead of traditional single-player experiences. But the market can only support so many.

The math doesn't work. If players have 10-15 hours a week for gaming, and live service games demand 10+ hours weekly to keep up, you can realistically play one, maybe two. The market isn't growing fast enough to support the number of live service titles being greenlit.

Bungie isn't a bad studio. Destiny was genuinely innovative. They know how to make good games. But good isn't enough in live service. You need to be a cultural phenomenon that captures and holds player attention against infinite competition.

The technology is impressive. The production values are high. The question is whether the live service model is sustainable for anyone except the top 5-10 games that have already captured their audiences. Sony just paid $3.6 billion to learn that it probably isn't.