Xbox Co-Founder Praises The Last of Us Online Cancellation
Microsoft Game Studios co-founder Laura Fryer has publicly stated that the cancellation of The Last of Us Online project was ultimately the right decision. In a recent video, Fryer expressed sympathy for the development team at Naughty Dog while also criticizing the overall handling of the project. With extensive experience overseeing numerous game projects, she noted that typical multiplayer games require significant planning during early production stages. Fryer praised Naughty Dog for not falling into the “sunk cost” fallacy despite investing substantial resources before canceling the project.
Fryer explained that many people believe projects nearing completion should be finished and released, and she understands players’ disappointment. However, she argued this perspective overlooks the bigger picture. Many studios invest years and millions of dollars before feeling compelled to release games even when they know supporting a live service title long-term is challenging. The result is often rushed launches, exhausted teams struggling with endless updates, and ultimately poor project outcomes. Naughty Dog made the difficult but correct choice by looking ahead and realizing continued development could turn the entire studio into a service-game operation supporting just one major title.
Fryer’s criticism was primarily directed at Naughty Dog’s leadership. She believes the project should never have been approved in the first place, questioning the lack of planning and analysis that led to a seven-year development cycle ending in cancellation. She stated that live service games aren’t mysterious, with plenty of data available for reference, and new content updates represent an endless cycle. Given Naughty Dog’s team size, they couldn’t simultaneously manage a live service game and create excellent single-player experiences, yet leadership allowed the project to proceed for seven years without proper analysis.
It wasn’t until 2023 when Bungie was invited to analyze the project that people realized the severity of the issues, with player retention and actual investment concerns highlighted. Former project director Vinit Agarwal reportedly had deep emotional attachment to the project, calling its cancellation devastating and heartbreaking after seven years of work. Former Sony Interactive Entertainment Worldwide Studios president Shuhei Yoshida has also expressed reservations about Sony’s push toward live service games. While the cancellation disappointed many, Fryer’s analysis suggests Naughty Dog ultimately made the strategic decision to return to their core strength of single-player narrative games, which could benefit the studio’s long-term creative direction.
