Sony Incurs $204.5 Million Impairment Charge After Destiny 2 Sales Do Not Meet Expectations
Sony announced in its most recent second quarter financial results that it took out a $204.5 million impairment charge against Bungie due to poor sales of Destiny 2.
In its report Sony notes that it recorded “impairment loses against a portion of Bungie, Inc.’s intangible and other assets in connection with Destiny 2” that totaled 31.5 billion yen, which converts to around $204.5 million.
As for why it took out the impairment, the company explained, “Regarding Destiny 2, partially due to changes in the competitive environment, the level of sales and user engagement have not reached the expectations we had at the time of the acquisition of Bungie, Inc.”
“While we will continue to make improvements, we downwardly revised the business projection for the time being and recorded an impairment loss against a portion of the assets at Bungie,” the company added.
The company’s history since being acquired by Sony in 2022 has been rough. In 2023, Bungie CEO Pete Parsons announced significant layoffs at the company. He posted on X, “Today is a sad day at Bungie as we say goodbye to colleagues who have all made a significant impact on our studio. What these exceptional individuals have contributed to our games and Bungie culture has been enormous and will continue to be a part of Bungie long into the future.”
Games Industry reported that around 100 people were laid off, which was about 8% of its entire workforce at the time. Additionally, the outlet noted that the company’s revenue was 45% below projections.
A little less than a year later and Bungie went through another round of layoffs. At the end of July 2024, the company announced it was cutting its workforce by 17% or around 220 individuals. On top of laying off these 220 individuals, the company also relocated 155 people to other departments within Sony Interactive Entertainment. Additionally, it spun off an incubation project into its own studio. Reports indicated that included 75 people.
Parsons said in a blog post, “Due to rising costs of development and industry shifts as well as enduring economic conditions, it has become clear that we need to make substantial changes to our cost structure and focus development efforts entirely on Destiny and Marathon. “
Destiny 2 hit a peak concurrent player count on Steam of 316,750 back in February 2023 when Lightfall released. The game would get close to that mark in June 2024 with the release of Season 24 Echoes. However, since then the concurrent player counts plummeted. The most recent 24-hour peak was only 13,497. In fact, SteamDB reports the average peak player count in the last 30 days is the lowers it has ever been at 13,443.
Recent reviews for the game are also “mostly negative” on Steam.
Additionally, the Woke Content Detector Steam curator recommends against the game because it “contains overtly pro-LGBTQ+ messaging. Features multiple LGBTQ+ characters, including multiple trans characters.”
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FYI:
An impairment charge is an accounting expense recorded by a company to signify an unexpected, permanent reduction in the recoverable value of one of its assets. This occurs when the asset's "carrying value" (its value as recorded on the balance sheet) is greater than its current "fair market value" or the future cash flow it is expected to generate
Its RARE a game can go as long as Destiny 2 has. Its really time for them to work on a DESTINY 3 if the goal to continue DESTINY as an IP. You can keep adding on and renovating to but an extent before it comes time to tear down and rebuild anew and this is where DESTINY is at IMHO. Why they seem insistent on not going that route is truly puzzling.