Bluepoint Games Closure Reveals Deep Flaws in Sony and Microsoft's Console Strategy
The shutdown of Bluepoint Games in February 2026 represents another devastating consequence of Sony's aggressive acquisition strategy, which has resulted in multiple studio closures, widespread layoffs, and numerous cancelled game projects. This current console generation has been characterized by unfulfilled promises, with few titles truly leveraging the advanced hardware capabilities of the PlayStation 5 and Xbox Series X/S, alongside disappointing output from both Sony and Microsoft's first-party studios.
The Acquisition Arms Race Begins
The foundation for this industry-wide failure was established during the previous console generation when Microsoft initiated a wave of acquisitions to strengthen its limited first-party portfolio. Starting in 2018, Microsoft purchased Compulsion Games, Ninja Theory, Obsidian Entertainment, InXile Entertainment, Playground Games, and several other studios, followed by acquisitions of Double Fine, ZeniMax Media (including Bethesda), and eventually Activision Blizzard.
This acquisition frenzy, which was mirrored by Embracer Group, triggered a competitive response from Sony. Since 2018, Sony has acquired Insomniac Games, Housemarque, Bungie, Firesprite, and other studios, many of which were intended to help the company achieve success in the live service gaming market.
Sony's Live Service Pursuit Proves Disastrous
As industry observers now recognize, this chase for live service dominance has been catastrophic. While Sony-published Helldivers 2 achieved commercial success, its developer Arrowhead remains independent. Internally developed live service projects have faced significant challenges: Concord was shut down after just two weeks, Fairgame$ and Marathon have experienced substantial delays, while other projects including a Twisted Metal live service game and The Last Of Us Online were cancelled entirely.
Bluepoint Games, which was developing a God Of War live service project before its cancellation last year, has become the latest victim of this acquisition-to-mismanagement pipeline. The studio represents the third recently-acquired developer to be closed by Sony over the past two years, following Neon Koi and Firewalk Studios, the developer behind the failed Concord.
Sony's Troubled Acquisition Portfolio
The Bluepoint closure exemplifies how Sony has mishandled many of its recent studio acquisitions. While exceptions exist, most notably Insomniac Games, several acquired studios have yet to release a single game under Sony ownership, including Firesprite, Valkyrie Entertainment, and Haven Studios. Other studios, like Bungie, have undergone significant transformations through widespread layoffs.
Sony's recent studio acquisitions include:
- Firesprite - Acquired in 2021, shipped Horizon Call Of The Mountain for PSVR2 in 2023, but faced layoffs in 2024
- Haven Studios - Acquired in 2022, no game shipped yet, working on delayed live service shooter Fairgame$
- Housemarque - Acquired in 2021 following Returnal launch, new game Saros set for April release
- Insomniac Games - Acquired in 2019, launched Ratchet & Clank: Rift Apart and Marvel's Spider-Man 2, with Marvel's Wolverine coming later this year
- Bluepoint Games - Acquired in 2021, last shipped Demon's Souls in 2020, closed in 2026
- Bungie - Acquired in 2022, hit with layoffs and substantial changes in 2024, Marathon launching in March
Broader Studio Shutdowns Across Sony's Portfolio
Beyond its recent acquisitions, Sony has shut down several other studios during this console generation, including London Studio, VR-focused Manchester Studio, Japan Studio, and PixelOpus, the team behind Concrete Genie and Entwined. Additionally, many established Sony studios—including Naughty Dog, Bend Studio, and Media Molecule—haven't released a new, non-remake game in over five years.
The devastating impact of this acquisition strategy and pursuit of live service success shows no signs of slowing. Guerrilla Games continues development on a Horizon multiplayer title, while the long-delayed Fairgame$ remains in production at Haven Studios despite widespread gamer apathy.
Microsoft's Parallel Studio Management Issues
Microsoft has demonstrated similar brutality regarding studio shutdowns and layoffs, despite not pursuing live service games with the same intensity as Sony. Over recent years, Xbox has closed numerous studios, including The Initiative, Arkane Austin, Tango Gameworks (before being reconstituted by Krafton), Alpha Dog, and Roundhouse Games.
The company has also cancelled multiple major projects, including Rare's Everwild, ZeniMax's Blackbird, Perfect Dark, Contraband, and others. Beyond Sony and Microsoft, Embracer Group has rapidly acquired and shut down studios, with Square Enix Montréal, Volition, Pieces Interactive, and Free Radical Design among those lost in recent years.
A Stunted Console Generation
Collectively, these corporate strategies have contributed to what industry observers describe as a stunted console generation, where corporate greed and leadership failures have inflicted irreparable damage on the gaming industry. The closure of Bluepoint Games serves as a stark reminder of how acquisition sprees by major platform holders have failed to deliver meaningful benefits to gamers while devastating development studios and creative talent across the industry.
The current console generation, once heralded for its technological advancements, has instead become defined by unfulfilled potential, cancelled projects, and the human cost of corporate consolidation. As both Sony and Microsoft continue their acquisition strategies, the gaming community watches with concern, wondering which studio might become the next casualty in this ongoing industry transformation.
