• Former Microsoft executive Laura Fryer says Naughty Dog's decision to cancel The Last of Us Online was "the right call"
• She explains that the studio "made the harder choice" by looking ahead and realizing it wouldn't be able to sustain a live service game
• Fryer also questioned why Naughty Dog greenlit it in the first place, saying, "The ambition was there, but the realistic upfront planning wasn't"

Former Microsoft Game Studios executive producer Laura Fryer thinks the decision to cancel The Last of Us Online was the right decision on Naughty Dog's part, and greenlighting the project was the "real mistake".

Earlier this month, The Last of Us Online game director Vinit Agarwal revealed that the multiplayer spin-off was "almost to 80% completion" and "was very, very close to done" before Naughty Dog pulled the plug in 2023.

At the time of the game's cancellation, the studio renowned for its single-player titles like Uncharted and The Last of Us said it canceled the project because it didn't want to "become a solely live service games studio".

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Agarwal, who shared that he worked on the game for seven years, learned about its cancellation 24 hours before the public, and that Naughty Dog decided to focus on its main single-player narrative game, Intergalactic: The Heretic Prophet, instead of diverting resources to an online title.

According to Laura Fryer, despite how devastating the cancellation was for the team and "soul crushing" as Agarwal described, this was "the right call".

"A lot of people are saying they should have just finished the game and shipped it because it was so close, and I understand how frustrating it must be for the players who were looking forward to the game," Fryer said in a new YouTube video.

"But I think that's missing the bigger picture because the truth is that this is a classic example of the sunk cost fallacy, and I've seen it play out many times before where you have a studio that's already spent many years and millions of and they feel like they have to ship the game anyway, that they have no choice, even when they know the long-term live service support will be brutal."

Fryter continued, saying Naughty Dog didn't do this and "made the harder choice" by looking ahead and realizing it wouldn't be able to sustain a multiplayer game and risk turning the single-player studio into a live service operation only able to support one game for years to come.

"In my opinion, that was the right call," she said. "Even though it hurt the team that worked so hard on it, they chose to go back to what the bread and butter of their studio was, single-player narrative games."

The former Xbox executive also questioned why Naughty Dog decided to start the project in the first place, calling the live service model "an infinite treadmill" for studios working on these types of games.

"Any studio leader could have run the numbers on what a team [of] Naughty Dog's size could realistically support," Fryer continued. "They could have seen pretty clearly that a team the size of Naughty Dog could never support a live service game and all of their amazing cinematic single player games. It wasn't possible. But instead of doing that analysis, they went ahead and let the game go forward. They let it run for 7 years."

Following The Last of Us Online's cancellation, former PlayStation executive Shuhei Yoshida revealed that feedback from Destiny developer Bungie played a part in the decision, and Naughty Dog realized they couldn't support it alongside their single-player projects.

Fryer remarks that this was the "core issue" from the start, saying, "The ambition was there, but the realistic upfront planning wasn't."

"Naughty Dog ultimately protected what they do best, good cinematic single player games. That's good leadership, even when it hurts," she added. "And sometimes the bravest thing a studio can do is to admit that something isn't going to work before it drags the whole company down with it."

She continued, explaining that while fans can be disappointed and she understands the pain of the development team, "pulling the plug, that was not the real mistake."

"The real mistake was in greenlighting this experiment in the first place without doing the homework up front. That's my take," Fryer said.

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Demi is a freelance games journalist who helps cover gaming news at TechRadar. She's been a games writer for five years and has written for outlets such as GameSpot, NME, and GamesRadar, covering news, features, and reviews. Outside of writing, she plays a lot of RPGs and talks far too much about Star Wars on X.