A Near-Finished Game, Pulled Overnight
Vinit Agarwal says he learned The Last of Us Online was canceled just 24 hours before the public did — after nearly seven years of work and with the project "almost to 80% completion." Speaking on the Lance E. Lee Podcast from Tokyo, the former Naughty Dog game director called the decision "devastating" and "soul crushing," adding, "It killed me that people couldn't play it."
Agarwal joined Naughty Dog in 2014 and led the studio’s multiplayer spinoff from 2016 until production was shut down in late 2023. Naughty Dog announced the cancelation that December, explaining the game would have required the studio to pour resources into post-launch support for years, which "would have severely impacted" its ability to make future single-player games — including what we now know as Intergalactic: The Heretic Prophet.
"I was the director of the game, and to find out that it was getting cancelled 24 hours before it was announced to the public — that's how I found out about the game getting cancelled," Agarwal said. "They had to do that because they had to control the messaging."
COVID Boom, Live-Service Bust
According to Agarwal, the project’s trajectory mirrored the industry’s whiplash during and after COVID lockdowns. "In 2020, money was flooding into the game industry because people were playing a lot more games all of a sudden," he said. Online titles saw a "huge boon" as players sought ways to connect from home, and Sony — like many publishers — pushed hard into live service. That funding helped get The Last of Us Online off the ground, and internally the multiplayer was "doing really, really well."
Then the tide went out. As offices reopened and spending cooled in 2022 and 2023, companies pulled back. "They overspent basically. They were overzealous," Agarwal said, describing how the same forces that inflated budgets forced a contraction later. Amid that reassessment, Sony scaled down its live-service ambitions, and the multiplayer TLOU became a casualty.