The live-service gaming model is showing signs of a serious contraction, with major publishers cancelling projects and player engagement plummeting across the industry. By the end of January, 15 of the 19 major new live-service games launched in 2025 had lost over 80% of their initial playerbase, according to industry data. The decline spans recognizable franchises including Persona 5: The Phantom X, Runescape: Dragonwilds, and Dune: Awakening.
The downturn marks a sharp reversal from the late 2010s, when the model appeared to be the industry's inevitable future. Bethesda's 2018 unveiling of Fallout 76 signaled to many observers that established franchises would increasingly be transformed into persistent online experiences with seasonal content updates. Eight years later, that trajectory has stalled dramatically.
Sega learned this lesson firsthand after weak performance from its free-to-play push, including the mobile battle royale Sonic Rumble Party, led the company to cancel its mysterious «Super Game» project. PlayStation has faced similar challenges. According to a recent Bloomberg report, the company has either halted or outright cancelled development of over a dozen live-service games over the past decade, many tied to marquee properties like Spider-Man and God of War.
The most recent example is Horizon Hunters Gathering, which has been rebooted with the aim of essentially «unmaking» its live-service aspects and converting it into a traditional cooperative game. This determination to make the model work for Horizon means a new entry in the series' core single-player line is reportedly still years away from release.
Naughty Dog experienced comparable difficulties. Years spent on the ill-fated The Last of Us Online slowed progress on its next major cinematic narrative game, Intergalactic: The Heretic Prophet. The multiplayer project was ultimately cancelled to prevent Naughty Dog from transforming into a live-service studio, with the majority of its developers moved onto Intergalactic to enable full-scale production.
Even established heavyweights are feeling the squeeze. Newzoo's latest gaming report showed a 27% decline in the battle royale sub-genre, with Fortnite and Apex Legends both suffering a drop in playtime growth of almost a quarter. Despite Marvel Rivals' immense success, many top shooters saw a drop-off of at least 15%, including Overwatch, Call of Duty, and Valorant.
More broadly, the free-to-play model itself is in decline. Playtime on PC fell 8%, PlayStation dropped 4%, and Xbox declined 11% in 2025 compared to 2024. While these are modest drops, industry observers warn they could signal the beginning of a larger trend.
Ex-BioWare executive producer Mark Darrah, who helped guide the ill-fated Anthem to completion, believes publishers are finally recognizing that the gold rush is over. «I think there's a glimmer of understanding that if you're making a looter shooter and it'll be a 'decent' looter shooter, that's not enough anymore,» he said.
Starr Long, original director of MMORPG pioneer Ultima Online, points to a fundamental trust problem. «Enough games have been cancelled and shut down, so at this point people have a trust issue,» he said. «Players are asking 'Why should I commit myself?' That betrayal has long-term ramifications.»
For publishers, part of the appeal of live-service games lies in their measurable metrics. Darrah noted that companies can predict a player's individual financial input based on minute actions, with first-day behavior informing how much money someone may be willing to spend. But if players log off and never return, that number becomes zero.
The question now facing the industry is whether this contraction represents a permanent shift away from the live-service model or simply a painful correction. Some observers challenge the assertion that live-service is disappearing at all, pointing to continued success stories. Others see the downturn as cause for concern about the industry's broader revenue growth, which has been fueled by the battle pass era.
What remains clear is that leveraging known, beloved intellectual property is no longer a guaranteed ticket to success. As developers and publishers reassess their strategies, the coming years will reveal whether the live-service model can adapt to a more skeptical player base or whether the era of «forever games» is truly beginning to end.