Naughty Dog’s Scrapped The Last of Us Online Spin-Off Allegedly Cost Sony Millions

PlayStation’s ongoing push into live-service games appears to have come at a steep cost, and a newly discussed internal development timeline suggests one of Sony’s biggest misfires may have been the scrapped online spin-off of The Last of Us—a project that, in at least one account, was backed by “hundreds of millions” before it was canceled.

What’s being claimed about Naughty Dog’s development priorities

Jason Schreier discussed the collapse of Sony’s live-service plans in a recent video appearance, arguing that The Last of Us: Factions was not a minor side effort. Instead, the claim is that most of Naughty Dog’s work was tied to the online The Last of Us initiative, and only later shifted toward Intergalactic: The Heretic Prophet.

1. Players and observers reportedly treated Factions as a “classic spin-off” concept—developed by a smaller group while Naughty Dog focused on a larger project.

2. Schreier disputes that framing, saying the larger portion of staff was working on the online The Last of Us project, with the studio’s workforce structure changing only after the online work was shut down.

3. After Factions was canceled, most of the Naughty Dog team moved to work on Intergalactic: The Heretic Prophet.

4. Schreier adds that many staff members were occupied with The Last of Us Online and with remasters/remakes during the period that followed, helping explain why Naughty Dog did not deliver a wholly new game for years in the PlayStation 5 era.

Why the PS5 era looked unusually quiet

From the PS5 launch onward, Naughty Dog released remastered versions of The Last of Us, which fans largely viewed as disappointing given how central the studio is to PlayStation’s first-party lineup. Even after Intergalactic was announced, Schreier’s account suggests the project may have lacked the staffing momentum that would normally be expected for a near-term release.

In the account being discussed, Intergalactic remained a “major absence” at major Sony showcases for an extended stretch after its reveal, with players left waiting for substantial updates rather than new gameplay or clear development milestones.

The live-service budget claim tied to the cancellation

A key part of the discussion centers on the financial scale of the canceled online project. Schreier’s remarks include the claim that Sony was set to spend “hundreds of millions of dollars” on the online The Last of Us initiative before it was abandoned.

In that same narrative, Factions was reportedly dropped toward the end of 2023. After that, Intergalactic would have needed to ramp up quickly enough to be ready for the next console cycle—at latest in time for a launch window tied to the following generation.

Because these statements are presented as non-confirmed reporting, the discussion also emphasizes caution: even when Schreier is usually accurate, it’s still best to treat such details carefully until verified. Still, the broader takeaway is that Sony’s live-service push—and the cancellations that followed—appears to have disrupted internal development schedules at major studios.

Timeline recap

1. During Sony’s PS5 era, Naughty Dog’s output is described as focused on remasters/remakes rather than brand-new entries.

2. Schreier’s account says most staff were assigned to the online The Last of Us effort until that project was canceled.

3. After the online project was canceled near the end of 2023, most of the team reportedly transitioned to Intergalactic: The Heretic Prophet.

4. Intergalactic then faced a long period of limited visibility before players received more information as development continued.