The Last of Us Online Was Reportedly 80% Complete Before Naughty Dog Pulled the Plug
The Last of Us Online, the multiplayer project many players still refer to as Factions, may have been far closer to release than most fans ever realized. In a recent appearance on the Lance E. Lee Podcast from Tokyo, former Naughty Dog game director Vinit Agarwal said the project was “almost 80% complete” and “very very close to done” before it was canceled, adding a painful new layer to one of PlayStation’s most infamous live service casualties. His comments also line up with the public cancellation timeline, as Naughty Dog officially confirmed in December 2023 that it had stopped development on The Last of Us Online.
According to Agarwal, the project had actually been in development since 2016, but it gained more momentum during and after the pandemic period, when the wider games industry saw online titles become a much bigger strategic priority. He explained that Sony, like many major publishers, leaned harder into multiplayer and live service during that era, which gave the project more support internally. That context fits the broader public story around PlayStation’s aggressive live service push under former leadership, a strategy that ultimately produced multiple cancellations across Sony’s portfolio.
What makes Agarwal’s account especially striking is how blunt he was about why the game did not survive. He said Naughty Dog ultimately had to choose between continuing The Last of Us Online or putting full weight behind the new single player project being directed by studio president Neil Druckmann, now known as Intergalactic: The Heretic Prophet. In that framing, The Last of Us Online was not canceled because it had no progress or no internal promise. It was canceled because Naughty Dog decided its future still had to revolve around the kind of prestige single player experiences that define the studio’s identity.
That explanation also matches what Naughty Dog publicly said when it canceled the game. In its 2023 statement, the studio admitted that in order to support The Last of Us Online as a long term live service title, it would have needed to commit most of its development resources for years to come. Naughty Dog said making that choice would have prevented it from continuing work on future single player games, and that tension is clearly at the center of what Agarwal is now describing from the inside.
The personal side of the story is just as significant. Agarwal said he learned the game was being canceled only 24 hours before the public announcement, calling the moment devastating after years of work. That experience ultimately pushed him to leave Naughty Dog and start a new studio in Japan with fellow former Naughty Dog developer Joe Pettinati. Reporting from 2025 confirms the pair are now building a new cinematic multiplayer project, giving Agarwal a second shot at exploring ideas that clearly mattered deeply to him.
From an industry perspective, this is one of the clearest examples yet of how the live service gold rush reshaped studio priorities and then collapsed back on itself. The Last of Us Online appears to have been caught right in the middle of that pivot. It was born early enough to grow into something substantial, backed heavily enough to approach the finish line, and then canceled late enough to become a symbol of how unstable that strategy really was. For PlayStation fans, that is the hardest part of the story. This was not a prototype that never found its form. By Agarwal’s account, it was a game that nearly made it out the door.
What do you think, did PlayStation make the right call by protecting Naughty Dog’s single player future, or is The Last of Us Online one of the biggest missed opportunities of the generation?
