The Last of Us Online Was Cancelled 24 Hours Before Its Announcement

Nearly three years removed from its surprising cancellation, details are emerging from The Last of Us Online‘s director Vinit Agarwal, shedding light on the decision.

The cancellation move (announced in December 2023) was made to refocus Naughty Dog’s vision on single-player titles. The cancellation post said development of The Last of Us Online was “severely impacting development on future single-player games,” and the studio said it had a choice of two paths: “become a solely live service games studio or continue to focus on single-player narrative games that have defined Naughty Dog’s heritage,” and they elected the latter. In 2025, ex-PS Studios boss Shuhei Yoshida revealed that he had a chance to play The Last of Us Online, and “it was great”.

Nearly three years later, the director of The Last of Us Online, Vinit Agarwal, who has since left Naughty Dog and moved to Japan to found a new studio, sat down for a lengthy interview on the Lance E. Lee podcast to talk about his life and career, and the cancellation of what was then known as Factions. Agarwal reminisced about the boom in the gaming industry during the pandemic in 2020, noting that online games experienced a significant boost. This is when he said Sony “decided to put a lot of money into online gaming,” like everyone else. However, the forecasted gains didn’t stay when society went back to normal, and when spending on online gaming dwindled, so did publisher interest.

Agarwal explains that at one point, a decision had to be made between making The Last of Us Online or the next game Neil Druckmann was directing, who was the acting president of the company. Like the cancellation post in 2023, Agarwal reiterated Naughty Dog went with the “bread and butter” of the studio over an experimental game, which, unfortunately, couldn’t see the light of day. Agarwal says, “That was a devastating moment for me because I spent seven years working on that game, and it was soul-crushing. I remember honestly finding out that it was getting cancelled 24 hours before it was announced to the public.” The Last of Us Online was reportedly 80 per cent finished by the time of cancellation.

For now, Naughty Dog is hard at work on Intergalactic: The Heretic Prophet, while director Neil Druckmann is still teasing potential additions to The Last of Us on Instagram, so it’s still possible there’s more The Last of Us (not the TV series) left in the pipeline.