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Otter said:

Likely pitching/protoyping games that were getting rejected + acting as a support studio.

One thing about about good management is that it would prevent this sort of situations from happening through smaller projects to balance books (i.e like a  remaster/maybe bloodborne)

An issue I had with Sony and their management of Japan studios is that they never really led the studios towards an intended goal or outcome of game. I think Japan studios was super talented but they needed a more hands on approach the same way Nintendo does for many of its internal teams.

Bluepoint had no other project lined up after Demon's Souls though. Sony didn't acquire them until mid 2021. They literally could've done a new IP without it having to be approved by Sony when they were independent. They didn't have anything in the works until they pitched live service GOW in 2023. I literally don't know any other studio that would have a development gap like that, independent or not. They would've shut down much quicker without Sony in this scenario. 

Although I would argue this is where Sony should've stepped in earlier and force them to work on select IP. But that again could've demoralized the team if they were adamant about expanding away from doing remakes. And perhaps that's why Bluepoint was ultimately shut down.