No one saw this coming

How do you figure that? Concord had zero return on investment. Spiderman 2 had 315m budget but sold a ton of copies. Concord barely sold anything and Sony refunded the few sales it did have.

Sephiran is talking about general budgets, beyond Concord. 

Return on investment isn't budget.

A $200 million game is cheaper than a $300 million game, even if it ends up being less profitable. 

that makes me sick…$200m is now cheap by Sony standards? I feel like Nintendo doesn’t even spend that amount when combining all their first-party release for any given year.

Hopefully devs and publishers get the message that we don't want trash like this.

I think the answer is because A and AA budget games are struggling in the marketplace and have been doing so for a good few years now. Even indie developers are struggling to get any exposure at all because of just how much content there is. 

I don't think we can look back at what Sony was doing 10, 20 years ago because the marketplace was different, budgets were different. Games like Flower, PaRappa and Gravity Rush could more easily see a ROI, something which is less likely now. I hope it's not lost on you that Studio Japan was closed down because of their inability to consistently make money on the games they were making.  Their failures didn't turn into success stories because they were kept around to make more games. 

When we're talking about a $200m budget, of course things are going to be more cut-throat: if Concord is completely dropped, how long and with what budget does it take for Firewalk to make a new game? Another 4-5 years? Another $150-$200m?

Wholeheartedly agree with this statement.

Whether it was the intention of not, the continued dogpiling of a game and the continued hope that it bombs because it was not a game you wanted (hence a game you most likely didn't even bother to play/ interact with it) is really no different to hoping devs lose their jobs, or at best shows a complete lack of concern of the part of devs. 

 $200m is cheap relative to $315m, not that $200m is cheap in general for Sony. 

Considering how many successful live service games there are and continue to be made, this is highly unlikely.

I keep seeing the sentiment that the market is not ready for smaller games, but I see no actual backing for this. Actually the grounds were never better for smaller titles ever before. That is the reason we see more than 10K titles released in a year on Steam, numbers that were absolutely unthinkable 10 or 20 years ago. Obviously not everything is a success, but that was the case 10 or 20 years ago as well, you just never have a guarantee for anything. But the market can now sustain so many smaller titles which is amazing. There are whole niches that generates a lot of titles each year, because the devs can stay afloat.

I think this "there is no place for A and AA" stuff is a misguided narrative to support the absolution of risky AAA titles. But that model is unsustainable.  Gamers, consumers or people on the internet also have no influence over anyone getting fired. That is on the publishers. Blaming the customers or posters on the internet feels like icky whitewashing of the roles of the publishers. The reason they don't support AA anymore is not that there is no ROI for them, the reason is the publishers all only want Fortnite level of ROI, and that they will not get this with an AA title. But not everything can be a Fortnite level success, so studios get closed with no room for failure. Like the room that existed for many others.

So the closing of Firewalk is on Sony. They got greedy, they wanted in into the big Live Service money, but that means risk it in an all or nothing gamble. And if they land on nothing, than it isn't the managers that get laid off, but the dev team. Which means teams are unable to grow on their experiences and failures. They have to kick it out of the park instantly, or they lose their job. No wonder so many going indie. Thats also not easy, but not as cold as this corporate bullshit.

Smaller games like Granblue Fantasy Relink and Stellar Blade the devs were happy to hit 1 million. So they were a success. Several smaller games are doing well.

I don't think the high number of content is automatically a good thing. How many of these games are seeing a sizeable enough audience. How many are making an ROI?

Games are being made because there's obviously money to be made, but at the same time visibility is a major issue when there's so much stuff coming out. And if you aren't getting that visibility, then that's an issue. 

There's also the question of services like GamePass and PS+, the general prices of games, and how these ultimately play into how ppl spend money. 

Perhaps there's something I've missed about AA games. But I don't think the evidence proves that AA gaming is striving as a whole market, but I'll concede there's probably not a lot suggesting otherwise. 

This year has been an anomaly with all its failed, big-budget releases. Let's at least hope that the industry learned something from it all (unlikely).