01 · Briefing · what happened

Tencent spent six years chasing GTA, and hit a wall made of people

Gaming 2 min 13 sources

A giant with hundreds of millions could not build a rival to Grand Theft Auto - because the thing it was up against was not a game but a crowd.

6 yrs

spent chasing GTA

and hundreds of millions, by Bloomberg

~80

jobs cut

at Lightspeed LA as the game was rebooted

$55bn

EA taken private

deal closed Tuesday

$38.6M

EA CEO's pay

after Battlefield 6 devs were laid off

At a glance

Tencent spent six years and hundreds of millions building Last Sentinel, a rival to Grand Theft Auto.
After an internal review, the studio Lightspeed LA cut about 80 jobs and rebooted the project.
The game never showed real gameplay in three years, since its 2023 reveal.
GTA's moat is not its graphics - it is GTA Online's entrenched crowd.
For a game that lives online, its value to each player is the presence of all the others.
A rival launches into an empty lobby, and an empty online world has nothing to offer.
Money buys a studio and an engine; it cannot buy the crowd, and the crowd is the game.

Forces in play

Incumbent's moat High

GTA's entrenched online crowd

Challenger spending Easing

Tencent pulled back after six years

Industry consolidation Building

EA private, layoffs across studios

Studio job security High

cuts at Lightspeed, Refactor, EA

In play Tencent / Lightspeed LA — spent six years on the failed GTA rival Rockstar / Grand Theft Auto — the incumbent nobody can dislodge Electronic Arts — taken private in a $55bn deal Arrowhead's Shams Jorjani — called the EA deal 'consolidation, no question'

How it unfolded

2023 Last Sentinel revealed at the Game Awards
6 years Tencent pours in hundreds of millions
This week internal review, ~80 jobs cut, project rebooted
Tuesday EA's $55bn take-private closes

Full briefing

The wall that swallowed six years

For six years, the Chinese giant Tencent tried to build its own Grand Theft Auto. This week, Bloomberg reported that it failed. [1]

The game was Last Sentinel, a sci-fi, open-world action title set in a future Tokyo. It came from Lightspeed LA, a California studio staffed with former Rockstar developers - the people who make GTA. [2] It got a glossy trailer at the 2023 Game Awards, then showed no real gameplay in the three years since. [2]

An internal review found the game was not living up to expectations. The studio cut about 80 jobs and put the project into what it called a “creative shift.” [3][4] Tencent had spent hundreds of millions of dollars, by Bloomberg’s account. [1] That is eighty people out of work on a game that may never ship.

The thing it was really up against

Rockstar’s craft is hard to match. But GTA’s deeper strength is not its map or its missions. It is GTA Online, home to one of the biggest player communities in gaming, where people’s friends, crews, and years of progress already live. A new online game launches into an empty lobby. That is a harder wall than any budget can knock down.

An industry folding inward

Last Sentinel is one piece of a bigger week. On Tuesday, Electronic Arts finished going private in a $55 billion deal led by Saudi Arabia’s Public Investment Fund, Silver Lake, and Jared Kushner’s Affinity Partners. [5][6] The maker of Helldivers 2, Arrowhead’s Shams Jorjani, called the deal “consolidation, no question,” and worried it would push EA toward safe sequels. [7]

The same week, EA disclosed that its chief executive, Andrew Wilson, was awarded $38.6 million for the year, an $8 million raise. [8] The reward followed Battlefield 6 becoming the best-selling game of 2025, with more than seven million copies sold in three days. [9] The developers who built Battlefield 6 had been laid off months earlier. [9]

The cuts kept coming elsewhere. Refactor Games, the studio Netflix hired to build its FIFA World Cup game, laid off about 85% of its staff and was effectively shut by its parent, Delphi Interactive. [10][11] Microsoft’s Xbox division, mid-”reset,” reported revenue down 10%, even as the wider company’s cloud business soared. [12]

When the crowd leaves

The Tencent story has a quiet echo. This week the Guardian wrote about players mourning online games that shut down - worlds that die because the servers cost money and the crowd thins out. [13] It is the same force from the other side. An online game is only as alive as its players. Gather enough of them and it grows on its own; lose them and it collapses. Tencent could buy a studio, an engine, and a marketing budget. It could not buy the one thing GTA has and its rivals do not: the crowd.

02 · Lesson · why it matters

Why the wall around Grand Theft Auto is made of people

Some things get more valuable the more people use them - so the leader's real moat is its crowd, and a crowd cannot be bought.

How it works

A game's value to each player grows with the number of others playing
Below a critical mass, an online world is empty and offers nothing
So new players leave, and it stays empty - the cold start
Above that mass, every new player makes it better for the rest
The leader snowballs, and the gap widens on its own
A challenger can buy everything except the crowd

The twist

The wall that beat Tencent was not a better game - it was other people; you can out-spend a rival on everything except its crowd, and the crowd is the product.

Where you've seen this

Phone messaging

you join the app your friends use, not the best one

Marketplaces

buyers go where the sellers are, and sellers where the buyers are

Social networks

an empty feed is worthless, so the crowded one keeps winning

Dating apps

the app with more people nearby beats the cleverer one with fewer

The catch

Network effects cut both ways: the same crowd that made the leader unbeatable can drain out, and once it drops below critical mass the giant collapses as fast as it grew.

Full lesson

The right people, the right money, and it still failed

Lightspeed LA had former Rockstar developers on staff, Tencent’s deep pockets behind it, and six years to work. It was building a rival to Grand Theft Auto with the people who made GTA in the first place. It still failed.

Usually talent plus money plus time wins. Here it did not, and not because the team could not build a good game. It ran into a wall that has nothing to do with how good the game is.

The value that lives in other people

Some things are worth more to you the more other people have them. A telephone is useless if no one else owns one. A language is worth learning because millions already speak it. A game you play with others is only as good as who is there to play with.

Economists call this a network effect. The thing itself barely changes; its worth comes from the crowd around it. GTA’s strength is not really the map or the missions. It is GTA Online, where a huge community already is - with their friends, their crews, their years of progress.

Empty rooms and the cold start

Now flip it. Below a certain number of players, an online world offers nothing. You log in to empty lobbies. No one is there, so there is no reason to stay, so no one stays, so no one is there.

That is the cold-start problem, and it is why a challenger can be genuinely good and still die on arrival. The first player has no one to play with. Neither does the second. The game needs a crowd to be worth joining, and it needs to be worth joining to get a crowd.

Why the leader keeps pulling away

Cross a critical mass, though, and the same force runs the other way. Each new player makes the game a little better for everyone already there. That draws more players, which makes it better still. The lead widens on its own, with no extra effort from the front-runner.

This is why the winner keeps winning. Tencent’s hundreds of millions bought a studio, an engine, and a trailer. They could not buy the crowd - and against a network effect, the crowd is the whole game.

The web this sits in

Look at who is inside this, not just the giant. Every player who “chose” GTA partly chose it because their friends were already there. The crowd chose for them. The eighty people laid off may have built something fine, into a market where fine is not enough.

And the reader is in it too - picking a game for the group chat, pulled toward whatever the group already plays. The shape of this market, where the leader takes almost everything, was set long before any of you arrived. It poses as simple preference. It is closer to gravity.

The catch

Network effects cut both ways. The crowd that made GTA unassailable can drain out. When an online world drops below critical mass it collapses as fast as it climbed - the quiet grief players feel when a favourite game goes dark.

No single seat sees the whole board. From inside, the giant looks permanent, the challenger looks foolish, and the player just wants to log on with friends. Each is reading one corner of a system none of them holds.

03 · Lab · your turn

The Empty Lobby

Launch a new online game and feel how it dies below critical mass but snowballs above it.

04 · Hope · carry this

The one thing all that money could not buy was people choosing to gather - and it is quietly good that the crowd still answers to us, not to a checkbook.