Hah. I have wondered about this particular one a fair bit.
First, it seems there is just not market for their product that could possibly support the valuation in the near future. Second, by virtue of already being so large a company, there is no room for evaluation of new small projects that would change direction. Anything must immediately have enough potential to generate millions in revenue.
Runway is maybe 5 years, so they got until then to produce enough revenue to raise more funding or become profitable. IIRC they sold approximately 50% of the company for the 500M round. Maybe I got this one completely wrong, but I just don't see how this can go well. What an incredibly inefficient allocation of capital for the ecosystem. Imagine giving 100 teams 5M each instead.
The reckoning may be still to come for various other Softbank-backed companies. Will just take a while for them to run out of cash.
For example, Improbable also got 500M from Softbank a few years ago, and makes 500k (!) revenue at a loss of 50M [0] and cost of revenue of 10M. It's insane.
- the founders were just out of undergrad
- zero background/credibility in either distributed systems or gaming or simulation
So I will guess there was no well-defined R&D roadmap ahead at all. Where should it have come from?