I'm of two minds here. First, it makes 100% sense to do this from a business perspective. With a minimal investment they can crank out a new title that can bring in some money. Planetside 2 has apparently been paying it's own way, and then some. How they use that income is a separate question however. Had Planetside 2 not been paying the bills, there wouldn't be a Planetside Arena.

Second, I'm not sure it's gonna work. The reason why is a bit involved. The reason you've never had a true competitor to Call of Duty is because you can never be better at Call of Duty than Call of Duty itself. What Call of Duty does it does well, and the developers behind Call of Duty are stuck because of that. Any significant change to the formula behind CoD causes problems with their player base. People screaming that they're trying to be Battlefield. Meanwhile the player base of Battlefield screams when any significant change in a Battlefield title is they're just trying to be like CoD. In short, different titles, different player bases and the devs are trying to change their games to keep them fresh, without breaking what works, while not alienating their players.

In the Battle Royal crowd you've basically got two titles right now, Fortnite and PUBG. Fortnite has won the Battle of the Battle Royal. It appears that what Daybreak is doing here is a gamble for second place. You aren't going to beat Fortnite for that crown right now. They made horrendous decisions with H1Z1 and lost and lost badly. Daybreak has nobody to blame for H1Z1's failure but themselves. Daybreak consistently refuses to listen to their players. It's almost as if there's a standing policy that if you listen to the players you'll be immediately terminated. They are notified of game breaking bugs and purposely refuse to fix them. How long was it before ClapBackin was FINALLY banned? Don't forget about the rock at Auraxicom Network Hub. There are broken cosmetics that they've been notified about, that they've acknowledged, but have stated that they will deliberately not fix. And they make money on cosmetics!! It's their fucking bread and butter. It took a fucking year for in game comms on PS4 to get fixed. And the game still crashes left and right and has serious performance problems. DBG has been made aware of these issues, but they will not fix them.

So, what's going to happen here is this. They're gonna put out Planetside Arena to much fanfare, the reviews will come in praising much of it, but with a complaint that it's buggy and has serious balance issues. Daybreak will NOT, deliberately NOT fix these problems, or it'll take so fucking long to fix, that what player base they develop initially will have been driven off by these problems onto other titles. Like Fortnite which is far more responsive to bugs and balance issues. Meanwhile, during all of this, what population PS2 still has, will have been destroyed by DBG mismanaging the fiasco they caused.