PlayStation will lay off 900 workers, 8% of its total workforce worldwide. This is the latest news we have regarding layoffs in the video game industry, which already exceed 6,000 jobs eliminated in 2024. The crisis that began in 2023 continues this year and, in just two months, there have already been more than half as many layoffs as in the previous 12.
In an internal email, retiring Sony Interactive Entertainment CEO Jim Ryan said that “after much consideration and discussion over the past few months, it is clear that changes must be made to keep the business growing and the company moving forward. “We need to take a step back, look at our business holistically and move forward focusing on the long-term sustainability of the business and delivering the best experiences to the community.”
As Jason Schreier explains in Bloomberg, the 900 layoffs in Sony’s video game division will affect well-known internal studios such as Insomniac Games (Marvel’s Spider-Man and Ratchet
The division most affected by the round of layoffs has been Sony’s internal studio in London, which will close completely. This studio is famous for, among other things, being in charge of the SingStar franchise and several games for PlayStation VR such as Horizon Call of the Mountain.
According to The Verge journalist Tom Warren, this news has taken the Sony studio in the United Kingdom by surprise, since just five days ago they received a visit from Jim Ryan and took a photo that is going viral on social networks.
Last week, Sony announced in its latest financial report that it was reducing its PlayStation 5 sales expectations for 2024. This caused a drop in its stock market value of 8.4%, the company’s largest since February 2022. To this Added to this is the increase in the costs of developing big-budget video games, a trend that translates into less profit margin for companies.
In another internal email, the head of Sony’s development studios, Hermen Hulst, said that “sometimes, great ideas don’t turn into great games. Sometimes a project starts with the best of intentions, but changes in the market and industry cause changes in plans.”
Sony – and the video game industry in general – is rethinking its business model. Recently, they have canceled a The Last of Us multiplayer game developed by Naughty Dog and the company’s interim CEO, Hiroki Totoki, assures that no major launches of well-known franchises are expected for the coming months.
The big-budget video game market is increasingly unstable and companies are not able to make as much profit as they would like on their investments. This is one of the reasons why Microsoft has decided to publish four of its exclusives on other platforms, a change in strategy that, according to Totoki, could also be considered at Sony.
That of Sony is the latest news that has been known on this topic, but, just two days ago, Supermassive Games announced that it would lay off 30% of its staff: about 90 workers. This studio is known for horror games such as The Quarry, Until Dawn or The Dark Pictures saga.
Another bad news in the sector is the closure of the Danish studio Die Gute Fabrik, responsible for games such as Mutazione or Sportsfriends. According to what they say in a statement, the studio is closing due to the current “editorial and investment panorama,” which makes the survival of an independent studio like this very difficult.
We already said it in January in another article focused on layoffs in the video game industry: if 2023 was the year of layoffs, 2024 will be the year of studio closures. Very hard months await the electronic entertainment sector and especially its workers.
