Topline
Sony Interactive Entertainment, Sony’s video game division, is laying off 900 employees across multiple PlayStation studios and will completely close its London studio, the company announced Tuesday, the latest in a series of layoffs that have impacted the video game industry.
FILE - In this June 14, 2018, file people stand online next to the PlayStation booth at the 24th ... [+]
Key Facts
The layoffs amount to around 8% of Sony Interactive Entertainment’s workforce, and will impact employees across all of the company’s regions, according to Sony Interactive Entertainment CEO Jim Ryan.
Some of the company’s biggest gaming studios are affected—including Insomniac Games and Naughty Dog, developers of hit games “Spider-Man” and “The Last of Us,” respectively.
In an email to staff, Ryan said the cuts were the result of discussions about “the evolving economic landscape, changes in the way we develop, distribute, and launch products, and ensuring our organization is future ready in this rapidly changing industry.”
The company pledged that “affected employees will receive support, including severance benefits,” Ryan said.
Key Background
Sony’s announcement comes amid a string of recent layoff announcements affecting the video game industry. MIcrosoft announced in January it was laying off 1,900 employees from Xbox and Activision Blizzard, which it acquired last year. “League of Legends” developer Riot Games also announced last month it was laying off more than 500, and game development software maker Unity recently announced more than 1,800 cuts. The gaming cuts come amid a post-pandemic slump in gaming, with investor and advisor Matthew Ball writing in January that consumer spending on video games was down 4.1% in 2023 compared to 2021, as video game publishers claim their costs are rising rapidly. Ball cites numbers from Circana that note video game participation surged in 2020 during the pandemic but has since come down as lockdown orders were lifted and consumers who took up video games in quarantine began looking for more recreational activities. They also come amid roader cuts across the tech industry as a whole, with layoffs recently hitting tech companies like Okta, Zoo and PayPal.
Crucial Quote
“Remarkably, 2023’s figures are exactly where pre-COVID trendlines would have predicted,” Ball wrote in January. “In other words, COVID did not permanently pull forward ecommerce penetration; it pulled society ahead of where it was ready to be, and so we stalled and shrank afterwards.”
Tangent
The news comes days after Sony reduced its projections for sales of its PlayStation 5 in 2023 from 25 million to 21 million as sales declined—prompting Sony to note that the console is soon entering “the latter stage of its life cycle.”
Further Reading
