Sony is cutting 900 jobs in its PlayStation unit and shutting a development studio in London in response to a slowdown in the video gaming industry.
The job losses come just weeks after the Japanese tech giant cut annual sales expectation for its PlayStation 5 console from 25 million to 21 million units following disappointing sales in the December quarter.
The layoffs account for roughly 8 per cent of the PlayStation division’s staff in regions from the Americas to Asia. A number of games in development have been cancelled. The studio in Soho was known as a hub for working in virtual reality, and had been developing a game set in a fantasy version of London.
Jim Ryan, Sony’s gaming chief, said the company had made the “extremely hard decision” because the “industry has changed immensely” and the company needed to “future ready ourselves to set the business up for what lies ahead”.
In an email sent to PlayStation staff on a “difficult day at our company”, Ryan confirmed that the cuts would mean the company’s London studio would close “in its entirety” and that there would also be layoffs at the British-based Firesprite Studio.
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Ryan added that there would also be “reductions in various functions across Sony Interactive Entertainment in the UK”.
The US-based Naughty Dog studio, behind the popular video game The Last of Us, and Insomniac Games, which developed Marvel’s Spider-Man series, will also face layoffs.
This month Sony said it expected a gradual decline in sales of its PlayStation 5 console from the next financial year and that it does not plan to release any more major franchise titles in the coming fiscal year.
The global video game market grew just 0.6 per cent last year to $184 billion, according to the industry tracker Newzoo, although that was an improvement of a decline of more than 5 per cent in 2022.
Riot Games, owned by Microsoft and Tencent, has also cut jobs due to a slowdown in the industry.
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In January, Microsoft laid off about 1,900 employees in its gaming division — an equivalent of about 8 per cent of its gaming workforce — just three months after it had completed its $69 billion purchase of the video game maker Activision Blizzard. Riot Games, the maker of titles such as League of Legends and Valorant, cut 11 per cent of its staff, or about 530 roles, in January.
