Sony Interactive Entertainment, the company behind the popular PlayStation console and games, announced on Tuesday that it will lay off about 900 employees and close its London studio as part of a global restructuring plan. The move comes as the gaming industry faces a slowdown in growth and increased competition from rivals such as Microsoft and Tencent.
Sony cites changes in the gaming market as the reason for the layoffs
In a blog post, Sony gaming chief Jim Ryan said that the decision to cut 8% of the PlayStation unit’s staff was “inevitable” due to the changes in the way the videogame industry develops, distributes and launches products. He said that Sony needs to “deliver on expectations from developers and gamers and continue to propel future technology in gaming”.
Ryan, who is set to retire in March, also thanked the affected employees for their contributions and said that severance benefits will be provided to them. He said that the layoffs will not affect the quality of the PlayStation products and services, and that Sony will continue to focus on delivering the best gaming experiences possible.
Sony’s London studio and other studios affected by the restructuring
One of the most notable casualties of the restructuring is Sony’s London studio, which will be shut down completely. The studio, which was founded in 1993, was responsible for developing games such as “The Getaway”, “SingStar”, “Wonderbook” and “Blood & Truth”. The studio also collaborated with other Sony studios on projects such as “EyeToy”, “PlayStation VR” and “Astro Bot Rescue Mission”.
The layoffs will also affect other Sony studios, including U.S.-based Insomniac Games, which worked on games such as “Marvel’s Spider-Man 2” and “Ratchet & Clank: Rift Apart”, and Naughty Dog, the studio behind “The Last of Us” and “Uncharted”. Sony said that the reductions will take place in various functions across Sony Interactive Entertainment in the UK, the Americas, Japan, Europe, the Middle East, Africa and the Asia Pacific region.
Sony faces a tough competition in the gaming sector
The restructuring comes at a time when Sony faces a tough competition in the gaming sector from rivals such as Microsoft and Tencent. Microsoft, which owns the Xbox console and games, recently acquired Activision Blizzard, the maker of popular franchises such as “Call of Duty”, “World of Warcraft” and “Candy Crush”, for $68.7 billion. The deal, which is expected to close in 2023, will give Microsoft access to a huge library of games and a loyal fan base.
Tencent, the Chinese tech giant that owns the social media platform WeChat and the gaming company Riot Games, is also expanding its presence in the gaming market. Tencent has invested in or acquired several gaming companies, such as Epic Games, the developer of “Fortnite”, Supercell, the maker of “Clash of Clans”, and Ubisoft, the publisher of “Assassin’s Creed” and “Far Cry”. Tencent also has a stake in Activision Blizzard, which it may sell after the Microsoft deal.
Sony lowers its sales forecast for the PlayStation 5
The restructuring also follows Sony’s announcement earlier this month that it expects a gradual decline in unit sales of the PlayStation 5 console from the next financial year. Sony said that it does not plan to release any major franchise titles in the coming fiscal year, and that it will focus on enhancing the user experience and expanding the online services of the PlayStation 5.
The PlayStation 5, which was launched in late 2020, has sold more than 50 million units worldwide, according to Sony. The console faced supply shortages due to the pandemic and the global chip crisis, which limited its production and distribution. However, the console has received positive reviews from critics and gamers, and has won several awards, such as the “Best Hardware/Peripheral” at the Game Awards 2021.
