Sony announces job cuts, studio closure amid industry challenges

WEB DESK: In a significant move, Sony’s gaming division, Japan’s Sony, revealed on Tuesday that it will be reducing its workforce by approximately 900 employees within its PlayStation unit.

Simultaneously, the company will be closing a studio in London, marking a response to the ongoing challenges faced by the videogame industry in its post-pandemic recovery.

This decision, impacting around 8% of the PlayStation division’s workforce across regions spanning the Americas to Asia, follows Sony’s recent adjustment of annual sales expectations for its PlayStation 5 console.

Jim Ryan, the chief of Sony’s gaming division, expressed the inevitability of making tough decisions, attributing them to the evolving landscape of how the videogame industry develops, distributes, and launches products. Ryan, set to retire in March, highlighted the need to adapt to industry changes.

This strategic move aligns Sony with industry peers such as Microsoft and Tencent-owned Riot Games, both of which have undergone workforce reductions in recent months due to a slow recovery in the gaming market.

The global videogame market experienced modest growth of 0.6% last year, reaching $184 billion, according to industry tracker Newzoo. This performance, while positive, contrasts with the more than 5% decline observed in 2022.

The repercussions of the job cuts will extend to other Sony studios, including U.S.-based Insomniac Games, known for its work on titles like “Marvel’s Spider-Man 2,” and Naughty Dog, the studio behind “The Last of Us.”

Sony, in an earlier announcement this month, anticipated a gradual decline in unit sales of the PlayStation 5 in the next financial year.

Additionally, the company stated that it does not plan to release any major franchise titles in the coming fiscal year.

Despite facing challenges, the PlayStation 5 has accumulated over 50 million units in lifetime sales since its late 2020 launch, overcoming initial hurdles caused by pandemic-related supply shortages.