It’s a dark day for the gaming industry as PlayStation announces a series of devastating layoffs, studio closures, and project cancellations. Sony Interactive Entertainment (SIE) is set to lay off approximately 900 staff members from its PlayStation division, which accounts for roughly 8 percent of the department’s workforce. This news comes as a shock to the gaming community, as it impacts some of PlayStation’s most renowned studios and beloved franchises.
Among the studios affected by the cuts are Insomniac, Naughty Dog, and Guerrilla, all of which have played a significant role in creating iconic PlayStation games. Insomniac, known for titles like Spider-Man and Ratchet and Clank, has seen tremendous success with its games. For instance, Marvel’s Spider-Man 2 sold an impressive 10 million units within just three and a half months. The layoffs will undoubtedly have a profound impact on these studios and their ability to continue producing high-quality games.
In addition to the studio closures, Sony’s London Studio, which was working on a co-op multiplayer game for PlayStation 5, will be shutting down entirely. Firesprite, another studio, will also experience staff reductions. The layoffs will not be limited to the development teams alone; workers from PlayStation’s Technology, Creative, and Support departments will also be affected.
The news of these mass layoffs was delivered to employees in the US today, with Sony promising to adhere to local laws and regulations when carrying out layoffs in other regions. Outgoing SIE president and CEO Jim Ryan expressed the need for these changes in an email to staff, stating that they are necessary to ensure the long-term sustainability and growth of the company. Ryan emphasized that the goal is to streamline resources and continue delivering exceptional gaming experiences to the community.
Hermen Hulst, the head of PlayStation Studios, further explained that the decision to cancel certain projects was made after evaluating the studios’ portfolios and ongoing developments. Although Hulst did not provide specific details, it is likely that the canceled projects include the one being worked on by London Studio. Reports suggest that a live-service Twisted Metal game, in early development at Firesprite, is also among the casualties.
Hulst emphasized that the decision to halt these projects should not be seen as a reflection of the talent or dedication of the team members involved. He acknowledged that creative experimentation is an integral part of game development and that sometimes projects do not materialize as originally intended due to shifts in the market or industry.
Furthermore, Hulst revealed that SIE is re-evaluating its approach to game development, aiming to strike a balance between blockbuster single-player games and long-tail multiplayer experiences. PlayStation Studios has gained a reputation for delivering immersive, narrative-driven stories, but Hulst acknowledges the need to adapt to changing player preferences. This includes exploring social, online experiences and expanding game releases to additional platforms such as PC and mobile.
While Sony is actively working on multiple live-service games, including plans to release 10 of them by 2026, it has already shelved one highly anticipated title—The Last of Us Online. However, the company has experienced success in the live-service genre, with Helldivers 2 becoming one of this year’s biggest hits.
Despite these setbacks, Sony’s decision not to release any sequels for its major first-party franchises until at least April next year has raised concerns among fans. The company will rely on third-party titles like Final Fantasy 7 Rebirth and the Elden Ring expansion to fill the gaps in its game lineup. Additionally, Sony has revised its PS5 sales forecast for the current fiscal year, lowering it from 25 million to 21 million consoles sold.
The gaming industry has been hit hard by layoffs this year, with more than 7,000 job losses already recorded. Microsoft initiated sweeping cuts in its gaming division in January, laying off around 1,900 employees. Other companies, including Riot Games, Unity, Twitch, Supermassive Games, Behaviour Interactive, and Sega of America, have also implemented layoffs.
As the gaming community absorbs this news, it is clear that the industry is undergoing significant changes. PlayStation’s decision to downsize and re-evaluate its game development strategy reflects the evolving landscape of gaming and the need to adapt to shifting player preferences. While these changes may be challenging for those directly affected, the ultimate goal is to ensure the continued success and ability to deliver exceptional gaming experiences that PlayStation is known for.