Sony lays off 900 gaming employees

Sony Group Corp. is set to cut 900 positions, approximately 8% of its global workforce, within its video game division. This move includes the closure of a group in London and will affect subsidiaries such as Insomniac (Spider-Man), Naughty Dog (The Last of Us), and Guerrilla Games (Horizon). Guerrilla Games is expected to reduce its staff by 10%, roughly 40 employees. Additionally, Sony’s PlayStation London, known for the SingStar series and virtual reality games, will shut down.

Jim Ryan, departing President and CEO of Sony Interactive Entertainment, emphasized the need for changes to drive business growth and company development. Hermen Hulst, Head of PlayStation Studios, noted in a message to staff that several games in development will be canceled due to shifts in the market or industry, stating that “great ideas don’t always become great games.”

Sony had previously invested significantly in “games as a service,” focusing on online games designed for long-term monetization. However, oversaturation in the market for these games, coupled with some unsuccessful titles, has led to a change in strategy. Sony recently cancelled online games based on Spider-Man and The Last of Us, as well as a service game cantered around the Twisted Metal racing franchise.

The company’s decision to cut positions aligns with its efforts to enhance margins and improve development efficiency, as mentioned by Sony Interactive Entertainment Chairman Hiroki Totoki in comments to shareholders. The video game industry has witnessed more than 6,000 job cuts this year, driven by escalating budgets, a post-pandemic spending slowdown, and rising interest rates. Earlier this month, Sony shares faced a decline following the announcement of reduced projections for its PlayStation 5 console.