Sony, a Japanese company, announced on Tuesday that it is closing a London studio and laying off roughly 900 employees at its PlayStation division as the video game industry struggles to rebound from a post-pandemic slump.
8% of division’s employees
The layoffs, which will impact roughly 8% of the division’s employees across the Americas and Asia, occur just days after Sony lowered its forecast for the PlayStation 5 console’s yearly sales.
Jim Ryan, the head of Sony’s gaming division, stated,
“We have concluded that tough decisions have become inevitable,” attributing it to modifications in the way the videogame industry creates, releases, and markets its goods. In March, Ryan is scheduled to retire.
The move aligns Sony with the likes of Microsoft (MSFT.O), opens new tab and Tencent-owned Riot Games, which have also laid off thousands of employees in recent months due to slow recovery in the gaming market.
The logo of Sony PlayStation is displayed at Tokyo Game Show 2019 in Chiba
The global videogame market grew just 0.6% last year to $184 billion, according to industry tracker Newzoo, though that was better than a decline of more than 5% in 2022.
The layoffs will also affect Sony’s other studios, including U.S.-based Insomniac Games that worked on games such as “Marvel’s Spider-Man 2” and Naughty Dog, the studio behind “The Last of Us”.
Earlier this month, Sony announced that it does not intend to release any significant franchise titles in the upcoming fiscal year and that it anticipates a gradual decline in PlayStation 5 unit sales starting in the following fiscal year.
Since its release in late 2020, the gadget has sold more than 50 million units worldwide.
However, the entertainment conglomerate’s device production was slowed down in the first few years due to shortages in supplies brought on by the pandemic.
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