We believed that 2023 had been the worst year for video games, but 2024 is being even worse. To the massive layoffs of almost 2000 people at Microsoft, over 500 at Riot Games, SEGA and other companies are now joined by another one. Sony Interactive Entertainment announced layoffs of around 900 employees, affecting several PlayStation studios and permanently closing one of them.
Through an official statement published on the company’s websiteoutgoing president and CEO Jim Ryan announced the layoffs, describing them as “difficult news.”
As for the reasons he gave to justify the layoffs at PlayStation studios, Ryan said that “The industry has changed immensely and we need to prepare for the future”.
Although this will affect SIE in all regions – layoffs represent 8% of the company globally – The main affected are PlayStation London Studios, which will be closed completely, and Firesprite Studios, which will be greatly reduced. The London studio used to work on EyeToy games, VR and the series Singing star. They were currently working on a game as a service that has now been cancelled. For its part, Firesprite was working on a new Twisted Metal.
Other affected studios are Guerrilla (Horizon Forbidden West), Naughty Dog (The Last of Us Parte II) e Insomniac (Marvel’s Spider-Man 2). Not even creating some of the most successful games in recent years kept them safe.
What are the layoffs actually due to?
In our article on layoffs in the video game industry last year we explained in part why this situation is due. Virtually all large companies in the sector took advantage of the drop in interest rates during the COVID-19 pandemic to hire more employees. But the pandemic ended. Instead of preparing for changes in the economy, the industry continued to hire staff by approving high-cost projects. When interest payments returned to normal, they realized that the very high profit projections they had painted for shareholders could not be met..
The layoffs at Sony Interactive Entertainment that will affect PlayStation so much are the result of the tendency to produce large AAA titles with very high budgets and that last many years in development. Despite the great success of many of them, it is an unsustainable model. It has to change for the industry to survive.
