The announcement from Sony Interactive Entertainment (SIE), in which the official cut of over 900 employees, cancellations, and the closure of a studio was confirmed, was accompanied by a statement from PlayStation Studios. The first-party division of Sony's gaming business revealed the reasons behind some decisions, confirming that its exclusive development processes are under review and will undergo changes. What will happen? Hermen Hulst responded.
PlayStation Studios was also affected by layoffs and cancellations
The controversy of the day was led by Sony and the decisions in its gaming business. In a statement regarding what is happening at PlayStation Studios, Hermen Hulst explained the reason behind the layoffs and cancellations affecting studios like Naughty Dog, Insomniac, and Guerrilla Games. He also acknowledged that the industry is changing, and it is necessary to review the processes leading to the development of major productions, as well as how an updated creative and business model relates to games as a service and online multiplayer.
In this regard, the head of PlayStation Studios stated: "PlayStation 5 is in its fourth year, and we are at a stage where we need to take a step back and see what our business needs. At the same time, our industry has undergone a continuous and fundamental shift that affects how we all create and play games. Delivering the immersive and narrative stories for which PlayStation Studios is known, at the level of quality we aspire to, requires a reassessment of how we operate. Offering and maintaining online social experiences, allowing PlayStation players to explore our worlds in different ways, as well as releasing games on additional devices such as PC and mobile, requires a different approach and different resources."
Today, Sony Interactive Entertainment initiated a reduction in its global workforce, including teams within PlayStation Studios: https://t.co/lP25CYWrp3
— PlayStation (@PlayStation) February 27, 2024
Projects and the PlayStation Studios model will be reviewed, and nothing is assured
Subsequently, Hermen Hulst revealed that the various projects in development at PlayStation Studios underwent evaluation, and in some cases, their cancellation was decided. However, he mentioned that part of these decisions is also related to changes in the industry and business models: "Our philosophy has always been to allow creative experimentation. Sometimes, great ideas do not turn into great games. Sometimes, a project starts with the best intentions before changes in the market or industry result in a change of plans. I am deeply saddened to see talented people leave the company. I have much admiration, appreciation, and respect for their work."
That being said, everything indicates that PlayStation Studios will implement changes in the development processes and budget management of its major exclusive productions. According to reports following the hack at Insomniac, Marvel's Spider-Man 2 cost more than $300 million. Production costs soared, and sales do not favor PlayStation's business, at least not at the level Sony expects. Some say that the era of those big releases and the frequency with which they came out on the PS4 is behind us, and it seems that PlayStation Studios' plans confirm this.
As if this were not enough, PlayStation announced that some of the layoffs mean a reduction in personnel in the areas of technology, creativity, and support, so PlayStation Studios' projects will have to do more with less.
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