Sony announced on Tuesday its decision to close a facility in London. She cut approximately 900 jobs, signaling a broader restructuring move in response to challenges faced by its gaming division, according to Reuters.
The decision comes shortly after Sony revised its annual sales target for the PlayStation 5, prompting the company to reduce its workforce by around 8% across Asia and America.
Jim Ryan, the head of Sony’s gaming division, acknowledged the necessity of tough decisions amid shifts in the video game industry’s creation, release, and marketing processes. Ryan is set to retire in March, adding to the leadership changes within Sony.
Sony’s move to downsize follows similar actions by other gaming companies like Microsoft and Riot Games, owned by Tencent, which have recently laid off thousands of employees due to sluggish market recovery.
While the global video game industry saw a marginal growth of 0.6% to $184 billion last year compared to the previous year, it still faces challenges and uncertainties.
The layoffs at Sony will impact several of its studios, including Insomniac Games in the United States, known for titles like “Marvel’s Spider-Man 2,” and Naughty Dog, the developer behind “The Last of Us.”
Sony also announced that it doesn’t plan to release any major franchise games in the upcoming fiscal year and anticipates a gradual decline in the PlayStation 5 unit price starting in the following fiscal year.
Despite selling 50 million units worldwide since its late 2020 launch, the PlayStation 5 faced production slowdowns in its early years due to supply shortages exacerbated by the pandemic.
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