Sony Laying Off 900 Workers Proves Blockbuster Game Development Is In Trouble

There’s no such thing as too big to fail.

screenshot from Spider-Man

On Tuesday, Sony announced it’s laying off 900 PlayStation employees around the world, impacting some of its most successful first-party studios. The announcement brings this year’s total gaming layoffs — a grim figure of fascination that seems to grow every day — to around 7,000. Coming just a month after Microsoft eliminated 1,900 jobs from Xbox and Activision Blizzard, the losses make it clear even working on the biggest games studios have to offer is no protection from the industry’s brutal economic conditions — and it might just be a liability.

This round of layoffs hits employees at Naughty Dog, Insomniac Games, Guerrilla Games, Firesprite, and PlayStation’s London Studio, which is shuttering entirely. That means the studios behind Spider-Man 2, The Last of Us Part II, Horizon Forbidden West, and most of PlayStation’s first-party VR games have all lost staff or been shut down. Sony declined to comment further.

The developers behind Horizon Forbidden West and its VR spin-off Call of the Mountain cut employees.


But don’t worry, newly unemployed developers. As outgoing CEO Jim Ryan told the company in an email: “The goal is to streamline our resources to ensure our continued success and ability to deliver experiences gamers and creators have come to expect from us.” Surely that will be a comfort as hundreds of people search for work in an industry that’s already been hemorrhaging talent for years.

In the last year, we’ve had ample opportunity to get accustomed to the robotic language of these layoff announcements, the way they treat putting hundreds of people on unemployment as an inevitable outcome and evade any responsibility for wrecking their lives.

“Delivering the immersive, narrative-driven stories that PlayStation Studios is known for, at the quality bar that we aspire to, requires a re-evaluation of how we operate,” Hermen Hulst, head of PlayStation Studios, wrote in a separate notice.

The Last of Us Part II developer Naughty Dog is among the studios hit with layoffs.


And that appears to be true. To pursue the kind of games that PlayStation and most AAA developers create does seem to require constant “re-evaluation,” which in this context of course means layoffs. Massive sums of money must be shifted into “new technology and partnerships,” as Hulst writes, so that Sony can continue “delivering and sustaining social, online experiences.”

The question that these announcements never answer, or even acknowledge, is why that pursuit is worth it. To make the narrative-driven games that PlayStation is known for, which incur gargantuan costs thanks to five-year development cycles and hardware-pushing graphics, means turning every game into a massive gamble that demands millions of sales just to break even. It means hiring huge numbers of people to pour thousands of hours of effort into a single project, knowing that in the lull before work on the next game picks up, many of them will be kicked to the curb. So why must this be the way that PlayStation and other major publishers make games?

The obvious answer, of course, is the demand for infinite growth. As corrosive as pursuing shareholder value at all costs is, it’s the metric that public companies that Sony have committed themselves to. While Hulst writes, “growth itself is not an ambition,” Ryan admits “changes need to be made to continue to grow the business and develop the company.” It’s not enough just to put out moderate hits that keep the company running and fund the next game. Games must instead come with budgets in the millions of dollars that pull in millions more in revenue, even if the studios that create them are destroyed in the process.

London Studio’s 2019 game Blood & Truth was a hit on PlayStation VR.


“Our philosophy has always been to allow creative experimentation,” Hulst writes. ”Sometimes, a project is started with the best intentions before shifts within the market or industry result in a change of plan.”

While it’s arguable how much Sony is actually pushing experimentation, it’s a fair statement. If a developer is running with experimental projects, some of them will inevitably fizzle. But it’s hard to see closing down the studios creating Sony’s boldest VR experiments as supporting that vision. True experimentation would mean games without a proven market, not built on already-successful franchises, that don’t need to sell millions of copies to justify themselves. The closure of London Studio, like the closure of PlayStation’s Japan Studio in 2021, is a failure to support the developers actually doing that experimental work.

None of this is to say that scaling back is the key to success or that indie development is somehow safer than AAA. Earlier this week, a Copenhagen indie developer announced it was closing down, just months after launching the excellent (and experimental) Saltsea Chronicles. Funding has dried up across the games industry, and there’s no way to avoid the fallout entirely. But Sony, just like Microsoft, is in a better position to weather the storm than any of the smaller publishers still trying to do good, weird work in the face of it.

The choice to focus on mega-blockbusters to the detriment of all else, and to cut jobs instead of scope, is just that — a choice. It’s well past time that the industry faces a “re-evaluation” of its own about how to make good games whose costs aren’t measured in lost jobs.

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