PlayStation has announced major layoffs of 900 employees across multiple studios, including the creator of the Insomniac games. Marvel’s Spider-Man 2.
After the Embracer Group case, we already made an early assessment of the state of the video game industry and its alarming evolution. in between Canceled games, internal restructuring and waves of layoffs In the rough since 2023, there was reason to wonder. After all, last year was a boom year for the gaming market, with many popular titles and yet… that didn’t make Microsoft, Sony, Ubisoft and many other conglomerates lay off their employees all together.
Last January, that was A third of the companies in the industry were affected Through this crisis. About 35% of developers (surveyed by GDC) said they saw their workplace affected by these layoffs. And in 2024, the situation keeps getting worse. Sony has just announced Abolition of 900 posts At various PlayStation studios.
It’s always bad
The crisis continues
Jim Ryan, current president of Sony Interactive Entertainment, calls his teams “A very difficult decision“, includes Reduce your company’s overall workforce by 8% – and it’s interesting to note that Microsoft’s cuts to its own teams since the beginning of this year are proportionally equivalent.
“These people are incredibly talented and have contributed to our success, we are very grateful for their contribution.“, Jim Ryan reportedly said (via VGC). “However, the industry has changed a lot, and we need to look to the future to prepare the business for what lies ahead. We must meet the expectations of developers and players“
“We are very grateful for your contribution.”
Another statement from the SIE clarifiedInsomnia Games, Naughty Dog, Guerrilla And PlayStation’s technology, creative and support teams will also be affected by the move. Jim Ryan shared the company email (Published on Sony website) Which explains PlayStation’s plans in more detail.
The email states PlayStation London Studios completely closed (who was currently working on an online cooperative fighting game) and significant amputations at Fireprite Studios (co-developers of the VR mode).the horizon). Despite the CEO’s apparently kind words, the news is painful. It is even more so because it confirms the crisis in the industry, the causes of which are still being explored.
Naughty dog, hit once again
Murphy’s Law
Game developer Farhan Noor, who is laying off from early 2023 videogameslayoffs.com, estimated that about 10,500 gaming industry workers were laid off last year. With less than two months to go in 2024, the freight total for the year is already at 6,100. A figure that should rise to 7,000 Once the list is updated.
This industrial deluge seems unfathomable. How a studio like Insomniac Games can feel Record success with it Marvel’s Spider-Man 2 (The game celebrated its 10 millionth sale on February 14) and which is pushing the PlayStation to the top of the market, can such a move be thanks to it? What is happening that affects even the most prolific studios?
Insomnia has faced layoffs and hacking since the beginning of the year
To explain the current trend, there are several hypotheses. During our last assessment, we discussed Track streaming services. This requires huge financial investment over the long term and this would explain the willingness of companies to curtail their growth. The goal is to offer players, instead, a subscription catalog and be more selective about the games they offer there.
But there may be another factor in the crisis A domino effect linked to the Covid period. The gaming industry has certainly boomed during the lockdown, which has seen disproportionate enthusiasm from many groups. Embracer Group is a good example with an increase in license and studio purchases between 2020 and 2023. To take advantage of the moment of grace, The entire industry has thrown itself into overproduction of games And in very numerous and expensive projects.
Embracer had to cancel the new Deus Ex game, among other things
Market communication
Between 2020 and 2023, the number of games released on Steam increased each year 9,736 games published at 14,465. And for Triple A, they also saw their budget explode. Marvel’s Spider-Man 2 It will be so A cost of 300 million dollars Vikas (Accordingly Forbes), three times more than the first opus. The problem is that all of its cost increases have not increased the expected profits. The epidemic then naturally declined.
A situation that worried industry shareholders who realized that it would only take one failure or one bad investment to sink a studio so greedy. And as we have seen, the embracer has already started to hang in the carpet in 2023 and thus It lost 44% of its stock market rating. Ubisoft has had a series of minor setbacks and has been forced to cancel some of its games currently in production – including a promising sequel. Immortals Phoenix Rising. With such precedents, prudent shareholders are turning to worried eyes Colossi with feet of clay The most formidable, Microsoft and Sony.
When Ubisoft wanted to make Breath of the Wild
Therefore, it is possible that all their layoffs are part of a radical maneuver to reassure these investors. Microsoft is a special case, because following its merger, it was certain that the firm would restructure. Despite everything, she set the tone: 1900 posts were eliminated in one month. while reinforcing its desire to expand Xbox Game PassA subscription service that promises certain profitability for the company.
By aligning with 8% overall layoffs at Microsoft, Sony seems to be following its model. Then it is not said that the company is making loss, on the contrary. But it has a battle to fight and this one is being fought with loyal investors. So we must prove our good faith and close the studio, disband en masse and “Reevaluate your approach“- as stated by PlayStation Studios. All this to demonstrate the same financial prudence as the competition. In short, cold and cynical market logic, but With dramatic consequences for thousands of jobs and human life.
