Sony lays 900 people off, shuts London office due to stagnating console sales, slowing gaming industry

Sony, the Japanese electronics giant, announced on Tuesday that it will be cutting approximately 900 jobs from its PlayStation unit and closing a studio in London. This decision comes as the videogame industry continues to face challenges as console sales continue to stagnate and the gaming industry slows down as a whole.

The layoffs, affecting around 8 per cent of the division's workforce across regions spanning from the Americas to Asia, come shortly after Sony revised down the annual sales expectations for its PlayStation 5 console.

Jim Ryan, the head of Sony's gaming division, stated, "We have concluded that tough decisions have become inevitable," attributing the layoffs to changes in the development, distribution, and launch processes within the videogame industry. Ryan is expected to retire in March.

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This move puts Sony in line with other industry players such as Microsoft and Tencent-owned Riot Games, both of which have also undergone significant layoffs in recent months due to the slow recovery in the gaming market.

Despite a modest 0.6% growth in the global videogame market last year, reaching $184 billion according to industry tracker Newzoo, the figures show an improvement from the decline of over 5% observed in 2022.

The job cuts will impact other Sony studios as well, including U.S.-based Insomniac Games, known for titles like "Marvel's Spider-Man 2," and Naughty Dog, the studio behind "The Last of Us."

Earlier this month, Sony stated its expectation of a gradual decline in unit sales of the PlayStation 5 starting from the next financial year, and it does not plan to release any major franchise titles in the coming fiscal year. Despite initial supply shortages due to the pandemic, the device has managed to achieve lifetime sales of over 50 million units since its launch in late 2020.

(With inputs from agencies)