PlayStation and EA Hit With Massive Layoffs

Times remain tough for the video game industry as a whole.

By Robert Marrujo. Posted 03/01/2024 11:26 Comment on this     ShareThis

Layoffs have been a prominent part of the video game industry so far in 2024. Microsoft recently axed 1,900 jobs across Activion Blizzard and Bethesda; SEGA of America let go of 61 workers; Unity has laid off 25 percent of its workforce. Those are just a handful of examples but there are many more. Sadly, the trend is showing no signs of slowing, as both Sony and Electronic Arts have now made their own staff reductions in recent days.

Sony is laying off eight percent (the equivalent of 900 people) from its PlayStation operations, which includes the shuttering of its London Studio and layoffs across Naughty Dog, Insomniac Games and Guerrilla Games. Sony Interactive Entertainment CEO Jim Ryan shared the news via the SIE website, where he explained in a post the thinking behind the releases:

“[The] industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead. We need to deliver on expectations from developers and gamers and continue to propel future technology in gaming, so we took a step back to ensure we are set up to continue bringing the best gaming experiences to the community.”

In contrast with these layoffs, Sony remains very lucrative, with the company seeing a 5.8 percent profit margin in fiscal year 2023. ¥3.2 trillion ($21.2 billion) in net sales were raked in by its Game & Network Services division at the end of a nine month period as of December 31, 2023. However, Sony president Hiroki Totoki asserts that being profitable isn’t good enough because, well, the company is less profitable than it was in preceding fiscal years, most notably when it had a profit margin of 12.9 percent in 2020 (yes, at the height of pandemic lockdowns).

Totoki went on to compliment his staff but followed that up with this statement:

“However, having said that, when it comes to the business itself, I think there is room for improvement. And that’s got to do about how to use the money or about the schedule of development or how to fulfill one’s accountability towards development, etc.”

It can be interpreted that Totoki is saying that there were too many teams failing to follow through on meeting deadlines, individual staffer failing to be personally accountable, and that money was being mishandled. Factor in the rise of AI, which is slowly but surely having a major impact on workflow for every level of game design, and it seems that Sony is looking to jettison was it considers deadweight while positioning for days where creative labor is handled more by computers than people.

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Moving on to EA, that company is releasing roughly five percent of its workforce, or approximately 670 people. CEO Andrew Wilson said this is all part of the restructuring plan at EA and that the company is “moving away from development of future licensed IP that we do not believe will be successful in our changing industry.” Notably, EA has been partnered with Disney as of late in producing games for that company’s various IPs. With declining consumer and fan interest in brands like Star Wars and Marvel in recent years, the games based on these properties might be seeing a resultant fall in sales, thus prompting this move, at least in part. EA will be focusing more on its own IPs and established brands like Madden moving into the future.

Two months down in 2024 and already hundreds of game designers without work. We’ll continue to report on this upheaval in the industry as it unfolds. We sincerely hope that those impacted are able to quickly find new positions soon.

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