PlayStation 5: Console sales disappoint, Sony to cut 900 jobs

 PlayStation 5: Console sales disappoint, Sony to cut 900 jobs

The PlayStation London studio, founded in 2002 and specializing in virtual reality game projects, is to close its doors completely.

SONY announced on Tuesday that it would be laying off 8% of PlayStation's global workforce, becoming the latest technology company to cut jobs. Calling the decision "sad news", PlayStation CEO Jim Ryan said the cuts would affect 900 people worldwide, including in the company's game creation studios.

The PlayStation London studio, founded in 2002 and specializing in virtual reality game projects, is to close down completely, the Japanese entertainment giant has said. A separate statement indicates that US studios Insomniac Games and Naughty Dog are also affected.

Sales targets not met

Hermen Hulst, head of PlayStation Studios, said the company needed more resources to focus on mobile and PC games. "We looked at our studios and portfolio, evaluated projects at different stages of development and decided that some of them would not continue," he said.

"Our philosophy has always been to encourage creative experimentation. Sometimes great ideas don't become great games," added Hermen Hulst. The social plan comes after Sony warned this month that sales of the PlayStation 5 would fall short of initial targets, as the flagship console enters its fourth year on the market.

Sony's video game business enjoyed great success with "Marvel's Spider-Man 2", which was released on the PS5 in October last year and became PlayStation Studios' fastest-selling game within 24 hours of its release

Competition from Switch and Xbox

But the PlayStation 5 faces stiff competition from the Nintendo Switch and could see its rivalry with Microsoft's Xbox harden, following the American group's takeover of "Call of Duty" publisher Activision Blizzard. In January, Microsoft announced the layoff of 1,900 people, or 8% of its workforce, in its games division, in order to consolidate the Activision acquisition.

Last year, tech companies lost a total of 260,000 jobs, according to layoffs.fyi, a California-based website that tracks the sector. Since the beginning of the year, layoffs have amounted to almost 44,000 people, according to the site, in 171 companies.