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[StreetsofBeige]

Record revenue, Helldivers 2 selling gangbusters, and the gaming division has made about $2 billion profit per year since 2016 or 2017 and one of the COVID years was $3 billion profit. Add it up and that’s probably around $15 billion profit.

And just like other tech companies and MS who gutted people stemming from the Activision post merger fallout, Sony is no different.

Cost savings and profit first. So for all the MS/Activision ragging, Sony does it too.

 

[hemo memo]

Usually when Sony reveals a game, it actually releases and at least lives up to expectations if not surpass them. Everything they revealed in 2020 and 2021 was released within 2-3 years maximum, usually closer to 1-2 years after reveal. And IIRC, they've been able to increase their revenues without needing to buy massive 3P publishers to inflate their gaming division revenue & profits.

 

[mckmas8808]

Are all these tech companies pre empting a recession or are we already there?

America isn't even close to a recession. NOT AT ALL!

Microsoft/ABK cuts appear to be generous now. They just did them at the beginning of the year. However, no job loss is ever good!

Didn't MS/ABK cut way more people?

 

[MatrixReloaded101]

Just because someone may say they need more staff doesn't make it true either. It can be that the existing staff aren't working efficiently. The idea laying off potentially no longer needed or ineffective staff is 'evil' is silly. Businesses don't exist to provide employment as their first priority, contrary to what those of a leftist worldview believe.

Have you ever worked a day in your life? Not everybody pulls their own weight, and if there is enough productive work to go around (which is NOT always the case), that doesn’t mean the people you have are the right ones to do it or can be trained to do it. There are vast, vast differences between individuals in terms of competencies and work ethic.

Your “nobody should be laid off ever, as long as a company is profitable” philosophy is simple minded and laughable. Give me a break.

How do you know they weren’t needed?

How do you know they were ineffective?

I’ve worked long enough to see good workers get fired/laid off just because of office politics alone (manager didn’t like there face or they didn’t chip in to the toxic work culture). This idea that people get canned because of inefficiency is very naïve.

Look how quickly you defend a corporation because of a narrative they have created, this is part of why these issues exist.

If you think competence and work ethic is what gets you ahead in these corporations … you are the simple minded ones.

 

[Lumpyoatmeal]

Hopefully these layoffs will increase their first party studios' productivity, japanese game devs have been pumping so many games out in much shorter timeframe. It makes no sense that the sony first party studios take so long to make a game with much higher budget. Overhiring is never good for efficiency.

It’s not over hiring though. To make today’s AAA game you need a magnitude amount of staff; This staffing requirement is only going to exceedingly get higher in the upcoming years especially when the AAA bar reaches the billion dollar mark when Grand Theft Auto 6 releases.

 

[ChorizoPicozo]

looks like A.I. art

 

[NickFire]

This is WAYYYYYYYYYYY scummy....

How do we know it was a scummy move? If he wanted to personally see what they have been working on, and came away believing their work to date did not justify continuing to move forward, would closing the studio be scummy or a reasonable decision?

Obviously I can't say why the decision was made, but it is entirely possible the visit was their chance to prove their value and they dropped the ball.

 

[ChorizoPicozo]

Ok, so Sony mismanages studios as well? Chocked! I thought that it was only a MS thing.

oh, make no mistake. is only a MS thing.

 

[Salty Popsicle]

Single-player cinematic quality games have been Sony/PlayStation's bread and butter business for the past two decades. However, most of the studios under Sony/PlayStation were forced by management to pivot their development efforts towards GAAS style games within the past 2-3 years because single-player games simply take too long to make, are too expensive to make, and don't bring much revenue past the initial 12 months of sales (unless remastered every few years).

This pivot towards GAAS seems to have happened way too fast and without much of an over-arching plan because it has led to:

- 2+ years of development on a TLoU GAAS game led to absolutely nothing except a cancelled project and a proper sequel to the IP being pushed to 2026 at the earliest (6-year wait for a sequel is unacceptable; especially if it completely skips the PS5 generation).
- Sony purchasing Bungie for $3.6 billion in 2022 and we have no new game from them. Meanwhile Destiny is confirmed to be unsustainable revenue wise and the studio was hit with mass layoffs in 2023.
- A Twisted Metal GAAS game has now been cancelled after 2 years of development and 900 positions laid-off across Sony/PlayStation (most of these probably employees working on GAAS experiences)

Now let's assume for a moment that Sony/PlayStation is indeed winding down their GAAS plans substantially, how does this fix the initial problem of traditional single-player games being unsustainable for Sony business wise?

 

[hemo memo]

It’s not over hiring though. To make today’s AAA game you need a magnitude amount of staff; This staffing requirement is only going to exceedingly get higher in the upcoming years especially when the AAA bar reaches the billion dollar mark when Grand Theft Auto 6 releases.

GTA is a different beast entirely and shouldn’t be comparable.

 

[GoldenEye98]

Wait until "game engines" are just an AI video generator iteratively looping....a lot of jobs will be gone.

 

[peish]

Their interim CEO is placed to do this heartless hatchet job?

Hiroki Totoki is a butcher!

 

[nial]

This is WAYYYYYYYYYYY scummy....

He was at SIE Europe, which is in London. Nothing to do with the particular studio.

 

[SaucyJack]

Fuck sake. Media molecule is a fucking cockroach

Media Molecule are tiny

 

[Fabieter]

America isn't even close to a recession. NOT AT ALL!



Didn't MS/ABK cut way more people?

No they aint but alot of the growth in the united states is made by like 10 companies. But it isnt just America, those companies operate on a global scale.

 

[LiquidMetal14]

Good luck to them. Clearly even a market leader feels the pinch of the current global economy

 

[StreetsofBeige]

Single-player cinematic quality games have been Sony/PlayStation's bread and butter business for the past two decades. However, most of the studios under Sony/PlayStation were forced by management to pivot their development efforts towards GAAS style games within the past 2-3 years because single-player games simply take too long to make, are too expensive to make, and don't bring much revenue past the initial 12 months of sales (unless remastered every few years).

This pivot towards GAAS seems to have happened way too fast and without much of an over-arching plan because it has led to:

- 2+ years of development on a TLoU GAAS game led to absolutely nothing except a cancelled project and a proper sequel to the IP being pushed to 2026 at the earliest (6-year wait for a sequel is unacceptable; especially if it completely skips the PS5 generation).
- Sony purchasing Bungie for $3.6 billion in 2022 and we have no new game from them. Meanwhile Destiny is confirmed to be unsustainable revenue wise and the studio was hit with mass layoffs in 2023.
- A Twisted Metal GAAS game has now been cancelled after 2 years of development and 900 positions laid-off across Sony/PlayStation (most of these probably employees working on GAAS experiences)

Now let's assume for a moment that Sony/PlayStation is indeed winding down their GAAS plans substantially, how does this fix the initial problem of traditional single-player games being unsustainable for Sony business wise?

Exactly. Yea Helldivers 2 is a big success. But not destruction all stars, that cancelled Deviation Games studio game and by the looks of it many games currently in dev. So the probability of success with their recent GAAS games is 1 out of many. Their track record isn’t good with MP games going all the way back to PS3 so they should had just focused on first party SP games where even the crappiest rated one Days Gone still sells like 8 million copies. Every third party studio would kill for those kinds of sales. And that’s the low end. When you get to the big IPs they sell like 15-20M copies.

The Bungie acquisition sunk a lot of the profit margins. Since they bought them their operating margin has been cut in half from around 12% to 6% as Sony is amortizing the costs of acquisition over multiple yearly quarters.

So in turn their big focus on improving margin comes from buying Bungie. If their gaming division profits the past two years were still 12-13% like they were from 2018-2021 they wouldnt be in such margin mode….. cut people, cancel games and studios, hike up PS sub plans 33%, focus on GAAS game which are high risk high reward.

 

[hemo memo]

Good luck to them. Clearly even a market leader feels the pinch of the current global economy

The jokes write themselves at this point.

 

[Kadve]

Unless it craters, seems the next big thing is PvE experiences with extremely unobtrusive monetization.

Back to the Late 90s/Early 2000s "Deathmatch" era i guess.

 

[mckmas8808]

Read this. What is in jeopardy is the AAA bloat games, not the whole industry.

"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.

Delivering and sustaining social, online experiences – allowing PlayStation gamers to explore our worlds in different ways – as well as launching games on additional devices such as PC and Mobile, requires a different approach and different resources."

An Important Update from PlayStation Studios

Today, Sony Interactive Entertainment initiated a reduction in our workforce – including within PlayStation Studios – and I wanted to talk about the impact that will have. These decisions have been extremely difficult, but they are necessary, and I think it’s important to be transparent: The...

sonyinteractive.com

Sounds like they have to go hard on PC releases and GAAS. They're literally explaining that continuing with the same approach is not an option.

I don't think that's saying what you think it's saying.

Real talk: Has Sony released any good news for gamers all gen?

I cannot remember the last piece of good news they've had other than some PS5 sale figure.

Spiderman 2 just sold 10+ million units and generated over $700 million in 3 months. Is that not good news?

 

[LiquidMetal14]

The jokes write themselves at this point.

Clever. You got any more salient quips?

 

[MatrixReloaded101]

It’s not over hiring though. To make today’s AAA game you need a magnitude amount of staff; This staffing requirement is only going to exceedingly get higher in the upcoming years especially when the AAA bar reaches the billion dollar mark when Grand Theft Auto 6 releases.

Wait until "game engines" are just an AI video generator iteratively looping....a lot of jobs will be gone.

Very good points and this is exactly what I was getting at in my post.

They need workers, this gen has been very underwhelming because of the lack of output especially for the first party, so the idea that cuts needed to be made because of "over hiring" is a bs excuse. They just wanted to make the cuts to improve the sheets for the short term and I think that is clearly the main reason.

 

[Syphon Filter]

This industry is fucked.

Keep supporting GAAS trash and subscriptions. Lmfao

Buying games for 70 bucks en masse is the only fix

yes because buying movie "games" that cost a lot to make will fix the issue.

 

[Represent.]

yes because buying movie "games" that cost a lot to make will fix the issue.

what is a movie game?

 

[SaucyJack]

Guess Embracer isn't the only "bad guy", even mighty Sony has joined in on the "fun".

Sucks to see all these companies laying off staff. Hopefully the industry will get back to a more stable place soon.

So I guess where we're at is that across the industry that pretty much all of the major players have now laid off between 5-10% of their workforce.

It sucks but clearly there's some consistent structural economic issues that the needs to be addressed across the industry.

It should also serve as a reminder for all of us that all of these companies are commercial enterprises that need to deliver profitability to their shareholders.

 

[thicc_girls_are_teh_best]

We don't talk about that one.

Spoiler

Twinkle Riot can still get it, though

 

[ChiefDada]

Who else but adamsapple to break this particular news to us

Anyways... I feel for all devs throughout the industry. Scary times.

 

[Fabieter]

what is a movie game?

Some people dislike stories in video games, and while I agree that not every game requires one, certain games could significantly benefit from a more elaborate narrative.

 

[Represent.]

Some people dislike stories in video games, and while I agree that not every game requires one, certain games could significantly benefit from a more elaborate narrative.

"movie games" ive come to realize mean anything with self respecting production values and a good story.

 

[mrBarrelNut]

Why?

What's happening in this industry?

Well, the times are bad and the business is not growing? Also, the PS5 sales are expected to decline in 2024?

 

[FoxMcChief]

Wait until "game engines" are just an AI video generator iteratively looping....a lot of jobs will be gone.

Hopefully that means more games and faster then.

 

[GoldenEye98]

Hopefully that means more games and faster then.

It absolutely will and is probably needed to be frank. The status quo isn't economical....certainly not for AAA games.

 

[DAHGAMING]

More fun for this gen, we hear more about job loss, change of strategy, gaas, than actual games now days. This gen is real dog shit, think my next gen is going to be plugging my 360 and PS3 back in and replaying that era, my memorys so shit it will be like the first time anyway.

 

[ReBurn]

Record revenue, Helldivers 2 selling gangbusters, and the gaming division has made about $2 billion profit per year since 2016 or 2017 and one of the COVID years was $3 billion profit. Add it up and that’s probably around $15 billion profit.

And just like other tech companies and MS who gutted people stemming from the Activision post merger fallout, Sony is no different.

Cost savings and profit first. So for all the MS/Activision ragging, Sony does it too.

Record revenue trending opposite of record low margin is what is driving Sony to do this. PlayStation profitability has been in decline for some time now and it dropped below 6% margin during what was intended to be the biggest holiday quarter of the PS5's lifecycle to date. Anyone who read the quarterly Sony results and thought they were in awesome shape either didn't understand the financials or just didn't want to believe that Sony could be vulnerable.

Unfortunately the reality is that firing people is often the most direct form of cost savings out there, which is why companies do it first these days. Companies already trimmed a lot of the other fat during the covid shutdowns. They need more than buying cheaper toilet paper and coffee to turn things around.

 

[Lumpyoatmeal]

GTA is a different beast entirely and shouldn’t be comparable.

I agree with you, but developers and publishers are going to have no choice but to compete with it.

 

[adamsapple]

How do we know it was a scummy move? If he wanted to personally see what they have been working on, and came away believing their work to date did not justify continuing to move forward, would closing the studio be scummy or a reasonable decision?

Obviously I can't say why the decision was made, but it is entirely possible the visit was their chance to prove their value and they dropped the ball.

You don't make a decision like that in 5 days.

 

[Jesb]

The industry I fear is gonna be void of talent soon. Who would want to get into videogame development today.

 

[NickFire]

You don't make a decision like that in 5 days.

You absolutely could if there was a mandate to cut costs, especially if you were already considering them as a possible cut.

 

[FF:Enhanced_Reality]

How do we know it was a scummy move? If he wanted to personally see what they have been working on, and came away believing their work to date did not justify continuing to move forward, would closing the studio be scummy or a reasonable decision?

Obviously I can't say why the decision was made, but it is entirely possible the visit was their chance to prove their value and they dropped the ball.

A similar thing happened in 2019 when they closed down the SingStar team and had some other lay offs.

Honestly, I could see this coming but not quite to the extent. Media Molecule and Sony London feel like they're running on good will at this point. At the end of the day, they are a business, not a charity and Dream's didn't light the world on fire, nor did Blood and Truth.

I think Sony have made a lot of mistakes these past few year and this is the start of rectifying some of them.

 

[thicc_girls_are_teh_best]

I don't think that's saying what you think it's saying.



Spiderman 2 just sold 10+ million units and generated over $700 million in 3 months. Is that not good news?

Also: GT7, HFW, Burning Shores, Kena, Helldivers 2, GOW Ragnarok, PSVR2 (the tech itself is amazing; support isn't 100% there though), PS Portal (also impressive tech), Rift Apart, etc.

People hear some bad news and it's suddenly like everything's been bad for years.

 

[Elios83]

Seems like a transition period for the industry where adjustments are needed to avoid things becoming completely not sustainable in the long term.
Hopefully people affected can find a new job soon.
Personally I think that development cycles have become too long, taking 5-6 years to ship a single game is too long and new production methods to develop games have to be found.
It's obviously a more complex problem than just making smaller, less ambitious titles with lower production values because without experiences that push forward the medium the whole thing is going to stagnate.

Good luck to the well paid executives

 

[StreetsofBeige]

Seems like a transition period for the industry where adjustments are needed to avoid things becoming completely not sustainable in the long term.
Hopefully people affected can find a new job soon.
Personally I think that development cycles have become too long, taking 5-6 years to ship a single game is too long and new methods/production methods to develop games have to be found.
It's obviously a more complex problem than just making smaller, less ambitious titles with lower production values because without experiences that push forward the medium the whole thing is going to stagnate.

Good look to the well paid executives

The bigger games taking forever with big budgets are becoming all or nothing kinds of projects.

Back in the 90s up to part of the 2010s, you had a lot of studios cranking out games every two years. Much less risk as you got overall cheaper dev costs and more opportunity for sales. The risk is spread out.

Kind of a scenario where you got a company making one chocolate bar vs another making 10. There’s always more safety to spread out sales across big and small sellers. The only drawback is you’re not going to get 10 giant sellers. There will be some bad ones.

The company with one chocolate bar is a lot more risky to rely on for sales. BUT if it catches fire (like a Fortnite out of nowhere) that company is now skewed entirely on a huge money maker. Like hitting the lottery.

 

[nial]

Concord will be here to save SIE, Men_in_Boxes redemption upcoming.

 

[twilo99]

Slicing fat with a smile .. my kinda guy

 

[THE:MILKMAN]

Afraid this was telegraphed when we found out their stock lost $10 billion last week.

Hopefully those affected have had enough time to sort another job out. I'm guessing the likes of MM are preparing for the worst......

 

[dolabla]

More fun for this gen, we hear more about job loss, change of strategy, gaas, than actual games now days. This gen is real dog shit, think my next gen is going to be plugging my 360 and PS3 back in and replaying that era, my memorys so shit it will be like the first time anyway.

Yep. This gen sucks. I find myself playing PS3/360 gen games more and more.

 

[adamsapple]

You absolutely could if there was a mandate to cut costs, especially if you were already considering them as a possible cut.

Again, the decision to close an entire studio isn't something that is made in a 5 day's notice. That'd be ridiculous.

 

[Ass of Can Whooping]

Again, the decision to close an entire studio isn't something that is made in a 5 day's notice. That'd be ridiculous.

I'd do it

 

[skit_data]

Those people in that picture with Jim Ryan aren't even from London Studios if I understand it correctly so don't know why everyone bring that one up

Edit: Actually at least some probably are from there, so it actually is kinda shitty no matter what

 

[nial]

Is anyone going to mention the fact that nothing of note happened to their Japanese workforce? Even with Hiroki Totoki (Chairman) and Jim Ryan (Representative Director and President) being the heads of SIEI in Tokyo, they cannot do much there.