Sony said Tuesday it is laying off 8% of PlayStation's global workforce, becoming the latest tech company to cut jobs.
PlayStation boss Jim Ryan called the move “sad news” and said the cut would affect 900 people worldwide, including at video game studios.
PlayStation London studio, founded in 2002 and specializing in virtual reality gaming projects, will close its doors completely, the Japanese entertainment giant said.
According to a separate statement, US studios Insomniac Games and Naughty Dog are also affected.
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 our portfolio, evaluated projects at various stages of development and decided that some of them would not move forward,” he said.
“Our philosophy has always been to encourage creative experimentation. Sometimes big ideas don’t become big games,” Mr. Hulst added.
Strong competition for the PS5
The 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 of sales.
Sony's video game business saw great success with Marvel's Spider-Man 2, which released on the PS5 in October last year and became the fastest-selling PlayStation Studios game within 24 hours of its release.
But the PlayStation 5 faces stiff competition from the Nintendo Switch and could intensify its rivalry with Microsoft's Xbox after the American company acquired Call of Duty publisher Activision Blizzard.
In January, Microsoft announced it would lay off 1,900 employees, or 8% of staff, in its “games” division to consolidate its acquisition of Activision.
According to layoffs.fyi, a California-based website that tracks industry developments, tech companies lost a total of 260,000 jobs last year.
According to the website, there have been almost 44,000 layoffs in 171 companies since the beginning of the year.