Sony Interactive Entertainment lays off 900 people
sonyinteractive.com
sonyinteractive.com
Setting aside the things I'm feeling when reading this, I'm trying to piece together a picture, for my own curiosity, of this trend, and I'm left with many questions, among those:
* Are all these layoffs meaningfully based in some hard economic data (e.g. end of ZIRP and some real analytical assessments of the direction of the economy)?
* Or, is this some form of corporate herd mentality?
There's no malice in my comment, but I often teeter back and forth between "these collections of smart people are surely doing some data-anchored homework before making these decisions" and "nobody knows what we're doing and the easiest thing is to immediately increase profit, like my friends at that other company!"
I just want to form a more realistic and objective image of how these massive companies operate, whether or not that image may seem optimistic or cynical.
It's not just "all my friends are doing it": the number of people that are board members of any company are a shallow pool. Board members often sit on multiple companies. Similarly large "professional" shareholders that take an active interest in corporate planning, have large voting blocks of corporate stock, and have an easy word with the board (if not a de facto seat on the board) are a relatively shallow pool (with some overlap).
Sometimes "all my friends are doing it" is the same people telling both the goose and the gander what's good for it. Even when it isn't necessarily the exact same individual person, it can be the same "families" (sometimes literally, there is a lot of inherited wealth in the board member class, but sometimes just metaphorically in cases like mutual/hedge fund management groups that use different hands-on managers for different companies in the same industry but still have shared short term goals for their funds).
Again, herd mentality is rarely the sole reason (and legally cannot be the sole stated reason because that would invite "easy" anti-trust investigations if regulators aren't asleep at the wheel), but underestimating it as a factor risks ignoring the way companies are built and the contributing factors of sometimes deeply and surprisingly shallow board and "activist" investor pools. (It also risks ignoring the warning signs of hard anti-trust investigations that could be worth doing, if regulators aren't asleep at the wheel.)
if we're discussing an individual company, it depends.
what i do know from some companies that i work with is this:
- some have massively over-hired during covid and now they're trimming
- some have been greatly affected by inflation/interest rates
- some have seen sales nosedive for various reasons
- some have simply replaced roles with AI
https://www.ft.com/content/cc6bd66c-6341-4367-85cc-86d274102...
> Game over? Industry suffers slowdown after decades-long winning streak
> Sales growth in consoles and mobile apps hit as a darkening mood spreads across $200bn video games sector
> The $200bn video games industry is reckoning with its biggest slowdown in 30 years, as the huge growth driven by smartphone gaming and the latest generation of consoles reaches its limits.
> Hardware sales are slowing, with Sony cutting its forecast for PlayStation 5 sales this week. Consumer spending on mobile gaming declined last year, down 2 per cent to $107.3bn according to Data.ai, which forecasts low single-digit growth in 2024.
In particular it lists some other studios not mentioned in this one:
The US based studios and groups impacted by a reduction in workforce are:
* Insomniac Games, Naughty Dog, as well as our Technology, Creative, and Support teams
In UK and European based studios, it is proposed:
* That PlayStation Studios’ London Studio will close in its entirety;
* That there will be reductions in Guerrilla and FirespriteOnce upon a time I visited their SOHO offices.
Yeah, it's only the 15th best selling console after all :/
Sounds like something else might be wrong if you can sell +50 million units and still not consider it "selling well" or making a profit.
That's one way to frame it. Another is that the PS5 is the worst-selling Playstation console (non-handheld) ever. It has not met expectations at all.
It is selling pretty well too, I think I read even better than PS4 if you align their launches?
I doubt a company would ever announce a console is EOL befor their next one is on the shelves. Are you sure that wasn’t about the PS4?
It could still be selling well by every metric except for a higher expected sales than it should be. Especially since they also increased the prices in a few markets.
They didn't "announce" this, I don't know why people keep parroting it. Why would a company say that about the console they're still trying to sell?
They said it was entering the latter stage of its life cycle. In other words, it's at the halfway point. And yeah, we're almost at 3.5 years which is the halfway point of the typical 7 year console life cycle.
Never came back on my radar.
I mean, it'd be great if Sony would get on board with allowing smaller devs to join the Playstation platform but the amount of literal gatekeeping that Sony keeps in the stable is disgusting to watch.
Hell, I'd love to be able to dev myself for it but nope! Sony gatekeeps me from running my own code on my own metal.
https://www.ign.com/articles/sony-commits-to-launch-just-six...
It seems many game companies thought they could build the next Fortnite/Destiny, but 1) it’s hard to start with that goal and move backwards, and 2) attention is a scarce resource, with most people only having enough room in their lives for a single live service game.
It's also very likely that live service revenue was unusually high starting in 2020, due to everyone stuck at home craving social interaction. So just like FAANG companies over-hiring during that period, the games industry was due for a correction.
(It's also fascinating on a longer scale of history with Sony being a huge investor in Live Service Games as Sony Online Entertainment in the 90s through to 2015 and spinning that off to Daybreak Games in a previous lull in Live Service Games revenue. History repeats itself in strange echoes.)
IIRC the insomniac leak contained some internal slides that claimed at least ~6 million full-price sales of Spiderman 2 would be needed to break even on development costs.
I got a PS5 last year (my first non portable console since the N64) and what I was expecting was the old feeling of playing with friends on a big tv. The only game I enjoy doing that in is FIFA/FC24. Unfortunately my gf is not into it. Other than that… not a lot to choose from. I ended up building a PC and now I’m considering selling the ps5. What’s the point of having this in the living room if I can only play alone? The games are basically the same now. Pc has more games, especially indie, I can also use the pc for other things, and I don’t have to hoard the living room for my individualistic activities. Also shooters with a controllers is just frustrating when you’ve played with a mouse.
Namely, Senran Kagura: Estival Versus. Graphics are glitchy enough it's not worth the trouble.
Which is a SHAME, because it was my favorite guilty pleasure on the PS4
[0] https://www.ign.com/articles/ps5-entering-the-latter-stage-o... [1] https://en.wikipedia.org/wiki/Category:PlayStation_5-only_ga...
Then you need to start from the scratch with new console, new SDKs, new bugs and so on.
That being said:
- sales have been inflated by pandemic
- most games are released on older gen consoles too
- PS5 has too little console-selling exclusives.
- Even of those that have, they are pretty much all sequels to PS4 selling games: spiderman TWO, horizon TWO, God of War TWO. Safe for Bloodborne all these first 4 years games got a PC release, so not really that exclusive
- Graphical generation jump is just "meh". Especially if you play on your sofa few meters from your TV, you're hardly to appreciate higher resolution, because besides higher resolution the PS5 only offers marginal graphical updates to games that you really need to look for (shades, reflections) and are highly dependent on the effort of the developers
[1] https://store.steampowered.com/franchise/playstationstudios
Is this a downturn in gaming and revenue and actually needing to do this to stay afloat or just the company seeing lower than expected sales but still profitable.
I know that they announced that the PS5 sold lower than expected but they also mentioned exploring other platforms for their games.
Playstation has a reputation of all of their games doing well, the hardware selling well. So if even they need to downsize what does that mean for the industry.
The industry as a whole is facing huge financial pressures, Sony included.
We've also seen a bunch of consolidation in recent years, which in itself makes some positions redundant.
However I did not think gaming did the same thing. Especially given the long development timelines for games now it wouldn't have made as much sense. It isn't like they could hire during the boom and expect to get anything out within a reasonable amount of time.
Is there anything out there talking about gaming also doing a big hiring push during covid?
Not all projects have long development-time, and not all jobs in gaming are for developers. And in the first place, nobody knew how long the pandemia and the gaming-hype would last.
> It isn't like they could hire during the boom and expect to get anything out within a reasonable amount of time.
Actually you can, they don't need to be masterpieces, but churning out something in 18+ Months if you are an already established company is not that hard. Especially when you already have some projects with years of planning in your archive. And there are also many projects which are getting abandoned half-way when it turns out to be a bad case.
Check out GameDiscoverCo on substack - Simon's mentioned it a few times. Unfortunately, substack seems to be having technical difficulties, so I can't link anything.
And then these guys mention it a couple of times in their podcast: https://gamecraftpod.com/
Which is to say, even if they watch it they'll grumble and be annoyed and will not listen.
But instead of making a gazillion-and-one dollars, like they "forecasted", they only made a gazillion dollars.
So, in the interest of "maximising shareholder value" and maintaining "growth", the board has now concluded that heads must roll for this.
Part of the problem, of course, is that the pandemic and the economic shutdowns hugely impacted economic output in a way that couldn't be magicked away by printing money and handing out furlough payments - all the furloughed and unemployed workers and shuttered still produced nothing during that time, that unusued capacity could not be saved up for later, and so it wasn't possible for everyone to continue buying the same amount of stuff as before even though goverments in the developed world tried to create the illusion they could. This also created a temporary increase in demand in certain sectors, like video games, which has since vanished.
I'm a big believer in co-operatives and shared ownership, but then I should probably also face the reality that if you make it too comfortable for some people, they would just grow fat/lazy and not work at all, so perhaps all this "fire under your arse" and competition is good for us all.
A calculation Nathan Brown (Hit Points newsletter) made a year ago when Microsoft laid off 10% of its workforce:
> According to the salary-tracking website Comparably, the median Microsoft salary is $162,818 per year. Blowing the dust off the trusty Hit Points calculator, it appears that if Microsoft pulled out of the Activision deal and put that $68.7bn towards employee salaries instead, it could keep the 10,000 staff it is laying off today on the books for over 41 years.
(substack seems to be croaking, so no direct link, sorry)
Again, Microsoft is not a charity, but it does make you think: they'd rather be a monopoly than show some loyalty to their workers.
(And I have to say they are probably my favourite big publisher. No extra DRM, online requirements or anything. Just a custom EULA)
> In other countries, we will begin conversations with those who are potentially at risk or impacted as a result of this proposed course of action.
what is a "next career support program"? Is it something specific to Japan/required by Japanese law after a round of layoffs?
Why not do this for every country? This type of support should be required for mass layoffs.
I understand the strategic impact of such large decisions but I don't understand why these types of programs can't be implemented in the 21st century even if laws need to necessitate such programs existence.
They're always one of two things: 1) the company is failing and we need to do this to stay afloat; or 2) the board thinks we can make more money by doing a round of layoffs and have determined that the negative repercussions of this are worth that money.
I wasn't able to easily find revenue numbers on SIE, just on Sony as a whole, but it seems pretty obvious this is a #2. It doesn't matter how many "stay agile" or other buzzwords they toss out. When you boil it down, it's about a lot of people losing their livelihoods so a few extremely rich people can be a tiny fraction richer.
There are a lot more than 900 shareholders, though. Including probably many of those laid off.
> losing their livelihoods
I know that this is a real expression, and you’re using it correctly of course, but the caliber of employees we are talking about here are not ending up begging on the streets. They’re being forced to interview for other jobs where their talents might be put to better use. A bummer but not the end of the world. I’d prefer this to having a bunch of dysfunctional, uncompetitive companies that did makework programs to avoid having difficult conversations.
Speaking as someone who has in the past been laid off in a down economy, when you get laid off while all of the other companies in your industry are also doing layoffs, the world looks bleak as hell.
You can interview as much as you want, but chances are you have more competition for fewer jobs than you ever have before.
So every company with a legal team errs on the side of saying as little as possible.
Also does anyone know if there's something like HN or YC for gamedev?
Newgrounds: https://www.newgrounds.com/bbs
Gamedev.net: https://www.gamedev.net/forums/
I've heard mixed reviews of the game development Stack Exchange: https://gamedev.stackexchange.com/
But there's also separate SE sites or Stack Overflow tags for the major components of game development like 3D art (Blender) and toolkits (godot, unity, etc).
The YC for gamedev is Kickstarter or shopping a game around to publishers.
"Roughly 8,500 video game industry workers were laid off in 2022, according to a layoff tracker created by video game artist Farhan Noor. That number jumped to 10,500 in 2023. Layoffs in 2024 are outpacing those numbers, with more than 6,000 people laid off from their video game industry jobs just 90 days into the year." https://publish.obsidian.md/vg-layoffs/Archive/2024
God I just wish one executive had the balls to say, "yeah we're culling 8% of our staff largely randomly because we estimated our dead weight is greater than that." It would at least treat employees as adults that can have adult conversations and take bad news. The only hard decision was where to celebrate after because the stock bump.
Employees could see things for what those are. Spelling it out will not make any difference for them. For executive statement like this could be reason to join that terminated crowd.
So because "it already happened" we should just "get over it and stop making a big deal?"
Unless the executive is stepping down and taking responsibility for the employees losing their jobs, it's empty platitudes.
The C-level folks that made these mistakes will do it again. And more people will suffer... will lose their jobs... and be offered thoughts and prayers.
This is not adult behavior. It's schoolyard children bully bullshit. Trying to paper over it because money is involved is just a deflection of responsibility.
You can keep making your "big deal" as much as you want. They do not give a flying fuck. They just have to be legal and that is it.
You're not wrong FpUser
Poor baby. I wonder if he can find something to do with his $4.3M annual compensation to console himself. https://simplywall.st/stocks/us/consumer-durables/nyse-sony/...
none of the people swinging the axe face any pain for their bad decisions. people under them working as hard as they could face the consequences of decisions made above their head and out of their control.
no contrition, no sincerity, no humanity. the C level has failed us and we keep celebrating their narcissism and psychopathy.
we cannot keep celebrating this behavior. it needs to have negative financial consequences or the "bad optics" will forever just be a cost of doing business
we need adults in charge and we have pathetic children
CEOs have reputations, and they do better with their future opportunities when they “turn around” a company or grow it, vs liquidate one. And ‘growing’ includes the situation where the 90% who aren’t laid off share in that success.
But it’s weird to me to imply that executives should be godlike in their ability to predict the future such that downsizing in any form isn’t ever necessary (and that any failure to do so is a sin that needs to be punished). If a ship encounters rough waters and is in danger of not making it to their destination (in this case, ROI), the captain and first mate shouldn’t automatically jump overboard in contrition. (yes, in this metaphor, they are throwing a few of the crew overboard, but I think severance = lifeboats so I’m ok with it). They should do what it takes to preserve the ship. That’s their job. (And neither in the metaphor nor real life is “eliminating most of the crew” something they do, everyone accepts that the crew are valuable, and to be preserved)
I think it’s unrealistic to expect any corporate governance to meet your apparent criteria, that in the event of any RIF the C-suite must all be sacked and their personal wealth set to the median wealth of the rank-and-file at that company.
Nobody is stopping anyone from setting up such a company and having that in contractual agreements with all their executives, though. It would be an interesting experiment.
You think there is not one manager involved in layoffs that faced personal grief over firing people?
> You think there is not one manager involved in layoffs that faced personal grief over firing people?
I am 100% confident that the people who feel "personal grief" over this are extremely well compensated. They have a secure housing situation where they are not afraid of "where will I sleep, where will my next meal come from?"
Trivializing the damage these people are inflicting on others for no reason other than "the board wants more money" is disrespectful at best. it's morally reprehensible to anybody with a functioning conscience who understands ethics.
The only alternative to having layoffs be a fact of life and business is for companies to provide “jobs for life” regardless of profitability or business results. Businesses who do this don’t exist outside of uncompetitive state-owned firms which need to be propped up by state spending (taxpayers).
I worked at a tech startup in NYC that employed many local people in several different non-technical blue collar roles. They were some of the first to go when things weren't even over but sudden changes started occurring. Last time we ever saw the cleaning ladies was at a holiday party. All the developers still had jobs (me included) but the other team yeah we are moving what they do to another state. Ok now switch everything to mongodb and we have to decentralize our API because it's gotta run over there.
Unprecedented fad layoffs are having downstream implications on the job market, my experience was almost 8yrs ago. Yes most of the developers will be fine but the people that are on the margins will suffer first.
> The only alternative to having layoffs be a fact of life and business is for companies to provide “jobs for life”
What I want is less "thank you for your sacrifice" and more "this happened on my watch. I made a bad call. I am doing X so that the remaining hardworking people can continue the mission with/without me"
Was it just a bad luck / market forces, or was it an unplanned / risky bet?
That to me determines with/without. Sunshine cures all.
Let’s suppose CEOs would all sign onto such a pledge, that all RIFs would clean out the whole C-suite, or CEO, whatever. Do you think it might also dramatically limit the upside, though, if a CEO knew they could only hire enough staff that they could only wait to shrink by attrition if a bet didn’t pan out.
I guess I see the role of a CEO as making bets. I’m not saying necessarily “risky bets” but if you have to guarantee never having a layoff, I think you’ll be very conservative. There are businesses that work sort of like that (It’s a little funny that we are discussing Sony, because if I understand correctly traditional Japanese business culture was a lot like that).
If someone wants pretty-much guaranteed steady work at the trade off of not a great deal of growth potential or possible equity, I’d recommend they don’t work in tech. Government work, utilities, etc. are far better suited for that kind of risk/reward preference.