It should have been a victorious few weeks for Sony Group Corp.'s PlayStation 5. Final Fantasy VII Rebirth, arguably the console's first must-have exclusive title, has been released to rave reviews. Microsoft Corp. has just announced it will allow games previously exclusive to its Xbox machine on rival platforms, tantamount to an admission of defeat in the console wars. And reports swirled that a successor to Nintendo Co.'s Switch is still more than a year away.
Incoming PlayStation Chairman Says They Don’t Understand “Overall Growth And Sustainable Profitability”
14.02.2024 - 13:51 / gameranx.com / Jim Ryan / Playstation Studios
Sony President, COO and CFO Hiroki Totoki was asked about his assessment of the company’s PlayStation division. He did not mince words.
We’ll go straight to the big quote in our headline. As reported by Video Games Chronicle, he said this when asked about their gaming side in an earnings call:
“It’s been about four months [since I became Chairman] and I’m trying to demonstrate leadership and have as many meetings as possible with the management team.
I’ve also visited studios, and everyone is working really hard to fulfil their responsibility to try to optimize the business, and I understand that.
But overall growth and sustainable profitability for increasing margins… how will that translate to these goals? I don’t think people understand that deeply. I think that is the problem of the organization.”
I think we can all agree that this seems to be a harsh assessment, especially given how successful Sony has been in this console generation. But we should take his statement in their proper context.
Totoki is set to become the chairman of the PlayStation division, while also fulfilling his roles as Sony’s President, COO, and CFO. That may sound like a lot of jobs to take on, but he isn’t planning to stay on permanently, and there’s a particular reason he wants to take over.
He is assuming the post after the retirement of current PlayStation chair Jim Ryan. Jim was head of the division at a time when the company had taken a dominant position in the video game console business, clearly overtaking Xbox, and perhaps not quite matching Nintendo Switch on hardware and first party sales, but still ahead in other metrics.
But, all this talk of PlayStation’s success has been somewhat misleading. As we learned in leaked documents from the Insomniac ransomware attack, the company is not making their first party games in a sustainable manner, spending too much for too little sales of their titles. In fact, even their most successful first party games, like Marvel’s Spider-Man 2 with its now 10 million copies sold, still reflects a poor attach rate for what’s now at 50 million PlayStation 5 units sold and counting.
When news of Jim’s retirement and Hiroki’s pending entry into PlayStation was announced, we learned through the grapevine that the sentiment within Sony was that Jim had made some serious mistakes in managing the division lately. Interestingly, the main issue was not that Jim tried to block the Activision deal and failed. Rather, Jim lined up production of live service games that are taking too long to release, and they spent too much up front on mergers and acquisitions, such as Bungie, too much all at once.
Lastly, as noted in Sony’s report in today’s earnings call, they will miss their target to sell 25
The website gametalkz.com is an aggregator of news from open sources. The source is indicated at the beginning and at the end of the announcement. You can send a complaint on the news if you find it unreliable.
Top Authors
Popular Topics
videogameschronicle.com
29.02.2024 / 06:53
Insomniac calls this week’s layoffs ‘a solemn and unprecedented moment’ for the studio
Insomniac Games has released a public statement in response to layoffs at the studio announced this week by parent company Sony Interactive Entertainment.
radiotimes.com
28.02.2024 / 14:15
PlayStation layoffs explained: Which studios are impacted and why?
It's a distressing time for the gaming industry. Yesterday, Sony Interactive Entertainment revealed it would be laying off a huge number of employees across the globe and closing a significant studio «in its entirety».
gadgets.ndtv.com
28.02.2024 / 07:15
Sony to Cut 900 Jobs at PlayStation, Shut London Studio; Naughty Dog, Insomniac Hit With Layoffs
Japan's Sony is cutting about 900 jobs at its PlayStation unit and shutting a studio in London, it said on Tuesday as the videogame industry struggles to recover from a post-pandemic slump.
gamerant.com
27.02.2024 / 18:40
PlayStation is Laying Off About 900 People
PlayStation has announced layoffs across multiple studios, continuing a troubling trend for the gaming sector in 2024. The move is just the latest set of mass layoffs the gaming industry has faced in the past year. With PlayStation's latest announcement, it appears this trend is unlikely to slow down in the months ahead.
thegamer.com
27.02.2024 / 18:19
Twisted Metal Live Service Reportedly Cancelled Following PlayStation Layoffs
A new Twisted Metal project has reportedly been cancelled as part of today's layoffs across Sony Interactive Entertainment. The Twisted Metal game, which was said to be a live service, was rumoured to be in developed at Firesprite, a Sony-owned studio that is affected by today's layoffs.
rockpapershotgun.com
27.02.2024 / 16:41
Sony announce 900 layoffs across Naughty Dog, Guerilla, Insomniac and PlayStation studios worldwide
Another day, another videogame company jettisoning a large number of people "who have contributed to our success" so as to position themselves for growth in the face of "challenging times". Today it's Sony's turn with the axe: the PlayStation publisher have announced plans to reduce their global workforce by about 8% or 900 people, so as "to future ready ourselves to set the business up for what lies ahead", in the words of outgoing president and CEO Jim Ryan.
thesixthaxis.com
27.02.2024 / 16:21
Mass layoffs hit Sony Interactive Entertainment – London Studio shutting down, Naughty Dog & Insomniac also affected
Sony has announced mass layoffs across PlayStation Studios with 8% or around 900 people set to be made redundant across their worldwide studios. This will include the complete shutdown of London Studio, while Naughty Dog, Insomniac and other studios are affected as well.
polygon.com
27.02.2024 / 15:31
PlayStation laying off 900 people, closing London Studio entirely
Sony Interactive Entertainment is laying off around 900 workers, or 8% of the company, outgoing president and CEO Jim Ryan said in a news release published on Tuesday. Employees from all regions — North America; Europe, the Middle East, and Africa; Japan; and Asia-Pacific — are impacted by the cuts, including several PlayStation development studios. London Studio, the in-house team that created the SingStar series, will close entirely, Ryan said.
eurogamer.net
27.02.2024 / 15:29
Sony laying off 900 PlayStation employees, London Studio to close in its entirety
Sony is to lay off 900 people, equating to eight percent of its workforce. This reduction will see PlayStation Studios' London Studio close in its entirety, plus reductions made within Sony's Firesprite studio. There will also be reductions in various functions across SIE in the UK
eurogamer.net
27.02.2024 / 15:29
PlayStation Studios head confirms projects cancelled in wake of layoffs
PlayStation Studios head Hermen Hulst has confirmed that some projects have been cancelled in the wake of layoffs across Sony Interactive Entertainment.
digitaltrends.com
27.02.2024 / 15:05
PlayStation lays off 900 people and shuts down London Studio
Sony is the latest company in the video game industry to announce massive layoffs in 2024. We’ve learned that Sony Interactive Entertainment is letting go of about 900 people across several studios; PlayStation’s London Studio will shut down as a result.