Sony has announced it will lay off about 900 employees in its PlayStation unit, making up around eight percent of its global workforce.

In an email to employees, released publicly by the company, president and CEO Jim Ryan said: “After careful consideration and many leadership discussions over several months, it has become clear changes need to be made to continue to grow the business and develop the company.”

Multiple UK based PlayStation studios are to be affected by the cuts. Sony announced it will close its London Studio, which develops its virtual reality games. Its UK based Firesprite studio is also affected.

Hermen Hulst, head of PlayStation Studios, also confirmed that PlayStation’s leading US based studios, including Insomniac Games and Naughty Dog, are also affected alongside Sony’s Guerrilla studio based in the Netherlands.

“We had to step back, look at our business holistically, and move forward focusing on the long-term sustainability of the company and delivering the best experiences possible for our community,” Ryan said.

Sony recently missed its sales target for its popular PlayStation 5 console. The US company set a sales target of 25 million PlayStation 5s before the end of March 2024, but the company has only sold 16.4 million consoles in its current financial year.

The move follows multiple other layoff announcements across the gaming industry.

In January, Microsoft laid off 1,900 Activision Blizzard and Xbox employees. Unity Software also announced last month that it will cut “approximately 1,800 employees,” which it says equates to about 25% of its current workforce.

The gaming software market was worth $197bn in 2021 and will become a $470bn industry by 2030, according to GlobalData estimates. 

Mobile gaming will be the dominant segment, accounting for more than 50% of global gaming software revenues by 2030. 

Video games will likely see robust mergers and acquisitions activity in the next five years, according to GlobalData’s Video Games (2022) report.