"I know none of this is easy news to hear, particularly with colleagues and friends departing SIE." Sony closes two PlayStation studios and shutters Concord for good

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The PlayStation maker is shutting down both Neon Koi and Firewalk Studios.

Concord
Firewalk Studios is being closed, and its ill-fated hero shooter Concord has been officially shuttered forever. (Image credit: PlayStation Studios)

What you need to know

  • Sony has announced it's closing two of its PlayStation studios in an internal email from Sony Interactive Entertainment CEO Herman Hulst to employees that was published publicly by the company.
  • The studios being shuttered are Neon Koi and Firewalk Studios. The former was developing an action mobile game, while the latter created the ill-fated PS5 and Windows PC hero shooter Concord.
  • Hulst wrote that Sony ultimately came to the conclusion that these decisions were "the right ones to strengthen the organization," with the company moving to "concentrate on titles that are in-line with PlayStation Studios’ pedigree and have the potential to reach more players globally."
  • Reportedly, 210 employees in total have been affected, with 172 employees at Firewalk and 38 at Neon Koi losing their jobs. Hulst did note that Sony will work to move affected workers to other PlayStation positions "where possible," however.

Yet again, I'm reporting on studio closures and developer layoffs in the midst of what have been some of the most tumultuous years in the gaming industry's history.

The latest cuts come from Sony, the creator of the PlayStation brand and the company that oversees its first-party game projects. Specifically, the firm is shutting down two studios — mobile game developer Neon Koi and Firewalk Studios — with the former's unannounced action game and the latter's unsuccessful hero shooter Concord both cancelled and sunset permanently.

An internal email from Sony Interactive Entertainment CEO Herman Hulst to employees published publicly reveals that Neon Koi is being shuttered as part of an approach to "concentrate on titles that are in-line with PlayStation Studios’ pedigree and have the potential to reach more players globally." The decision to close Firewalk and retire Concord, meanwhile, came after Sony "spent considerable time these past few months exploring all our options" and came to the conclusion that there wasn't a better alternative.

"After much thought, we have determined the best path forward is to permanently sunset the game and close the studio," wrote Hulst.   "I want to thank all of Firewalk for their craftsmanship, creative spirit and dedication."

Concord was barely live for a week before Sony put it on ice due to its abysmal performance. (Image credit: PlayStation Publishing LLC)

Concord was sensationally taken offline in early September less than two weeks after its launch, with the game completely failing to attract an audience from the oversaturated hero shooter market. Refunds were given to all players immediately afterwards, and many speculated the title may never return. Now, those predictions have come true.

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A spokesperson reportedly told Bloomberg News that 210 developers across the two studios are losing their jobs in total, with 172 employees at Firewalk and 38 at Neon Koi. The internal email does indicate Sony will attempt to move workers to other PlayStation teams "where possible," though doesn't include any specific details.

"I know none of this is easy news to hear, particularly with colleagues and friends departing SIE. Both decisions were given serious thought, and ultimately, we feel they are the right ones to strengthen the organization," wrote Hulst. "Neon Koi and Firewalk were home to many talented individuals, and we will work to find placement for some of those impacted within our global community of studios where possible."

These closures come eight months after Sony laid off 900 PlayStation Studios employees in February, and three after Destiny 2 maker Bungie cut 220 developers as it integrated further into PlayStation. Sony recently acquired the studio after announcing its plan to buy it for $3.6 billion in 2022.

Analysis: What a colossal shame

Earlier this year, 220 cuts were made within Destiny 2 developer Bungie as it integrated further into PlayStation. (Image credit: Bungie)

It's devastating to see even more gaming industry layoffs this year after well over 20,000 jobs were already cut in 2023 and 2024, but here we are. Admittedly, I'm not surprised to see Concord itself shut down forever — I always thought the game was okay, but it's clear that it didn't do anything to stand out from the strong competition in the market — but it's awful to see Firewalk Studios itself get axed from the PlayStation Studios lineup. The developers at Neon Koi will never get to release the game they were working on, either, which is a shame.

As always, both my thoughts and my heart go out to everyone affected by this decision and their families. I sincerely hope that you're able to find new positions inside PlayStation or otherwise quickly, and also hope the wider industry starts to recover sooner rather than later.

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Brendan Lowry
Brendan Lowry

Brendan Lowry is a Windows Central writer and Oakland University graduate with a burning passion for video games, of which he's been an avid fan since childhood. He's been writing for Team WC since the summer of 2017, and you'll find him doing news, editorials, reviews, and general coverage on everything gaming, Xbox, and Windows PC. His favorite game of all time is probably NieR: Automata, though Elden Ring, Fallout: New Vegas, and Team Fortress 2 are in the running, too. When he's not writing or gaming, there's a good chance he's either watching an interesting new movie or TV show or actually going outside for once. Follow him on X (Twitter).

1 Comment Comment from the forums
  • fjtorres5591
    It looks to be time to bring out the elephant in the room: BURN RATE.

    The traditional game financing model is broken: returns no longer outweigh costs.
    Gaming is not alone there but unlike books and video, there is no surefire way forward.

    The nature of the content business (movie, TV, books, software--especially games) makes the bulk of their day to day expenses, aka overhead but more accurately described by the startup business term: Burn rate. Because the upfront investment required by those products is speculative and in many cases (for the investors) little different from piling up the currency and lighting it up on fire.

    In the startup world, Venture capitalists understand they are speculating and, much like a roulette player at a casino, spread their bets around. The goal isn't to win every bet and get rich quick, but to win some and lose some with the hope that the wins outweigh the losses, that when they win, they WIN BIG.

    In Hollywood, the big studios typically share the expenses with outside investors so they can get more product out the door faster. Same principle, with the added caveat that they understand that what might be new and successful today might be a dated loser tomorrow. (BATGIRL, for one.) Hollywood accounting is famous for their "skill" at money management.

    Gaming's version of this is third party exclusives, especially the timed exclusives, and more recently, the upfront subsidies MS pays to get Day one rights on Game Pass. (Some are exclusive or timed, some are neither. Different cases, different deals. Some games only exist because of those subsidies.)

    For most of the past 45+ years, video games operated much lie book publishing: the creators prepared a presentation, shopped it around, and a publisher would buy it. Sometimes only the game, sometimes the game and it's IP. That model has been dying for the last decades and we are now seeing its last gasp.

    Publishers have been buying up studios for quite a while. The big publishers have all rising by buying up their "partner" studios but it has accelerated over the last decade because development has gotten more and more expensive (and not just because for pixel pimping, but that is a big part of it) and life as a mid-sized developer has gotten almost unworkable. Indies and mobile studios are hanging around because they avoid the blockbuster model like the plague. They may yet reach the end of the line but for now they are hanging on.

    How it will shake out remains unclear but one thing is certain: the drama is not even close to being over. Ubisoft and moof EMBRACER are in play. EA, lie MS, has been proactive but there may still be pain in their future.

    Nintendo got dinged this week (100 out of a 400 member studio) and now Sony bit the bullet and gave up on CONCORD. (And Bungie is shedding entire teams.)
    Square practically gave away valuable IPs just to shed the studios' operating cost.
    There *will* be winners but there will be more losers.

    The why for all this comes down to business 101: ROI.
    Investments have gotten too high, output too slow. investment times development time equals burn rate. And the returns no longer outweigh the investment, even for well reviewed product.

    Every time another closure is announced the pundits nod and admit costs need to come down but nobody wants to be the first to say how.

    Try this: coding costs must come down.
    Graphics costs must come down.
    Staff sizes must come down.
    Less releases? Maybe, but less releases likely means less revenue.
    Live service was the last great hope and it is no longer a magic bullet.

    There is one road that might help but anybody who brings it up is going to be tarrred and feathered. Generative software. Nobody will admit using it but odds are, many already are. eventually some will admit it.

    The old ways are untenable; too expensive.
    Something needs to change.
    What? TBD.
    Reply