3 ms·

I really wish we had more concrete information on what caused this. Is this a downturn in gaming and revenue and actually needing to do this to stay afloat or

I really wish we had more concrete information on what caused this. 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.

opyate 3y ago
Of course they're still profitable. 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.
- malfist 3y ago
  But not their heads, mind you. After all, it's the fault of the peons that got hired for getting hired. No one else is to blame for growing the company too fast.
- coldpie 3y ago
  Good news, these 900 employees that were collectively terminated can now individually bargain the terms of their layoff! ...Right?
- makomk 3y ago
  It's not just a question of shareholder value and profits always needing to go up - there are real society-wide opportunity costs to companies like Sony continuing as before. All of the workers they employ and the resources they use are workers and resources that cannot instead be producing other things, and the increase in interest rates that's lead to all these layoff is essentially a signal that those opportunity costs are higher and the bar for economic activity to be viable is higher than before. 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.
  - opyate 3y ago
    Sure, there are these macro-economic factors, and Sony is not a charity, but it still sickens me that CEOs get millions in comp (and others in C-suite, and exec bonuses), board members get hundreds of thousands for sitting in on a few meetings a year, yet the little guy suffers. 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.
warp 3y ago
Gaming saw a huge increase during the COVID-19 pandemic, and companies staffed up, because they either had a bunch more money coming in or it was easy to get investments. All these gaming layoffs to me seem like a correction back to pre-covid levels. We've also seen a bunch of consolidation in recent years, which in itself makes some positions redundant.
- nerdjon 3y ago
  So I know a lot of the tech (non gaming) layoffs were correcting the over-hiring during covid. 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?
  - opyate 3y ago
    > Is there anything out there talking about gaming also doing a big hiring push during covid? 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/ https://gamecraftpod.com/
  - PurpleRamen 3y ago
    > Especially given the long development timelines for games now it wouldn't have made as much sense. 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.
taion 3y ago
Matthew Ball had a good essay on this about a month ago: https://www.matthewball.co/all/gaming2024 https://www.matthewball.co/all/gaming2024 The industry as a whole is facing huge financial pressures, Sony included.
toddmorey 3y ago
Really impressed by how many highly profitable companies have turned themselves inside out to arrive at this same "extremely hard decision." Either those words are a bit empty or you just have to admire recent levels of corporate bravery.
- jonhohle 3y ago
  It makes me wonder why they choose words like that. I suppose George Carlin‘s Soft Language summed it up decades ago, but PR people born after that set must have missed it.
  - pdimitar 3y ago
    People who take themselves too seriously have never appreciated being satirized. Which is to say, even if they watch it they'll grumble and be annoyed and will not listen.
bart_spoon 3y ago
My understanding is that PlayStation’s big hit games have had particularly low margins. Despite selling well, they have generally been extremely expensive to make. They’ve helped them beat Microsoft in the console war, but I don’t think it was ever sustainable.
deleted 3y ago
[deleted]
Solvency 3y ago
It's called keeping the line up. Shareholders and wealthy people like that sort of thing.

opyate 3y ago

Of course they're still profitable. 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.

malfist 3y ago
But not their heads, mind you. After all, it's the fault of the peons that got hired for getting hired. No one else is to blame for growing the company too fast.
coldpie 3y ago
Good news, these 900 employees that were collectively terminated can now individually bargain the terms of their layoff! ...Right?
makomk 3y ago
It's not just a question of shareholder value and profits always needing to go up - there are real society-wide opportunity costs to companies like Sony continuing as before. All of the workers they employ and the resources they use are workers and resources that cannot instead be producing other things, and the increase in interest rates that's lead to all these layoff is essentially a signal that those opportunity costs are higher and the bar for economic activity to be viable is higher than before. 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.
- opyate 3y ago
  Sure, there are these macro-economic factors, and Sony is not a charity, but it still sickens me that CEOs get millions in comp (and others in C-suite, and exec bonuses), board members get hundreds of thousands for sitting in on a few meetings a year, yet the little guy suffers. 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.

warp 3y ago

Gaming saw a huge increase during the COVID-19 pandemic, and companies staffed up, because they either had a bunch more money coming in or it was easy to get investments. All these gaming layoffs to me seem like a correction back to pre-covid levels. We've also seen a bunch of consolidation in recent years, which in itself makes some positions redundant.

nerdjon 3y ago
So I know a lot of the tech (non gaming) layoffs were correcting the over-hiring during covid. 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?
- opyate 3y ago
  > Is there anything out there talking about gaming also doing a big hiring push during covid? 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/ https://gamecraftpod.com/
- PurpleRamen 3y ago
  > Especially given the long development timelines for games now it wouldn't have made as much sense. 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.

taion 3y ago

Matthew Ball had a good essay on this about a month ago: https://www.matthewball.co/all/gaming2024 https://www.matthewball.co/all/gaming2024 The industry as a whole is facing huge financial pressures, Sony included.

toddmorey 3y ago

Really impressed by how many highly profitable companies have turned themselves inside out to arrive at this same "extremely hard decision." Either those words are a bit empty or you just have to admire recent levels of corporate bravery.

jonhohle 3y ago
It makes me wonder why they choose words like that. I suppose George Carlin‘s Soft Language summed it up decades ago, but PR people born after that set must have missed it.
- pdimitar 3y ago
  People who take themselves too seriously have never appreciated being satirized. Which is to say, even if they watch it they'll grumble and be annoyed and will not listen.

bart_spoon 3y ago

My understanding is that PlayStation’s big hit games have had particularly low margins. Despite selling well, they have generally been extremely expensive to make. They’ve helped them beat Microsoft in the console war, but I don’t think it was ever sustainable.

deleted 3y ago

[deleted]

Solvency 3y ago

It's called keeping the line up. Shareholders and wealthy people like that sort of thing.