Insomniac Games was recently the victim of a major ransomware attack, which exposed critical information such as contract terms and their future projects. But that’s not all, as the leaks also revealed Sony’s plans for drastic budget cuts across all of its studios.
The leaked documents revealed the Japanese giants’ plans to cut down their budget, and they want to get it done quickly. The significant factor behind this step is they are spending massive budgets on video game development. Moreover, Sony has multiple studios working under them, and most of them work on AAA projects. With the short release windows for a game, those studios often need larger teams that require Sony to spend more.
(FYI) Leaked meeting notes reveal that “there will be one studio closure” at PlayStation Studios
Insomniac pressured by Sony to make budget cuts despite the success of Spider-Man 2, with 50-75 layoffs across the board.
“Slimming down Ratchet and cutting new IP will not account… pic.twitter.com/fabV8RNj50
— Idle Sloth (@IdleSloth84_) December 21, 2023
Despite Spider-Man 2’s massive success, Insomniac Games has been pressed to take steps to help reduce the budget. The 2023-released game sold over 6 million copies but still needs to sell 1.1 million more copies to break even. As a result, Sony may not consider it a success until it reaches that threshold.
Sony asked Insomniac earlier this year to develop future AAA titles for less than $350 million, which is roughly $215 million in today’s dollars. According to the American studio, the proposed budget is $65 million less than what was spent on Spider-Man 2’s development. Moreover, the Japanese giants also ashed the studio to cut down their employee count and cancel plans for a few Rachet titles and other new IPs.
Will Sony close one of their first-party studios to cut down on costs?
Insomniac Games isn’t the only studio that fell victim to Sony’s plans for budget cuts. The Japanese multinational intends to do the same with its other studios. Earlier this year, the headcount for full-time employees was around 500, but it had dropped to 470 by September.
According to the leaked documents, Sony laid off a few employees and didn’t backfill certain positions. They also put some employees on performance improvement plans, who eventually might get fired. As for Insomniac Games, Sony asked them to remove all the low performers from the Wolverine and Spider-Man 3 teams and replace them with developers from the canceled Ratchet and new IP projects.
If slimming down the employee count also doesn’t help Sony to lower their massive expenses, they are also prepared to shut down one of their first-party studios. However, the documents didn’t reveal which studio would be closed. However, it will be interesting to see if the Japanese behemoths can reduce their budget without closing a studio.
