MS also has undergone multiple rounds of layoffs the past few years. 

MS is doing great, and it still isn't quite enough. 

A lot of these studios are making money. SIE as a whole is making money.

The big issue is that profits are slim. SIE's profit margin is like 5% right now. This is in a peak console year, a few years from the next console launch which tends to lose money. Compare that margin to Nintendo at like 30%. EA is apparently like 15%. 

AAA budgets are becoming difficult, and it's taking longer to launch. So now your $300 million investment takes 6 years, before you start seeing a return. They generally do still make money. But Sony's paying to cover hardware costs, they're paying for investments for studios that have yet to make money. They're paying for studios that are a few years away from launching their next game. They're paying for R&D. They're paying for third party support that doesn't directly support themselves. 

So you cut the projects that are risky or are very far off. You cut back some team sizes; try to make a game with 300 people instead of 400. 

It seems pretty clear that Media Molecule is on a short list, but why are these likely? 

I honestly wouldn't be that stunned if eventually Sony titles do start to make their way to XBox/Switch 2 consoles, probably not all of them, but GAAS titles like Helldivers 2 which is one of their biggest recent hits I could see eventually being put everywhere as a start, and once the ball gets rolling who knows where that goes.

An industry that is increasingly becoming focused on GAAS titles, those types of games the "business suits" running these companies will want on every major platform.

The other interesting implication here is future devices like Steam Deck 2 and ROG Ally 2 will likely be able to run any PS5/XSX title reasonably comfortably, so if Sony goes all in on PC, those games will run on those portables day 1 too if we're talking like a 2x-4x performance uptick over what the current Steam Deck and ROG Ally are. So like a Steam Deck 2 could run all Playstation games, all XBox games, all PC games, tons of retro games and your purchases are universal so they'll work on your PC, laptop, etc. too.

Think about that. Portable/dockable device with the new God of War, Last of Us, Gran Turismo, Halo, Forza, Starfield, Elder Scrolls VI, Call of Duty, GTAVI and you can also use those games on your PC without having to pay for them twice at a better performance than a PS5 depending on what kind of rig you have.

Layoffs will continue. The industry saw too big of a jump in spending through the pandemic and now it’s getting back to something closer to normal.

Also, Sony needs to improve their margins. Games shouldn’t cost hundreds of millions to make and they should put them at least on PC day one, if not other consoles as well.

$200 million+ honestly makes sense for games like Horizon Forbidden West, look at the visuals and detail and that's what? 30-40 hours? If 2 hour movies cost $250+ million, do we really think the manpower working on these games will magically work for that much less? 

If I'm a talented artist doing high end assets for a game company busting my ass for 60 hour weeks, why should I accept less of a salary than someone working on a movie? 

And there's people who aren't even happy with current level visuals lol, they want another leap above the standard of PS4/most PS5 titles to push even further, so what are getting to then? $300 million? $400 million? GTAVI can afford that, but at some point it becomes completely untenable. Looks like Sony hit that point. 

And an above poster made a good point here too, it's not even if these games make a profit, most of Sony's big titles will because they will push them through mass hardware bundling too to drive their numbers up, but when games take 6, 7, 8 years now for some of them to finish even one title, that's a $200+ million dollar investment that you see no return on for 6 years. That's ... not great. Days where you could make a game in 2-3 years or even have like 3-4 major releases on one platform from one big ticket studio are becoming rare to none. 

Posts like these just seem to outright ignore what incentivizes people to play on PS and why PS makes money at all given all the stuff you just listed.  Yes Helldivers is a big hit and they want people to buy PS5 over other consoles for it.  What better way to sell a console than to have stuff other consoles don't have?  They make most of their money from the 30% cut from other games sold on their platform, subs, and NOT having to pay the 30% to someone else for the millions of copies sold on their platforms of their first party games.  The bigger a game the bigger a reason for someone to buy a PS5 and feed them money for years.  They should cut the budget of a lot of their games and put them out faster considering Helldivers 2 probably cost a fraction of what TLOU2 did and that is how Nintendo makes so much.  They simply don't have the bigger budgets Sony does.  Hell Sony gimme some smaller 10-20 hour games that cost a fraction of the money or years to devlop that these once in a generation games now cost (once in a generation in the bad way.  They just take too long!)

The mass bundling is nowhere near 50% of LTD sales for the likes of SpiderMan, God of War, Horizon, etc. I get you want to doom post about Sony, but at least be honest with the numbers.

A new CEO will take over Playstation and has been vocal about the low profit margins, I figure he will make more cuts later this year to further improve the profit margins and regaining stock value.

Yeah Guerrilla was hit by 10%, I think all studios were hit, Insomniac seems to feel hurt by it.

Profits before Studio Acquisitions used to be between 12-13%, since FY2022, profits declined to 7% and 6% in FY2023.

The thing that has been overlooked a lot after the Q3 results is that Sony itself confirmed that profits were lower due to recent Studio Acquisitions, one of their executives said they were planning on playing for them in multiple quarters, they do expect to have record profits for future Fiscal Years.

It kind of blows my mind that these publishers all that pandemic growth was sustainable. People were only playing more games because they were trapped in their homes and needed something to do, and had Covid stimulus checks burning a hole in their pocket. Once the lockdowns ended and then people finally stopped self quarantining themselves after they realized Covid was here to stay and not all that deadly, all that extra gaming people were doing disappeared as people could get back to their outdoor hobbies and interests. The rapid inflation in the wake of Covid sure isn't helping either, paychecks go alot less far than they were before and gaming is a luxury, not a necessity. 

He's already involved with SIE. He's currently chairman.

He will be the interim CEO, while they find/prep someone else after Jim's retirement. 

These layoffs are probably driven by him already, through SIE and through his position as Sony Group CFO/President/COO.  I would be more concerned if he continued to make comments. I wouldn't take it as a given that there will be more.