Sony shuts down Firewalk Studios and Neon Koi, citing challenges in expanding PlayStation brand to other platforms and genres

Sony Interactive Entertainment has announced the closure of two of its first-party studios. This is part of the company’s refocused approach to expanding the PlayStation brand and its long-term growth.

Concord

UPDATE: According to Bloomberg, about 210 employees will lose their job as part of studio closures — 172 people working at Firewalk Studios and 38 at Neon Koi.

Sony’s gaming division will be downsizing by two studios, Studio Business Group CEO Hermen Hulst revealed in an internal email to staff:

• Firewalk Studios — Concord developer, which was acquired by PlayStation in 2023;
• Neon Koi (formerly Savage Game Studios) — mobile studio, which was founded by Deconstructor of Fun creator Michail Katkoff and acquired by Sony in 2022. Katkoff left the company last year.

It is unclear how many employees will be affected by the closures, but Sony “will work to find placement for some of those impacted within our global community of studios where possible.”

Hulst explained this decision as a result of Sony wanting to act more strategic in terms of its expansion beyond traditional single-player games that the PlayStation brand is known for. He added that the company needs to “recognize when our games fall short of meeting player expectations.”

When it comes to Firewalk and Neon Koi specifically, here are the main reasons behind their closures:

• Sony is still in the early stages of its mobile expansion, so the company needs to focus on games that are “in-line with PlayStation Studios’ pedigree and have the potential to reach more players globally”;
• Competition in the PvP shooter genre is fierce, and PlayStation didn’t hit its targets with Concord;
• After exploring other options, Sony decided not to relaunch Concord and shut down Firewalk Studios;

“I am a big believer in the benefits of embracing creative experimentation and developing new IP,” Hulst noted. “However, growing through sustainable financials, especially in a challenged economic environment is critical.”

Despite the failure of Concord, PlayStation has no plans to give up on its live service strategy. According to Hulst, the company will take the lessons learned from this project and move forward with new titles.