Tricia Duryee

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Sony Online Chops Workforce and Cancels Upcoming Game Launch

Sony Online Entertainment, which develops games for the PlayStation and PC, has laid off 205 employees and is closing down game studios in Denver, Seattle and Tucson, Ariz.

A spokeswoman declined to say what percentage of the company’s overall workforce that represents. Sony Online Entertainment, which is a subsidiary of Sony, will shift a lot of the work to its headquarters in San Diego.

In addition to the layoffs, Sony Online is also discontinuing production on an upcoming game, The Agency, which had been under development for four years and was slated for the PC and PlayStation console. The game studios are known for their work on EverQuest, Star Wars Galaxies, Untold Legends and Field Commander.

The decision to discontinue will allow the company to focus on two of its better known properties, PlanetSide and EverQuest. The layoffs and studio closures were initially reported by Kotaku.

Bloomberg reports that Sony Online Entertainment President John Smedley has said that the company plans to develop more free-to-play games, which aligns with the growing popularity of social games on Facebook. Those games require less money and time, he added.

Here’s Sony’s full statement:

“As part of a strategic decision to reduce costs and streamline its global workforce, SOE announced today that it will eliminate 205 positions and close its Denver, Seattle and Tucson studios. As part of this restructuring, SOE is discontinuing production of The Agency so it can focus development resources on delivering two new MMOs based on its renowned PlanetSide and EverQuest properties, while also maintaining its current portfolio of online games. All possible steps are being taken to ensure team members affected by the transition are treated with appropriate concern.

This strategic decision will have no impact on SOE’s current portfolio of live games; additionally SOE will transition development efforts for the Denver and Tucson studios’ suite of products to its San Diego headquarters. This strategic alignment of development resources better positions SOE to remain a global leader in online gaming and deliver on its promise of creating entertaining games for players of all ages, and servicing the 20 million players that visited SOE servers in just the past year.”