PlayStation is reportedly in the process of winding down Sony Japan Studio - the company's renowned development arm, responsible for the likes of Knack, Puppeteer, Patapon, Ape Escape, and Gravity Rush - with the "vast majority" of staff already having been let go.
Sony Japan Studio is PlayStation's oldest first-party developer, having been established in 1993, and has frequently collaborated with external developers on some of PlayStation's most iconic titles, including Bloodborne, Shadow of the Colossus, and Demon's Souls.
The studio's last solo effort, however, was Knack 2 in 2017, and PlayStation's decision to wind down development efforts at Sony Japan is - according to a new report by Video Game Chronicles - simply a result of the fact the team hasn't been profitable enough in recent years.
Sony Japan is said to have wanted to create games that appealed to the Japanese market first and foremost, hoping they might also have global appeal, while PlayStation reportedly wants the kind of global hits generated by its other first-party studios.
VGC's report aligns with a story by Bloomberg last year, claiming Sony Japan had been sidelined during planning for PS5 as PlayStation continued to shift power from its original Japan home to its new US headquarters - and that its development resources had also been cut, with annual employee contracts not being renewed.
Indeed, multiple high-profile development staff have already announced their departure from Sony Japan Studio, including Silent Hill and Gravity Rush creator Keiichiro Toyama, and Teruyuki Toriyama, who served as producer on Bloodborne and the recent Demon's Souls remake.
VGC says localisation and business staff will remain in place, and that ASOBI Team, responsible for the Astro Bot games, will continue to operate as a standalone studio within Sony Japan.