Sony has announced that their Tokyo-based JAPAN Studio, the in-house video game development team responsible for such titles as Gravity Rush, Ape Escape, and The Last Guardian, will effectively shutter in favor of transferring the studio’s resources to the PlayStation Studio brand’s “global functions.”

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News of the studio shake-up was first broken by Video Games Chronicle on February 25th, when after speaking to several sources, the video game news outlet reported that the aptly named JAPAN Studio “has seen the vast majority of its development staff let go […] after their annual contracts were not renewed ahead of the company’s next business year.”

Later that same day, Sony confirmed that JAPAN Studio  would be re-organized, writing in a statement given to IGN that “In an effort to further strengthen business operations, SIE can confirm PlayStation Studios JAPAN Studio will be re-organized into a new organization on April 1.”

Related: Sony Sells Less Than One Million PlayStation Units In Japan In Worst Sales Year Since 1994

“JAPAN Studio will be re-centered to Team ASOBI, the creative team behind Astro’s PLAYROOM, allowing the team to focus on a single vision and build on the popularity of Astro’s PLAYROOM,” read the statement. “In addition, the roles of external production, software localization, and IP management of JAPAN Studio titles will be concentrated within the global functions of PlayStation Studios.”

An internal brand first launched in 2020, PlayStation Studios encompasses all SIE-owned studios, including Naughty Dog (The Last of Us), Sucker Punch Productions (Ghost of Tsushima), and Insomniac Games (Ratchet & Clank). 

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According to VGC, as told to them by their sources, JAPAN Studio’s end was a long-time coming, as the studio allegedly “simply hasn’t been profitable enough in recent years,” as the developer wanted to create games that appealed to the Japanese market first with hopes of having global appeal, while PlayStation wants the kind of global hits that its other first-party studios produce.”

A separate source also told the news outlet that the studio’s fate had been “sealed over a year ago” with the departure of longtime Japan Studio president Allan Becker, who allegedly left “due to frustration over the developer’s lack of hits,” while yet another source claimed that this decision by Sony “was part of PlayStation shifting more power from its native Japan to its new US headquarters.”

Related: Report: Censorship Among Key Reasons PlayStation Brand Faces “Decisive Decline” In Japan

The closure of JAPAN Studio is but the latest confirmation that Sony has begun to sideline their Japanese audiences in favor of creating games with mass appeal.

In January, ACE Research Institute’s Hideki Yasuda wrote that rampant censorship of Japanese titles had led the country’s players to “believe Sony and CEO Jim Ryan have shown disregard for the Japanese market,” which in turn had led to the PlayStation brand facing a “decisive decline.”

As a result of these feelings of abandonment, Sony sold less than one-million PlayStation units in Japan across all of 2020, marking the worst sales numbers since the console line launched in 1994.

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