IGN has confirmed that Sony's Japan Studio is being shrunk and reorganized.

From a business perspective this makes sense. It hasn't produced a true hit in many years, it was expensive, and they're focusing it around Team ASOBI, which is responsible for the Astrobot games, so they clearly read Jeff's GOTY 2020 list.

According to IGN much of the conflict stemmed from the studio's desire to make games that would resonate with the Japanese market rather than aiming explicitly for a global audience. Playstation has had to defend itself from accusations it is shifting away from Japan, and this obviously won't help that perception.

The truth is that while Japanese developers have experienced a resurgence in quality and popularity since the 7th gen, the Japanese video game market isn't nearly what it once was. Video games are more popular than ever on a global scale by many measures (The PS4 and Nintendo Switch are going to both break 100,000,000 units sold), but the Japanese console market is much smaller than it ever was. The Japanese arcade scene is the most robust in the world but it too is dying, and was even before COVID-19. Japanese players seem to prefer mobile games or, if they want to play on a dedicated device they want a Nintendo Switch.

As a long time gamer this is very sad for me. When I was a kid the Japanese market was dominant. I was born in 1981, so I was very young when Atari left the market, and after that in the American market there wasn't even a western console maker until Microsoft entered the market. Obviously there were lots of video games made in the West, and the PC market was dominated by American companies, but the console market was solidly dominated by Japan, and by games made for the Japanese market. That helped to make console games very different from their PC counterparts, and also introduced all kinds of cool Japanese cultural artifacts and values into games.

Now Japan doesn't really care about games outside of cell phones and Nintendo. Sony isn't even going to try to aim for the Japanese market specifically anymore. The PlayStation brand is based out of California at this point.

In the end it's not a huge deal. There are even some advantages. More and more games will be localized for the West because that's where the money is, and of course Japanese studios will continue to make games and we'll keep enjoying uniquely Japanese products like Nier and Final Fantasy. The true end won't come until the current generation of game makers leave the industry and there aren't many people left who grew up with games to replace them.

But it's still sad to see, and a real sign of how the market has changed in the past 25 years.

The PC Engine and Sega Saturn were moderate hits by appealing almost entirely to the Japanese market. Now Sony won't even make games for that market for its globally popular console.

Phil Fish was right all along 😢

It's a real bummer that a market leader like Sony is showing a loss of faith in their development. Like a lot of aspects Sony drops, but okay..

I, personally, couldn't see myself enjoying games that are just skewed towards a western audience. Japan Studio has had their hands in so many classics over the years, their influence is felt everywhere. From the makers of Work Time Fun!