Sony Interactive Entertainment is fundamentally reevaluating its risk management strategy in response to recent challenges within the live-service gaming segment, according to senior company leadership. The newly confirmed strategic shift represents a multi-dimensional approach that primarily focuses on transforming how Sony oversees its PlayStation studio network.

Firewalk Studios' Concord, which launched in late August 2024 only to be permanently discontinued two weeks later, stands as the most prominent failure in Sony's ambitious live-service initiative that began under former SIE CEO Jim Ryan's leadership. However, industry reports indicate this was far from an isolated incident, with PlayStation having canceled at least eleven live-service projects between 2022 and early 2025. While some projects were in preliminary development stages with minimal financial impact, several represented years of development effort and substantial investment before ultimately being shelved. This pattern was notably demonstrated by The Last of Us Online, which evolved from a multiplayer component for The Last of Us 2 in 2020 before its cancellation in late 2023.

Confronted with these significant setbacks, Sony is fundamentally rethinking its approach to studio management. Sony Interactive Entertainment co-CEO Hermen Hulst addressed this strategic shift in a recent Financial Times interview, stating: 'While I don't want development teams to consistently avoid innovation, I do want us to implement systems where potential failures are identified early in the process, minimizing financial impact.' This philosophy represents a crucial adjustment in Sony's creative development methodology.

To implement this new philosophy, PlayStation studios are now undergoing more frequent and diverse testing protocols while being actively encouraged to share developmental insights across organizational boundaries—a practice not consistently emphasized in previous years. According to Hulst, the objective is to maintain creative autonomy while preventing teams from inadvertently duplicating efforts or proceeding toward expensive missteps. Although Sony's twenty PlayStation studios retain considerable operational independence, these structural changes aim to foster improved internal coordination and shared responsibility throughout the development ecosystem.

The Concord project has evolved into a cautionary case study within Sony, with estimates suggesting total losses approaching $400 million—including acquisition costs for Firewalk Studios, which has since been closed. During a recent investor question-and-answer session, Hulst emphatically stated that Sony would not 'repeat the same mistakes' following the Concord experience. His comments to the Financial Times reinforce this commitment to organizational learning and strategic adaptation.

This recalibrated approach may result in reduced game output but is designed to substantially mitigate financial risk. Long-term, Sony anticipates that its first-party studios will contribute increasingly to overall revenue, which reached $31.7 billion in the fiscal year ending March 2025.

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