- Primary Subject: Sony Interactive Entertainment
- Key Update: Multiple studio closures and canceled live-service projects reshape PlayStation’s expansion strategy
- Status: Contraction and recalibration phase
- Last Verified: February 21, 2026
- Quick Answer: Sony’s aggressive 2019–2023 studio expansion hasn’t translated into a stronger PS5 lineup. Several live-service bets failed, studios were closed, and the generation feels thinner than expected despite a larger first-party roster.
For years, PlayStation shaped its identity around carefully nurtured studios and high-profile exclusives before shifting into an era of expansion.
Between 2019 and 2023, Sony Interactive Entertainment dramatically increased its first-party footprint, assembling one of the largest studio lineups in its history.
Back then, it was obvious that PlayStation was building for endurance rather than short-term wins, but buying studios does not automatically secure progress.
By 2026, what followed that rapid expansion feels far less cohesive than the strategy once projected.
Was Insomniac the Start of a New PlayStation Era?
Sony’s acquisition of Insomniac Games in 2019 underscored a strategic turning point for PlayStation, as the company’s first major studio investment in years translated almost immediately into success through the booming Marvel’s Spider-Man franchise and Insomniac’s trusted first-party reputation.
But that acquisition wasn’t an isolated move as it was the first domino in what became a four-year expansion wave.
From 2019 to 2023, Sony expanded its first-party lineup by acquiring ten additional studios, including Bluepoint Games, Housemarque, Firesprite, Nixxes Software, Valkyrie Entertainment, Haven Studios, Bungie, Neon Koi, and Firewalk Studios.
At the time, Sony’s strategy appeared measured compared to Microsoft’s blockbuster acquisitions like ZeniMax and Activision Blizzard.
PlayStation wasn’t swallowing publishers; it was strengthening its internal ecosystem. Or at least, that was the narrative.
Did Sony’s Live-Service Bet Backfire?
Many of these acquisitions reflected Sony’s broader live-service ambitions, as PlayStation leadership moved beyond the premium, self-contained exclusives of the PS4 era and embraced multiplayer-driven titles with long-term revenue potential.
Multiple acquired studios were either redirected to develop live-service projects or acquired specifically to support that transition.
That bet on multiplayer hasn’t paid off, with Firewalk Studios releasing Concord in 2024 shortly after joining the company in 2023. Within weeks of launch, the game collapsed commercially.
Two months later, the studio was shut down entirely. Neon Koi, originally acquired to expand Sony’s presence in mobile live-service games, never shipped its intended project and was closed in 2024.
Bluepoint Games, long respected for high-quality remakes like Demon’s Souls and Shadow of the Colossus, reportedly worked on a live-service God of War concept that was ultimately canceled.
After failing to secure approval for new pitches, the studio was shuttered in 2026, laying off roughly 75 employees.
It’s becoming increasingly obvious that many studios touted as key to PlayStation’s long-term vision were either funneled into failed live-service bets or trapped in development limbo.
Why Does the PS5 Generation Feel Thin Despite More Studios?
On paper, Sony’s first-party lineup has never been bigger, yet in reality the PS5 era has felt surprisingly light on brand-new internal IP.
The lengthy development arc of big-budget games accounts for some of the delay, yet miscalculation played a role too, with companies doubling down on live-service ambitions just as demand began softening.
When those projects stalled or failed, years of development time evaporated.
The result has been a contraction phase marked by layoffs, restructuring, and risk aversion. Sony’s once-expansive studio portfolio now feels narrower than expected.
Even surviving teams operate within an environment where canceled projects and corporate recalibration are recent realities.
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