Sony shuts down Dark Outlaw Games and downsizes mobile games development as PlayStation continues to rethink plans

The games industry has faced a challenging beginning to 2026, marked by widespread layoffs despite resilient consumer spending amid global economic pressures. Sony and PlayStation have also been impacted by these cutbacks, with recent staff reductions affecting even acclaimed studios like Bluepoint Games, known for its remasters and remakes.

On March 24th, it was revealed that Dark Outlaw Games, a studio established just over a year ago, is also being shut down. Industry veteran Jason Blundell, known for his work on Call of Duty, was leading development at the company before Sony withdrew its financial support. The studio's new project was reportedly in its initial stages when Sony Interactive Entertainment (SIE) opted to close the 'incubation studio.'

Reports confirmed that PlayStation is implementing further cuts, particularly within its mobile development sector. Approximately 50 employees have been impacted by these additional reductions. It appears PlayStation is scaling back its involvement in the mobile game market, although existing announced titles are expected to proceed for the time being. This strategic shift does not seem to impact external collaborations, such as the partnership with NCSoft for an online Horizon title.

Dark Outlaw Games marks the second studio led by the Call of Duty veteran, Jason Blundell, to be shuttered recently. Prior to this, Deviation Games, founded in 2020, had commenced work on a 'groundbreaking triple-A' original intellectual property. By late 2022, a co-founder had left to join Sony Interactive Entertainment, and in March 2024, Deviation Games was confirmed to have closed.

These recent strategic adjustments by Sony and its PlayStation division fuel speculation among media and players that the upcoming generation of games may lean towards more traditional creative endeavors. This marks a potential departure from the live-service-focused strategy that has largely characterized the PlayStation 5's ongoing lifecycle.

Following the significant challenges faced by live-service projects, including the widely noted failure of Concord, and a saturated online gaming market that's experiencing a slowdown even for established giants like Fortnite, PlayStation appears to be shifting its focus. The underlying message suggests a renewed emphasis on a more frequent release schedule of major exclusive titles. Consequently, a less aggressive PC porting strategy might also be anticipated.