UPDATE: In a new message given to IGN, it was confirmed that Sony is restructuring Japan Studio. The full statement from Sony is as follows:
"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. 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. 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."
ORIGINAL: Japan Studio, the longest-running developer within PlayStation's first-party studios group, is said to be drastically shrinking its staff. The information comes by way of a new report which says Sony hasn't opted to renew a number of employee contracts before the beginning of the next fiscal year. While a smaller team will still remain in place to, assumedly, work on the future of the Astro Bot series, much of the studio's former employees are in the process of moving on elsewhere.
According to VGC, ASOBI Team, which has previously worked on the Astro Bot franchise, is the only group at Japan Studio that will not be affected by the staff alterations. Some team members that worked at Japan Studio are said to have joined ASOBI, while some others are said to have joined former director Keiichiro Toyama at his new company called Bokeh. Meanwhile, ASOBI will become an independent entity within Sony.
As of this writing, it's also uncertain if Japan Studio's support team which assists on other projects will be dwindling as well. In the past, Japan Studio has helped out on popular games like Demon's Souls, Bloodborne, and The Last Guardian.
As a whole, Japan Studio has been around since 1993 and has created countless projects over the years that have been beloved by fans. Alongside some of the former games that it worked on with other studios, Japan Studio has also created properties such as Knack, LocoRoco, Gravity Rush, Ape Escape, and many others. And while these games might be iconic in their own right, they reportedly weren't profitable enough for Sony to want to continue to invest many resources in the studio.
This move is also amongst a growing number at PlayStation in recent years that sees the company moving a bit further away from its Japanese roots. Although Sony is located out of Japan, PlayStation has started to consolidate more of its offices in western territories over the past few years. Not to mention, PlayStation as a whole also implemented other major changes within the past year, namely in relation to control schemes on the PlayStation 5 which no longer took into account default settings that had been the norm in Japan for decades.
At the moment, Sony hasn't provided a comment on this report and the ensuing changes that are happening at Japan Studio. If we end up hearing anything further from the publisher in the future, we'll provide an update to this story.