Bellevue-based game studio Bungie is laying off 17% of its staff, or 220 people.
Bungie CEO Pete Parsons announced the move in a Wednesday blog post, noting that the Sony subsidiary is focusing on its core games of Destiny and Marathon, a new game that revives a previous Bungie title and is expected to launch in 2025, according to some reports.
Parsons said in the post the cuts would affect all levels of the company, including most senior leaders and executives, and Bungie's rapid growth ran into an economic slowdown and a downturn in gaming.
"We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red," Parsons wrote. "As we’ve navigated the broader economic realities over the last year, and after exhausting all other mitigation options, this has become a necessary decision to refocus our studio and our business with more realistic goals and viable financials."
Parsons added that laid-off employees are receiving severance, bonuses and health coverage. Bungie didn't respond to a request for comment.
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Bungie is strengthening its ties to Sony Interactive Entertainment, which acquired Bungie in 2022 for $3.6 billion. Bungie has since operated as an independent subsidiary. Parsons said Bungie is integrating 155 of its roles into SIE over the next few quarters, saving more roles that otherwise would have been cut.
He added Bungie is also spinning out a new, unnamed game to form a new studio within PlayStation Studios, another SIE subsidiary.
"Today we must say goodbye to incredible talent, colleagues and friends," Parsons wrote. "Bungie will continue to make great games. We still have over 850 team members building Destiny and Marathon, and we will continue to build amazing experiences that exceed our players’ expectations. "
Bungie, founded in 1991, is also behind the hit franchise Halo. Microsoft bought Bungie in 2000. Bungie parted from the tech giant in 2007, but Halo remains a Microsoft product. In October, Bungie laid off an undisclosed number of employees.
Bungie's layoffs come amid a difficult time for the gaming industry. Many companies are retrenching after booming during the pandemic, and the rising cost to produce games is hurting bottom lines.
“We’ve been coming from a huge bump down to what is normalized, average growth with the initial retraction in 2022,” Jens Hilgers, founding general partner at the video game-focused venture firm Bitkraft Ventures, previously told the Business Journal. “The games companies are realizing we might have overstaffed in excitement and anticipation. Now we’re here and seeing we’re at a place where we’re a bit overstaffed.”
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