The closure of Japan Studio, announced by Sony Interactive Entertainment in April 2021, marked a turning point in video game production in Japan. Shuhei Yoshida, former president of the company, has recently commented in several podcasts that the disappearance of the AA game market was one of the key factors behind this decision.

During his tenure, Yoshida emphasized that, although Japan Studio created high-quality products, its lack of successful AAA releases, apart from Gran Turismo, contributed to its financial and creative difficulties.

Yoshida mentioned that with rising costs and the scale of major releases, lower-budget games faced an increasingly complicated market. The intellectual properties of Japan Studio, many of which belonged to this AA segment, failed to find a viable space in an environment dominated by large-scale titles.

This resulted in the studio’s inability to advance innovative projects, such as Keiichiro Toyama’s proposals for a sequel to Gravity Rush.

There is still room for AA… ironically, within Sony

Despite the closure, the essence of Japan Studio has endured in Team Asobi, a spin-off that has managed to capture the public’s attention with its successful game Astro Bot, which received the Game of the Year award at The Game Awards 2024. On the other hand, the closure of Japan Studio allowed Toyama to found his own company, which is currently working on Slitterhead, an anticipated game for 2024.

This reflects the evolution of lost talent and the resilience of the Japanese video game industry in the face of changing challenges.