Game Industry Weekly — July 28, 2026
Hey hey, game developers!
Five years after closing one of the most beloved studios in PlayStation's history, Sony had never given a straight answer about why. That changed this week.
Sony finally said why it closed Japan Studio
Shuhei Yoshida, president of Sony Interactive Entertainment at the time the call was made, took the stage at CEDEC on July 22 and said, plainly, what always seemed obvious from the outside. Japan Studio, the team behind Ico, Shadow of the Colossus, and Ape Escape, was shut down in 2021. Yoshida acknowledged how much the decision still stings for people. "Players from around the world have said that it's unbelievable that Sony would shut down Japan Studio," he admitted. Then he got specific. "As a company, PlayStation wanted to drive hardware sales with games like God of War and Uncharted, because that's the kind of game that's in demand." Japan Studio made smaller, author-driven games, the kind that are hard to turn into a recurring console franchise. I've always had a soft spot for games like that, smaller and more personal, so knowing they never fit the official PlayStation strategy again still stings a little, even though the business logic behind it makes complete sense.
Vermila did everything right and shut down anyway
Vermila Studios, the Spanish team behind Crisol: Theater of Idols, laid off its entire staff this week, 19 people, through Spain's ERE collective layoff process. The game launched February 10, published by Blumhouse Games, and landed decent reviews. CEO David Carrasco didn't soften it. "We're going to try to pull through for the time being without shutting down, but the circumstances are quite difficult and it is a feasible possibility in the upcoming months." Vermila was founded in 2020, bought by Embracer that same year for €0.9 million, then spun off in 2023 when Embracer pivoted toward operations that generated cash faster. The Blumhouse deal came in 2024, after the studio struggled to fund itself while keeping its own artistic identity intact. It found a publisher, shipped on time, got a warm reception. Hard not to feel for a team that did everything by the book and still didn't make it.
A rare exception: Alpha Dog Games gets its independence back
Alpha Dog Games, the team behind Mighty Doom, shut down by Microsoft in May 2024 alongside Arkane Austin and Tango Gameworks (the latter later rescued by Krafton), returned to independence this week. The founding team bought the studio back, updated its engine tech, and is already in talks with publishers and licensors about what comes next. It's good news, and it's worth noting a detail that makes it a little bittersweet too. The comeback only happened because Microsoft, the party that held the original decision, allowed it. The team's autonomy didn't come back because they earned it over two years. It came back because someone with power over the studio chose to let go.
Germany is running a different kind of bet
Over seven years, the German government has put more than €266 million into game development through a direct subsidy program, supporting 701 titles. Established studios can get up to 25% of production costs covered, indie teams up to 50%. Nearly half the total went to just 25 companies (Kalypso Media leads with €19.54 million for Tropico 7), so capital concentration shows up even inside a public program. Still, it's a data point worth watching from Brazil, where the Marco Legal dos Games policy discussion is still ongoing.
A few smaller items
The EU cleared EA's acquisition by the PIF-led consortium on July 23, but that's regulatory approval, not a closed deal. The US national security review is still outstanding, with an outside date of September 28.
A debate over side work clauses, contract terms restricting what developers can build on their own time, got a lot of attention this week. One anonymous triple-A developer said they'd been "hunted down by HR reps, lawyers, and comms people" over a personal project. At Wizards of the Coast, union members say approval requests for side projects "often receive blanket denials or go unanswered for long periods." Worth reading your own contract closely if you've got something running on the side.
And on the practical end, Valve rolled out a batch of Steam updates, including custom wishlist categories, shareable filtered wishlist views, autocomplete search, demo labels, and cross-region gifting without the gift-card workaround. Discoverability is always a sore spot for indie launches, so worth testing these out.
One from Brazil
On July 26 in Goiânia, GAMEGO (the association of game creators from the state of Goiás) held the ninth edition of Encontro Mulheres nos Jogos, a free event with a hands-on Construct 3 workshop and a talk from Mika Fran, GAMEGO's Diversity and Accessibility director and founder of Purãga Studio, on inclusion in game development. Grassroots work happening well outside the Rio-São Paulo axis, and it echoes something I touched on last week talking about AbleGamers Brasil.
And the Brazilian game on my radar this week is...
It's not really a release yet, but it earned a mention. At Retrocon 2026, held July 24 to 26 in São Paulo, WarpZone and Kunjee Studio showed off a demo for Capitão Ninja, a game in development for actual SNES hardware, physical cartridge included, built with a 4:3 aspect ratio meant for a CRT. The teaser shows stylized visuals, linear stage exploration, katanas and shurikens. No release date to give you yet, but anyone who knows me knows I'm not exactly neutral on 16-bit homebrew. If you're also the type keeping an Amiga emulator running for no reason but nostalgia, this one's worth following.
Out of everything this week, Yoshida's comment is the one that stuck with me most. Curious if something else here caught your attention instead, or if you'd push back on how I read any of this. Drop a comment, and if there's someone in your network who should be reading this too, send it their way.
Take care, and I'll see you in the next edition!
