This shouldn't really be surprising to people when just about every single project they worked on sans From Software games in the modern era didn't really do spectacularly. Gravity Rush got two major pushes and while it was a beautiful little series, it just never went anywhere. Knack worked as a launch title for the PS4, but boy the sequel did almost nothing besides become a meme. Puppeteer was also a late life PS3 game that just didn't go anywhere at all. And Ueda has been gone for almost a full decade now. They were always in a supportive role, but over the past few years, even that has vastly diminished. Sony Japan was once a critical component of Sony's success, but it really has been a while and now they've more or less just got Team Asobi and Polyphony Digital as their Japanese studios.
I'd imagine the kind of operation they had would be just best served reallocating resources around and possibly looking into forming a closer partnership with a studio or opening a brand new one. Like I don't think beefing up Sony Japan was ever going to be a super realistic option when not only had the Japanese teams enjoyed extremely limited success for a fair amount of resource investment in the past, but also just how much talent had long since departed from the studio. At some point you'd just be creating an entirely new studio from scratch anyway. Like I do hate it on a personal level and feel for people losing their jobs, but it just doesn't sound like there was much left to begin with.
I'd imagine the kind of operation they had would be just best served reallocating resources around and possibly looking into forming a closer partnership with a studio or opening a brand new one. Like I don't think beefing up Sony Japan was ever going to be a super realistic option when not only had the Japanese teams enjoyed extremely limited success for a fair amount of resource investment in the past, but also just how much talent had long since departed from the studio. At some point you'd just be creating an entirely new studio from scratch anyway. Like I do hate it on a personal level and feel for people losing their jobs, but it just doesn't sound like there was much left to begin with.