It came as a bombshell when Sony announced a few weeks ago that they would be laying off 900 PlayStation employees, closing a studio and cancelling several games in various stages of development.
The studio that is sadly disappearing is London Studio, which was founded 22 years ago after a merger of Psygnosis and Team Soho. They were working on a fantasy adventure, which we will now never see. But Sony almost made a different decision. According to journalist Ethan Gach's Dead Game newsletter, the idea was that UK-based Media Molecule (Little Big Planet, Dreams) would get the axe instead.
They have not released a new game since 2019 when they launched the commercial flop Dreams. What they are working on today is unclear, but it is confirmed that it is not a Dreams sequel. Apparently, Sony believes in the project, as they ultimately chose to close down London Studio because the latter's work on the fantasy title was too slow.
As recently as October, Media Molecule was also shaken when about 20 people were fired and the founder and director Mark Healy left the studio.
Thanks GamingBolt