A couple of weeks ago, CNN did a story on how video games were “recession proof”. Now the bitter irony of the story is that it first aired on December 22nd — only a few days after Electronic Arts announced that it would be closing nine studios.

But if you thought that this recession would only hurt developers like Free Radical Design and Factor 5, take note: Sony and Microsoft are both rumored to be prepping for some major job cuts.

First, Sony. According to The Times, “unnamed company sources” are telling them that Sony is preparing for what is described as a ’sacred cow-slaying’ that will include several job cuts. These sources went on to say that the “slaughter”, as we’ll call it, will be announced sometime in February, after the CES.

This rumor comes on top of the earlier cuts Sony made, slashing about 8,000 jobs.

If this worries you, you can take comfort in knowing that Sony Japan is vehemently denying this report, saying that they “don’t have any such plan”.

As for Microsoft, CNBC is reporting that the Xbox 360 manufacturer is getting ready for a “significant” operation that is designed to “offset a global slowdown in sales”. It’s been rumored that this initiative would come in the form of massive layoffs that could affect as much as 17% of Microsoft’s total work force.

Unlike Sony, Microsoft neither confirmed or denied these rumors, saying in an email to ZDNet Asia that the company doesn’t comment on “speculations and rumors”.

So, to bring this full circle I must ask: Are video games still recession proof?

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