In 2015, Sony internally created Manchester Studio (formerly North West Studio) to develop AAA games for PSVR. Their only game was the unannounced 'CSAR: Combat, Search, and Rescue', where the player would fly a helicopter around shooting enemies, whilst simultaneously rescuing rescuing civilians from them.
Unfortunately, CSAR's development struggled around vital decisions like art style and basic gameplay. Its co-lead designers also worked in London - only visiting the studio around once a week and micromanaging the many prototypes when there. Hires were made in London to streamline development, but it created a further breakdown in communications.
Despite the issues, Sony left Manchester Studio alone due to its small 30-person headcount working in a rented space. However, when Hermen Hulst took over PS Studios in 2019, he thoroughly reviewed the entire PS Studios portfolio. MS underwent proper scrutiny despite cheap running costs, and Hulst didn't like CSAR's lack of progress after 5 years of development. Combined with PSVR's ending lifecycle due to the upcoming PS5 and PSVR2, Hulst cancelled CSAR and closed MS in February 2020.
Sony's closed 5 studios since PS5 launched, with Manchester Studio closing a few months prior. But MS's closure coming first isn't surprising, as most in Hulst's position would've done the same. By 2020, PSVR was years past its peak in popularity. Therefore, even if CSAR shipped, there was no money to be made from its guaranteed low sales.
CSAR could've transitioned to PSVR2, but this meant a February 2023 release date at the earliest. An 8-year cycle for a VR game by an unproven studio with a track record of development issues makes no fiscal sense. Furthermore with 2025 hindsight, even a PSVR2 version wouldn't have improved sales. Other, bigger first-party titles like Horizon COTM performed so poorly that PS Studios hasn't released a VR game since PSVR2 launched.
It's a shame when studios close, but the unfortunate reality is that it made sense to shut down Manchester Studios. According to a post-closure exposé, even ex-Manchester devs recognize it was the logical choice and don't blame Sony for pulling the plug.
