Two of the biggest names in the gaming world Sony and Evolution, are merging studios in Liverpool to create one of the largest computer entertainment developments in Europe.
The move comes after Christmas sales of the Sony PlayStation 3 console (PS3) fell short of expectations due to the credit crunch.
Game sales have also taken a slight fall making the merger good business for both companies.
Sony bosses have said they will be restructuring numerous areas of the company in a bid to make the PS3 more profitable and Liverpool is the first step.
Sony's senior vice president of Worldwide Studios Europe, Michael Denny insists the two branches will keep their own creative elements while sharing resources to save money.
Mr Denny said: "We are planning to merge Sony Liverpool with Evolution Studios creating one huge gaming development.
"Perhaps one of the largest in Europe.
"The two branches already neighbours and share management, and are using combined resources, so this as an easy simplification of matters.
"Despite the merge, each team will keep their own internal concepting group to enable the dreaming up of new games and the like."
The merger is expected within the next 6 months.
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