Sony is putting a halt to the production of its PlayStation VR 2 units in order to clear the mounting backlogs of unsold units.

People familiar with the matter told Bloomberg on Sunday that the Japanese tech giant that it will first ship out the over 2 million units it produced in February 2023 before resuming operations.

The production halt follows after the increasing slowdown in Sony's $550 VR headsets since it first launched last year, getting outpaced by Meta's Quest VR and soon by the Apple Vision Pro.

Sony has yet to indicate plans to revive sales for its VR headset enterprise.

The report comes in just three weeks after Sony announced porting the PSVR 2 to computers.

Also Read: Sony Confirms PS VR2's PC Compatibility with Tests Underway

Financial Threats to Sony's Gaming Division Slowly Emerge

Even before the halt in the PSVR 2 production, signs of a revenue slowdown could be felt in Sony's mega-franchise.

Last January, Sony reported setbacks in its Pictures Division after the back-to-back Hollywood strike last year, impacting its schedules and release patterns. Sony expected the full impact of the strikes to be reflected in its next financial year.

For reference, its gaming and music divisions are its biggest contributors in keeping the company's revenues at positive growth.

Sony Resorts to Layoffs from Growing Revenue Losses

It does not help that Sony executives said that the PlayStation 5 is nearing its end-of-cycle period, prompting a $10 billion drop in its stock prices.

In response, PlayStation has laid off 900 staffers, or 8% of its global workforce, as a cost-cutting measure.

The layoff reportedly impacted several game studios under the Sony brand, including Insomniac Games (Marvel's Spider-Man), Naughty Dog (The Last of Us), and Guerilla Games (Horizon).

Related Article: PlayStation Will Lay Off 8% of Its Employees Globally, Sony Says