Sony Online Entertainment and THQ are both handing out pink slips this week. EverQuest

SOE was hit hard by a devastating round of downsizing that resulted in one-third of the workforce being laid off and three studios closed. THQ cut more than 30 jobs at two of its studios, but both remain open.

205 of the roughly 700 SOE employees were laid off Thursday and "The Agency," an MMO that has been in development for more than six years, has been cancelled.

"This strategic decision will have no impact on SOE’s current portfolio of live games," the company said in a statement. "This strategic alignment of development resources better positions SOE to remain a global leader in online gaming and deliver on its promise of creating entertaining games for players of all ages, and servicing the 20 million players that visited SOE servers in just the past year."

SOE was a front-runner in the persistent world genre of gaming. While it was not the first company to create a massively multiplayer title, "EverQuest" was the first breakout MMO and still retains a very loyal group of players, who, with an average age of 38, skew much older than the typical player. Competition from "World of Warcraft" and other MMOs has hurt the company, though.

THQ, meanwhile, let go 32 people across two studios – Volition and Kaos (makers of the company's recent "Homefront" action title).

The company classifies the moves as "workforce adjustments" that are "a relatively common occurrence in the game development industry."

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