Sony recently purchased the Firesprite studio, and a new job listing has appeared on the studio’s website (https://www.firesprite.com/careers/job/C9466133BF). It states that a new horror game is in the works and that it will be powered by the Unreal Engine 5. The listing also states unequivocally that this is a “AAA first party PlayStation” title.
The studio is working on a “AAA narrative driven horror-adventure game in Unreal 5”, according to the job listing. They’re looking for a Narrative Director to join the team and help with various aspects of storytelling. It also states that the new employee must “consider the game’s universe and lore.”
Unfortunately, the job listing doesn’t reveal much about the new project, and Firesprite does have other listings for a AAA narrative-driven adventure game in Unreal Engine 5. The other job listings on the website, on the other hand, make no mention of horror, so it’s uncertain if these are even for the same project.