Ex-PlayStation boss says platform holders must do more to restore the ‘double-A’ games category

Former PlayStation executive Shawn Layden has said that platform holders must do more to “reconstitute a double-A category of gaming”, as the cost of creating blockbuster games continues to increase.

Layden, who during a 30-year career at Sony served as CEO of SIE America and chairman of Worldwide Studios, told VGC at Gamescom Asia that platform holders such as Sony, Microsoft, and Nintendo must do more to foster games “between the Grand Theft Auto layer and Among Us layer.”

The former executive, who currently advises companies such as Tencent, believes that by encouraging the creation of smaller-scale games, platform holders can help alleviate the budget and team size issues currently facing the triple-A games industry.

“Game budgets are not going to remain in the triple-digit millions,” Layden said. “Let’s say $20 million dollars. With the current level of gaming development skill… it’s gotten higher than it was 10 years ago. We have a talent pool that we can reach into with the right budget and lean into it for the variety.

“Don’t make a bunch of double-A first-person shooters set in World War 2, that’s not going to move the needle, but give us more interesting opportunities. Give me more things like Firewatch, those kinds of games.”

Layden’s time at PlayStation saw the rise of the platform holder’s largest franchises like The Last of Us and Horizon, but it also saw Sony focus on, and provide development support for, many independent titles.

Layden believes that more variety is needed to tempt future players away from the established live service giants. According to a report this year, 60 percent of all playtime in 2023 was spent in games that are six years old or older.

“We’re trying to get more people into playing games, clearly people are not playing games, and they’re not playing games because they’re not interested in what we’re giving them, what we’re giving them is sequels to the things they weren’t interested in. I don’t think that’s going to get them through the door.”

Layden also discussed the industry’s need to find new sources of revenue if consumers are unwilling to pay more for games.

In 2020, some publishers used the move to the next generation of consoles as an opportunity to increase the price of standard games from $60 to $70. While this hasn’t been a universal change, most large publishers have now adopted the $70 price point.

“When it costs $5 million to make a game, you can charge $59.99, when it costs $125 million to make a game, you charge $59.99,” Layden said. “So the math doesn’t work. You end up having your cost and revenue streams at a break-even point. It’s not a healthy model. But the gaming community said they don’t want to pay more than $60 for a game.”

“That led the industry into this place of ‘well, how do we get them to continue to spend? What is the DLC? What are the microtransactions? How do we get battle passes? How do we sell subscriptions?’ For some, they made good decisions around that. Others, as we’ve seen, haven’t, and we’ve seen blowback for companies charging crazy amounts for DLC and season passes that have no benefit.

“So I think we are running up against a wall now. If you’re going to make a $150 million triple-A game, you’re going to have to make a sequel.

“Your ability to take chances or make a game that no one’s ever heard of before at that cost, it’s getting very difficult to do the math on that. Particularly when you have companies more and more being run by chief financial officers rather than when chief creative officers become CEOs.”

Layden also told VGC he believes the games console power arms race has plateaued, and that a majority of consumers are not interested in marginally more powerful machines.

“We’ve done these things this way for 30 years, every generation those costs went up and we realigned with it,” he said. “We’ve reached the precipice now, where the centre can’t hold, we cannot continue to do things that we have done before.”

Layden thinks that in order for the console market to remain healthy, it must also appeal to a broad audience and consumers who weren’t previously players.

“It’s time for a real hard reset on the business model, a hard reset on what it is to be a video game,” he said. “It’s not 80 hours, it’s not 90 hours, but if it is that’s a whole different category.”