He’s been saying it for years: blockbuster game development is unsustainable today, and given that Shawn Layden used to lead PlayStation’s entire roster of first-party studios, he likely knows a fair bit about the issue. “Every generation it costs twice as much to build a game,” he told Tom Phillips more recently.
“What costs $1m on PS1 then costs two, then four, then 16. It goes exponentially,” Layden said at the time. “The PS4 generation, which was the last I was associated with, game dev was $150m if you want to be top of the line, and that’s before marketing. So by that math, PS5 games should eventually reach $300m to $400m – and that is just outright not sustainable.”
Those numbers align with what we’ve heard of development costs in recent years. Bloomberg reporter Jason Schreier said recently triple-A budgets are “$300m or more”, and likewise the reported the rise in costs from, say, Uncharted 2: Among Thieves costing $20m to make in 2009 for the PS3, to The Last of Us Part 2 costing $220m to make in 2020 for PS4. Budgets are even bigger for industry mega-franchises such as Call of Duty, which are worked on by hundreds and sometimes thousands of people. 2020’s Call of Duty: Black Ops Cold War reportedly cost $700m to make. And of course this year’s gargantuan, industry-defining kaiju, Grand Theft Auto 6, is estimated to have cost more than $1bn.
For some games, that works; for GTA 6 it’ll likely work – a whole industry holds its breath in that hope. But a vast majority of games struggle to operate at that level and recoup the costs associated with it. Entire studios break themselves on the rocks of blockbuster game development, while relatedly pricing is a major concern for consumers, as we consider dynamic pricing and a discless future. Coupled with skyrocketing console costs, it’s clear we face a problem.
“The current structures we’ve built over time no longer hold,” Shawn Layden tells me, during a recent interview. And while being aware of and talking about the problem for a while, as I say, the difference now is that he hopes to do something about it. He’s working on a way to bring double-A gaming back.
Double-A is the tier of gaming below triple-A, and above the tier I’ve never heard anyone call “single-A” but refer to as “indie”. It’s the tier of game made by a team of fewer than, say, 70 people – it’s not clearly defined – and working within more apparent budgetary constraints. They’re games that can’t be everything to everyone, in other words, so they’re usually shorter and more focused, and arguably more fun. Think Lies of P, RoboCop: Rogue City, or even Space Marine 2. There’s obviously an appetite there.
Smaller teams and shorter development times clearly have more financial appeal, because they’re cheaper and therefore more sustainable, economically speaking, and more teams can achieve them. But there’s a knock-on effect of that which is less obvious but no less powerful – and this is at the heart of Layden’s argument.
“The basic game publishing model hasn’t changed since the days of Sega and Nintendo back in the early 90s”
“The basic game publishing model hasn’t changed since the days of Sega and Nintendo back in the early 90s,” he says, “and I think that structure, while that helped propel gaming from being this niche activity – that people like you and I enjoyed, but not a lot of other people did – to becoming the largest entertainment sector in the world, whilst it’s bigger than movies and music and TV on a revenue basis, it doesn’t do it at a social basis.”
The example he uses is: “If you walk into Tesco right now, almost everybody in Tesco has a favorite song, but they won’t have a favorite game, so the impact of music is everywhere, the impact of toasters is everywhere, but gaming is still, we make a lot of money but in this very prescribed set of users.”
“The problem we see there,” he continues, “is the current model incentivises or almost dictates that to get funding – certainly in the triple-digit million era – you better be a sequel or you better be based on something like Lord of the Rings, or you had better be ‘it’s just like Grand Theft Auto but…’. So we make all those kinds of games, we fund those kinds of games. But the quirky kind of stuff you saw on PS1 and PS2, we don’t see so much.”
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For Layden, therein lies the clincher. The creative incentive that, he feels, propelled the PS1 and PS2 to their own wider-audience success. “The thing with writing wacky new stuff is that’s really our only chance to try to entice currently non-gaming people into our space,” Layden insists, “because they have already decided, those who do not play games now – even if they’ve heard about gaming – they’ve decided Grand Theft Auto: not interested. Call of Duty: not interested. Halo: not interested. If they were interested, they’d be here. So as an industry, what do we do to grow the market?”
“We keep making more of the same thing; bad habits are hard to stop”
He answers his own question: “We keep making more of the same thing; bad habits are hard to stop. That’s why I’m trying to put together a publishing concern that will address that underserved double-A market, not only from the consumers I believe it can appeal to, but the developers who want to go back there.”
Microsoft is a classic example of this,recently restructuring its colossal Xbox division – most of it acquired within the past several years – around its major franchises, pulling developers of other games into their orbit. Will the teams it’s shuffled into supporting roles be able to make their own games again? “You’re just bringing them in to feed the beast,” Layden says. “And a lot of those teams lost their chance to make their game as they’re working in the service of their new owner.”
Now, exactly what a “publishing concern” is, it’s not clear, and Layden isn’t quite ready to detail it. But I don’t think it’s a full-on double-A publisher, because I’d be surprised if Layden, who retired from Sony after 32 years in 2019, was keen to un-retire several years later and lead such a business. I expect it’s more of an investment thing, an avenue through which double-A games can find funding, which is no less helpful. And his intention is clear: “I want to go back to a way that we can incentivise the double-A games,” he states. “I don’t think you need triple-digit millions to make a great game.”
“The thing with writing wacky new stuff is that’s really our only chance to try to entice currently non-gaming people into our space”
Actually, he thinks the market is “showing fatigue”, which he believes is evident in evergreen colossi like Fortnite stagnating in terms of player numbers, and he sees potential here. “The industry goes through fads,” he explains. Remember plastic guitars? Remember everyone making an MMO? Remember live service – we’re not quite clear of that yet. We are seeing a swing back to single-player games, he’s observed, and the Summer Game Fest showcases bear this line of thinking out: they were dominated by single-player games.
But what about shorter single-player games? 007 First Light and Marvel’s Wolverine are great examples of games like this. “Sean, I miss the days when I could finish a game,” he says friends tell him. “I miss that dopamine hit of killing the final boss, getting to the final level, credits roll.” And he tells me data shows that less than half of the people playing today’s biggest games actually finish them, so why keep making them?
“Let’s go back to understanding not only ‘what did you want to build?’ but ‘who are we building it for?'” he says. “When the average gamer was between 16 and 24, you are time rich and money poor; but if you’re between 28 and 32, you may not be money rich, but you’re definitely time poor.” (Hey, try 43, Sean.) “So let’s keep that in mind, folks.”
Since leaving Sony, Shawn Layden has been a brain for hire, consulting for mega-companies like Tencent, while spending time talking to people like me. You might have seen a few articles with his name in on the site recently, including him talking about how Microsoft has to make a choice between being a publisher or a platform holder, how Sony talked for years about getting rid of PlayStation game discs, and how Sony should have made a PSP2 instead of PS Vita. I’ll of course let you know more about his “publishing concern” whenever those details materialise.
