With the recent reveal and ongoing rollout of a select few previously-Xbox console exclusive games headed to PlayStation and Switch, along with the huge and saddening number of gaming studios suffering layoffs and closures on all sides of late, it’s a tumultuous time in the games industry and questions around development budgets, exclusivity and the viability of certain sectors of the market seem to be in question more than ever.
It’s a topic that Shawn Layden, previously the Sony Interactive Entertainment president and CEO before Jim Ryan, broached in an interview with GamesBeat’s Dean Takahashi, a conversation in which the former CEO called exclusivity an “Achilles’ heel” for games with development budgets in the 100s of millions.
“When your costs for a game exceed $200 million, exclusivity is your Achilles’ heel,” Layden told Takahashi when talking about how narrow availability can contribute to markets not growing. “It reduces your addressable market. Particularly when you’re in the world of live service gaming or free-to-play. Another platform is just another way of opening the funnel, getting more people in. In a free-to-play world, as we know, 95% percent of those people will never spend a nickel. The business is all about conversion. You have to improve your odds by cracking the funnel open. Helldivers 2 has shown that for PlayStation, coming out on PC at the same time. Again, you get that funnel wider. You get more people in.”
How former PlayStation boss views gaming's tumultuous time | Shawn Layden interview https://t.co/mP2w9dOIe9
— GamesBeat (@GamesBeat) March 8, 2024
It’s not just live service or free-to-play games that need to think about this, Layden reckons, with big-budget single player games needing to attract bigger audiences to remain viable, noting that the market for the leading names in AAA gaming like Call of Duty or GTA isn’t necessarily changing or growing in a way that lines up with ballooning costs.
“For single-player games it’s not the same exigency. But if you’re spending $250 million, you want to be able to sell it to as many people as possible, even if it’s just 10% more. The global installed base for consoles–if you go back to the PS1 and everything else stacked up there, wherever in time you look at it, the cumulative consoles out there never gets over 250 million. It just doesn’t. The dollars have gone up over time. But I look at that and see that we’re just taking more money from the same people. That happened during the pandemic, which made a lot of companies overinvest. Look at our numbers going up! We have to chase that rocket!”
“We’re not doing enough to get heretofore non-console people into console gaming. We’re not going to attract them by doing more of the shit we’re doing now,” Layden frankly puts it. “If 95% of the world doesn’t want to play Call of Duty, Fortnite, and Grand Theft Auto, is the industry just going to make more Call of Duty, Fortnite and Grand Theft Auto? That’s not going to get you anybody else.”
While those aren’t necessarily examples of “exclusive” games, the argument is the same – Layden thinks that simply selling the same games to the same audience probably isn’t enough to grow the market for them in line with increasing development budgets, at some point something’s got to give.
