Former Sony Interactive chairman says exclusivity is bad for the video game industry

[Alfonso Maruccia]

In a nutshell: Shawn Layden is singling out platform exclusivity as one of the main challenges the modern gaming industry must address. Consumers are different now, and big companies like Sony or Microsoft need to understand how to properly serve them without shooting themselves in the foot.

Before being appointed as Tencent Games' new strategic advisor, Shawn Layden held various roles at Sony. The former chairman of Sony Interactive Entertainment Worldwide Studios (now simply known as PlayStation Studios) said in a recent interview that exclusivity is the Achilles' heel of modern gaming development.

Layden talked with VentureBeat about the turbulent times the industry is facing right now, offering his advice after joining Sony in the 1980s and spending multiple decades in the business. Development costs for a single AAA game now exceed $200 million, Layden said, which means that you cannot afford to sell it on just one hardware platform.

Exclusivity reduces the publishers' addressable market, especially when the world is providing so many live-service games or free-to-play products. Bringing a game to additional platforms means "opening the funnel" to get more people in, he said.

In the free-to-play world, exclusivity makes no sense, as 95 percent of users are expected to spend absolutely nothing on a game. Layden remarks on how Helldivers 2 proved this simple truth, coming out on PlayStation and PC simultaneously. Hardware developers are always trying to maintain their "stranglehold" on the business by creating platform-exclusive games, which has proven to be a lucrative practice so far.

But "consumer minds are changing," Layden said, and they are not buying a new mobile phone every nine months anymore. Hardware companies will not be able to retain their exclusivity stranglehold for long, and they need to accept a new future where people will get their gaming fix in different ways – and in different places.

The "beast" of gaming is adapting to these new business opportunities, and marketplace strangleholds can't be maintained forever, Layden added. Console manufacturers are indeed showing that they are now more willing to provide enhanced support for other platforms.

Sony recently confirmed its plans to bring PS5-exclusive games to PC, while Microsoft is working to port Xbox and PC exclusive titles to PlayStation 5. As for mobile, things are still a bit hectic, and Apple is trying to keep its stranglehold on the iOS marketplace as long as it can. Brussels authorities are watching.

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https://www.techspot.com/news/102220-former-sony-interactive-chairman-exclusivity-bad-video-game.html

 

[bviktor]

The very thing that made the PlayStation a success? Ok I guess.

 

[redgarl]

Yeah, go tell that to Nintendo or the Actual SIE president...

 

[The Talking Tech]

He is right... if anyone knows how PlayStation works as a company that's Shawn Layden...after all he was with the company for 32 years and was running the PlayStation 4 throughout its most successful era.

 

[poshflamingos]

The very thing that made the PlayStation a success? Ok I guess.

Sony's financial results for 2023 were not good, with high revenue but low net profit. That's mostly due to the ballooning size of AAA game development, meaning with their massive budgets even when games sell well their returns on investment are still disappointing.

Exclusivity may have made Playstation successful in the past, but today we're in a different market and different economy, and spending comically large budgets on game development just to leave those games confined to a single platform no longer makes financial sense. Which is why Sony is turning to PC more and more in the past few years, and even dipping their toes in simultaneous releases now with Helldivers 2.

 

[Disiw]

Consoles needs exclusives to do well.

This is why PS beats Xbox.

Just look at Switch. If Switch was all about multi platform games it would not sell.

 

[Disiw]

Sony's financial results for 2023 were not good, with high revenue but low net profit. That's mostly due to the ballooning size of AAA game development, meaning with their massive budgets even when games sell well their returns on investment are still disappointing.

Exclusivity may have made Playstation successful in the past, but today we're in a different market and different economy, and spending comically large budgets on game development just to leave those games confined to a single platform no longer makes financial sense. Which is why Sony is turning to PC more and more in the past few years, and even dipping their toes in simultaneous releases now with Helldivers 2.

Sony struggled with PS5 output because of chip production for 2 out of 3 years since PS5 released. Just like every other company that relied on chip production. This was expected.

Sony released many games for PC, even before all this. Always released much later than the PS version, grabbing some free money in the process. Smart decision really.

Nintendo should do the same, they would make tons of money selling Nintendo games for PC.

PS5 beats Xbox Series X and S hard in sales. Even if PS5 don't have much "exclusives"

Xbox is mostly about Game Pass and its not selling well either. The exact opposite of doing big AAA exclusives. Microsoft had little to none for XSX/XSS either. Most are delayed or even cancelled.

PS5 outsold XSX 3:1 if not 4:1 now. Microsoft don't want to talk about sales numbers at all anymore. We will still see a next gen Xbox tho. Xbox brand is not only about console, it also exist on Windows and accesories are made with PC (Windows) in mind as well.

PS5 Pro launches this year. GTA 6 is out in 2025. GTA 6 will sell tons of consoles and PC won't get it anytime soon.

A console generation is ~8 years on average. PS6 is 2028+
PS5 have plenty of time left.

And thats why you don't buy a console on launch day. The good games always comes later. The first years are mostly dry and OS/system is fixed alot in this timeframe.

PS5 Pro will put PS5 Slim below 400 dollars.
PS5 Pro will probably be 599 dollars.
Sony don't have any problem really.

Helldrivers 2 showed that you don't need to do big AAA games to do a smashhit. Lowering price = More sales. Good gameplay sells.

AAA development cost is simply too high in most games today. Not many are willling to splash 70-100 dollars for a game on release, riddled with bugs.

Gaming PC + Playstation remains the best combo and lets you play it all, including Nintendo emulation. Thats why Playstation outsells Xbox with absolute ease and I don't see this change even if Microsoft is buying up game studios. They are doing this for both PC and Xbox really.

Keeping gamers locked in to Windows over Linux eventually.

 

[erickmendes]

Consoles needs exclusives to do well.

This is why PS beats Xbox.

Just look at Switch. If Switch was all about multi platform games it would not sell.

I think they are taking a page from Streamming platforms succes...
Link exclusives to game services (PS Network, X-box Game Pass, Nintendo OnLine...).

Then make that services avaliable on any platform, just like you can watch your favorite stream service anywhere, any TV, any smart stick, smart phone...

Bingo, big bucks.

Why keep on fighting for console dominance when you can sell your game service on any device and let gamers pay your monthly fee to have access to game service exclusives?

They would have access to a bigger gamers base, they would make a lot more money from game service monthly fees and non exclusive game sells, also that would take away the risk of exclusive games for new consoles flopping because the console itself flopped.

Consoles could be a bussiness split from games, just as streamming is split from hardware... They can still have hardware divisions but that won't affect games financial results.

That wallgardened eco-system model that Apple uses don't works on every scenario... Gamers don't need ecosystem as iOS users need today. General avaliability is more lucrative to gamer studios.

 

[Disiw]

I think they are taking a page from Streamming platforms succes...
Link exclusives to game services (PS Network, X-box Game Pass, Nintendo OnLine...).

Then make that services avaliable on any platform, just like you can watch your favorite stream service anywhere, any TV, any smart stick, smart phone...

Bingo, big bucks.

Why keep on fighting for console dominance when you can sell your game service on any device and let gamers pay your monthly fee to have access to game service exclusives?

They would have access to a bigger gamers base, they would make a lot more money from game service monthly fees and non exclusive game sells, also that would take away the risk of exclusive games for new consoles flopping because the console itself flopped.

Consoles could be a bussiness split from games, just as streamming is split from hardware... They can still have hardware divisions but that won't affect games financial results.

That wallgardened eco-system model that Apple uses don't works on every scenario... Gamers don't need ecosystem as iOS users need today. General avaliability is more lucrative to gamer studios.

Nvidia is king of cloud gaming with Geforce Now, however cloud gaming is still mostly for casual gamers and probably won't change.

People with no money for proper hardware also uses slow wifi at home meaning Cloud Gaming is even more trash and useless.

Cloud gaming won't replace consoles anytime soon, if ever. Latency is the big issue and image quality suffers alot when framerate is high.

Its fine for some casual gamers tho, if they mostly play slower paced games.

 

[Theinsanegamer]

Sony's financial results for 2023 were not good, with high revenue but low net profit. That's mostly due to the ballooning size of AAA game development, meaning with their massive budgets even when games sell well their returns on investment are still disappointing.

Exclusivity may have made Playstation successful in the past, but today we're in a different market and different economy, and spending comically large budgets on game development just to leave those games confined to a single platform no longer makes financial sense. Which is why Sony is turning to PC more and more in the past few years, and even dipping their toes in simultaneous releases now with Helldivers 2.

Correlation is not causation. Ballooning budgets from greedy incompetent dev houses don’t mean that exclusivity doesn’t work.

Look at Xbox, look how many they sell vs PlayStation. Why would Sony even exist if all games are cross platform? They would become the odd one out.

Eliminating exclusivity helps consumers but derails console makers.

 

[The Talking Tech]

Consoles needs exclusives to do well.

This is why PS beats Xbox.

Just look at Switch. If Switch was all about multi platform games it would not sell.

At the end, whatever makes more money is the right solution.

What do you think Sony would rather have.. 5 million game sales just on PS5 or 100 million across multiple devices.

That's the reason Xbox doesn't have that many exclusives, because multiplatform money is king.

 

[erickmendes]

Nvidia is king of cloud gaming with Geforce Now, however cloud gaming is still mostly for casual gamers and probably won't change.

People with no money for proper hardware also uses slow wifi at home meaning Cloud Gaming is even more trash and useless.

Cloud gaming won't replace consoles anytime soon, if ever. Latency is the big issue and image quality suffers alot when framerate is high.

Its fine for some casual gamers tho, if they mostly play slower paced games.

I'm not talking about cloud gaming, I'm talking about the avaliability of PS exclusives thru PS Network running on XBox or XBox Game Pass running on PS5... Games app stores avaliability across consoles so Sony would reach Xbox owners and MS would reach PS5 owners.

Pc/console owners acessing Nintendo/Sony/MS games/services, bigger consumer base. No cloud gaming, just universal avaliability.

A big game Studio can sign for game service exclusivity with MS Game Pass, so this little could be avaliable to buy by anyone with an Game Pass paid account on any device that also got the minimum requirements to run the game. That way the game exclusivity would make more money for the exclusivity owner, reaching more gamers.

And that exclusivity could also be time based just as Epic Game Store is doing to fight Steam dominance.

MS move to make Xbox games avaliable on Xbox and Windows Store on PCs it's already a move on that direction, and seems like MS is trying to reach further:

"Microsoft has been gradually moving Xbox away from the idea of a single piece of hardware in recent years, with ambitions to reach billions of gamers across consoles, PCs, and mobile devices. Now it’s officially bringing four Xbox-exclusive games to PS5 and Nintendo Switch amid an “Xbox Everywhere” effort inside Microsoft that will likely see even more games arriving on rival consoles."

Microsoft’s gaming chief on Xbox games coming to PS5, next-gen hardware, and more

Microsoft wants to grow Xbox in new ways.

www.theverge.com

That's what I was talking when I said about streamming service, not the way stream works but the bussiness model.

 

[Nobina]

So what he's saying is: Sony is bad for the video game industry?

 

[Dreadcthulhu]

The whole ballooning game development cost here can't be understated; there is something seriously wrong with how AAA game studios are managing their development. The Spiderman 2 video game cost Sony $300 million dollars to make; meanwhile its predecessor, made not that long ago (2018) only cost $100 million to make. Its really hard to see why the sequel needed trice the budget, and whatever it is driving up costs is not going to suddenly triple sales.

 

[human7]

While games seemingly continue to be more open in turns of availability and distribution, video and TV continues to feel more fragmented and closed. Game piracy is more or less stable, but video and TV piracy is going up again. Would an executive in the streaming industry kindly become enlightened and share the opinion that exclusivity is bad?

I guess the difference is that games are the TV equivalent of "pay per view" or "pay per episode" (yes it's a flawed analogy) so access to the marketplaces is free, while movies/TV is the opposite: paid marketplace but unlimited consumption within that marketplace (with exceptions). I'm not at all sure that a pay-per-view model is better than having 10 different streaming subscriptions, but exclusivity and fragmentation is definitely hurting that part of the entertainment world.

 

[poshflamingos]

Correlation is not causation. Ballooning budgets from greedy incompetent dev houses don’t mean that exclusivity doesn’t work.

Except in this case is absolutely is causation. Sony is struggling financially specifically because their games now offer low returns because they cost too much to develop.
And "greedy inconpetent dev houses"? Are Insomniac greedy and incompetent? Are Naughty Dog? Santa Monica?

Why would Sony even exist if all games are cross platform?

Well, guess what? Sony won't exist in the current form either, because the console market is stagnant and hasn't grown for the past 2 generations, hardware sales are a loss leader that doesn't make them money, and AAA game development is becoming too expensive to offer good returns. They don't have a choice, if they don't change their model they'll wither.

Eliminating exclusivity helps consumers but derails console makers.

Console makers are already derailed. The changes they're making (Xbox focusing on services and subscriptions, Sony opening up to more platforms) are to combat that.
Your mistake here is thinking the console market is fine as it is and can just continue like that indefinitely. Sony and Microsoft are making those sweeping changes to their business models because they know that is not true.