#251: Cowboy builder

I’ve been thinking a lot this week about something David Polfeldt said to me in an early instalment of Max HP, Hit Points’ occasional — and soon to return! — developer profile series. David used to be managing director of Ubisoft Massive, where he oversaw a culture quite unlike any other I have encountered in all my years writing about games and the people that make them. 

David shaped his leadership style not by following MBA best practice, or even game-industry convention, but elite sports. It’s about nourishing talent, harnessing passion, and establishing a support structure to enable a phenomenally talented team — of football players, of F1 drivers, of game developers — to do their best work. It was an approach, David explained, that often bumped up awkwardly into the more traditional management style employed by the higher-ups at Massive’s parent company, Ubisoft.

“Someone who’s in head office and not directly involved in the game team might step in, have a lot of opinions about the game and tell you why it’s not going to sell. That could happen — it might even be necessary — but the delivery is key. If that person steps in as a bully and treats people like idiots, they are creating a development problem, a momentum problem. 

“It was really hard for traditional managers to accept. They believe that managers know better, that they have a superior perspective or are more experienced. They think everything needs to be done with a firm hand, a waterfall method and clear deadlines, and a lot of pressure on key people. I call that the ‘tyrant method’, and to me it’s tiring. If you believe as a manager that your survival strategy, and your success, depends on your ability to successfully execute tyranny then no, Massive probably isn’t for you.”

With that established, let us now turn our attention to Hiroki Totoki, interim replacement for  departing PlayStation end boss Jim Ryan. Totoki, who is also Sony Group’s president, COO and CFO, was in the headlines last week for saying in an investor Q&A that firstparty PlayStation studios needed to pull their socks up a bit. After praising their “creativity and knowledge of live services,” Totoki warned that “there [is] room for improvement from a business perspective with regard to areas such as the use of business expenses and assuming accountability for development timelines.”

This week Sony issued a revised version of that translation, clarifying that Totoki wasn’t, in fact, talking about the PlayStation Studios group as a whole. He was talking, solely, exclusively, damningly, about Bungie. I doubt David Polfeldt is too impressed.

We should take this with a pinch of salt, certainly. Totoki was talking to investors and analysts following the release of Sony’s latest financial results, which were, as we will discover in a moment, not great. Perhaps we can therefore forgive him for playing to the crowd with a bit of the ol’ capitalist virtue signalling. Making clear there’s a new sheriff in town, that sort of thing. From our side of the saloon doors, however, it looks ominous, and not just because of the late-stage-capitalist stink. It’s because it makes abundantly, screamingly clear that Totoki is not a games guy. In fact, he has no idea what he’s on about. I can think of few ways of more explicitly conveying that you have never so much as seen a videogame than presenting the observation that Bungie struggles with deadlines as some grand insight. My guy! It’s Bungie! It’s like you coming to my house and pointing out the gutters need doing. We know. (Any day now, I promise.)

The contrast between Totoki and his departing predecessor is pretty stark. Ryan, for all his evident flaws — and the litany of reasons for which his resignation has been celebrated, rather than lamented, by the PlayStation community — is at least of good breeding as game execs tend to go. He has been part of the PlayStation furniture since the very beginning, and while he may have made some pretty questionable decisions during his time at the helm, they were at least informed, and backed up, by decades of earned experience. Totoki, by contrast, seems to be revelling in his role as an uninformed disruptor, here to rattle some cages, to shake a few things up. We know from bitter experience how that sort of thing tends to play out.

Totoki’s comment may have earned him some credit with the investor community, but it will be sorely demotivating for Bungie, a studio already struggling horribly for morale. It is in the final weeks of development on arguably Destiny 2’s most important expansion to date, working under the gloom of tanking player engagement and revenue; it has already conducted one round of layoffs, and more seem sure to follow. They need a Polfeldt-style arm around them, but Totoki has other ideas. To stretch our sheriff analogy to breaking point, he has burst into the saloon, all barging shoulders and icy stares, spitting tobacco at the feet of the very people he will need to be on his side if he is to turn PlayStation’s fortunes around.

And he really does need them, to be clear. Microsoft’s recent shenanigans have rather taken the focus off Sony, but the PlayStation maker has plenty of problems of its own. Last week it lowered its hardware forecasts for the current fiscal year from 25m to 21m; the initial projection always seemed overambitious, but it was a substantial whiff nonetheless, and it wiped $10bn off Sony’s market cap last week. CNBC spoke to that rarest of God’s creations — an analyst with something insightful to say — who pointed out that PlayStation’s operating margins have halved in the last two years, and are trending towards their lowest point in a decade. 

This is despite a number of apparent tailwinds — a continuing shift towards digital distribution reducing the overheads of physical goods; a successful subscription business — that on paper should be pushing margins higher. The reality for Sony, like the rest of us, is that inflation and the cost-of-living crisis have put a squeeze on things. Development budgets and project timelines have ballooned. PS5 isn’t getting any cheaper to manufacture, and you are not going to sell many more of them when the interim boss is warning the console is coming into “the latter half of its lifetime” and willingly putting a pin in the hot-air balloon of hype by saying there’ll be no ‘major franchise’ games releasing before April 2025. God, he really is new to this, isn’t he. I hope the talented, hardworking folks at Bungie are able to dismiss his slander as the witterings of a mere arriviste, more interested in hyping up the investor set than he is the PlayStation community.

Cheerio, free readers! Wishing you all a lovely weekend. If you’d like the rest of today’s edition — another 1,000 or so words rounding up the rest of the week’s news, and the best of the bulging Hit Points mailbag — kindly click the below button, cough up £4 a month, and join ussss.