#34: Greener pastures

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I was puzzled when Shawn Layden left Sony in 2019. It seemed like he was just getting started — he’d only been in post as president of SIE Worldwide Studios for about 18 months when he quit, and with PS5 around the corner he had a real opportunity to put his stamp on things. Besides, I was sorry to see him go, as I’ve always had a soft spot for him. He was the first person I ever left the Edge office to interview, when I was dispatched to London for an afternoon 124 years ago to interview him about Sony’s short-lived Spotify competitor, Music Unlimited, which he was heading up. We basically talked about music for 40 minutes and I’m not sure I got anything printable out of it, really, but he was good value. I’ve always remembered it fondly.

In interviews since his departure, however, Layden’s motivations have become a little clearer. He’s been at it again this week, talking to GI.biz about his latest venture, an advisory position at Streamline Media Group. There’s some good stuff about consolidation, which we’ve already talked about at length on Hit Points. But I’m most struck by his comments about subscription services. Naturally, they’ve been interpreted in some quarters as a swipe at Microsoft. But I think Layden’s concern is both well placed, and runs much wider than just one company.

“It’s very hard to launch a $120 million game on a subscription service charging $9.99 a month,” he says. “You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment. But if you only have 250 million consoles out there, you’re not going to get to half a billion subscribers. How do you circle that square? Nobody has figured it out yet.”

Sure, I’ll admit that sounds like a dig at Game Pass. (I’m also not entirely sure about his maths.) But it’s been clear for a while that Microsoft isn’t bothered about making a profit off its subscription service at the moment, and likely won’t be for years. It’s still in the land-grab phase, and profit comes much later. Besides, Microsoft made $46.2 billion in revenue last quarter. It can fund four $120 million games a day if it wants to, and still have enough left over for a couple of yachts. It will be fine.

Rather, I think Layden is worried about everyone else. He speaks here too about the rising cost of game development — something he also put into pretty terrifying relief in his GameLab talk last year — and it’s when you put it all together that you start to see his point about just how messed up everything is. Games cost too much to make, but are still, despite Sony’s new £70 price point, sold too cheaply. While the game industry, or at least this part of it, is experiencing significant revenue growth, the overall playerbase isn’t growing all that much; rather, developers and publishers have worked out how to make more money from each customer.

To mitigate risk, those on the biz side chase consolidation. Those on the creative end stick to what they know will work — 50-hour games with big guns, bigger worlds, and insane production values — which stymies innovation while pushing development costs even higher. (For more on this, I must point to this excellent, insightful and thoroughly depressing thread from Fable co-creator Dene Carter from over the weekend.)

None of this is new, really. This is a problem that’s been eating away at the industry for a while. But the longer it goes unaddressed, the worse it gets — and on this, as with so many other issues, the industry is putting its head in the sand. So, yes, I now understand why Shawn Layden left Sony. In fact I’m amazed he even lasted as long as he did.

MORE!

• Staff at Blizzard Entertainment are staging a walkout today in protest at Activision Blizzard’s dismal corporate response to, well, you know, everything. Overnight Bobby Kotick released a pretty strongly worded statement, pledging among other things to immediately evaluate all managers and fire those who have failed in their duty of care to staff. Whether this comes in response to the walkout threat, or the fact that Activision stock dropped almost 7% yesterday, is open to question. I would like to think it’s a little of both, but I’m probably wrong.
• Organisers of PAX West have updated their health and safety guidance ahead of September’s show, insisting not only on face masks being worn indoors but on attendees also providing proof of vaccination. Quite the turnaround from the original plan, but I’m all for it.
• The beta for Amazon’s long-awaited MMO New World attracted over 200,000 players on Steam. I’m sure a chunk of this can be put down to people being bored of WOW and furious at Blizzard, and another to simple curiosity at something new and high-profile. But this is a good start for a game I think most of us wrote off years ago.
• Grand Theft Auto V leaves Game Pass in a couple of weeks, just four months after joining it. We focus so much on the value proposition to players, and the economics of it, that I think we overlook how Game Pass can be used as a marketing tool of sorts. Four months is plenty of time to get through GTAV’s singleplayer story — and it’s also more than enough time for GTA Online to sink its hooks in, drumming up interest in the next-gen update due in November, and maybe even compelling a purchase in the months in between.

That’s it for today. As usual, please do the sharing/subscribing thing if you’ve enjoyed it. And if you’d like to respond to anything in this, or any other, edition of Hit Points, and don’t fancy using the comments system (I don’t blame you; I might just turn it off), you can just reply to this email, and your response will be delivered directly to my inbox. Technology! What a thing. I’d like to get readers more involved in Hit Points as it continues to grow, so if there’s something on your mind, do get in touch. See you Friday!