Former Playstation Boss Shawn Layden issues warning about non-endemics breaking into games

[Bishop89]

GameIndustry.biz

"First, consolidation can be an enemy of creativity," he said, referring to the large-scale acquisitions and wave of studio closures we've seen in recent years. "I also think rising costs in gaming are an existential threat to all of us. And the entry of non-endemics into the sector – otherwise known as the 'barbarians at the gate.'


"Right now we see all the big players going, 'Oh, gaming? It's bringing in billions of dollars a year? I want a piece of that' And so we have Google, Netflix, Apple and Amazon wanting to get piece and trying to disrupt out industry."


Layden said the industry should take heed of what happened to other entertainment industries. Music, he said by way of example, was irreversibly disrupted when Apple "convinced everyone that 99 cents per song was a good idea." Similarly, he said Netflix has disrupted the movie business – which used to centre around going to cinemas – buy "getting some content, getting some licences, and nailing it to your house."

"I'm hoping gaming will be the first industry where we disrupt ourselves," he continued. "Where it doesn't take a Google or an Amazon to completely flip the table. We should be smart enough to see these changes coming and prepare ourselves for that eventuality."

Layden added that some of the larger companies have "figured out that just having tech doesn't mean you can make a game." This was perhaps best demonstrated by the shutdown of Stadia last year, just three years after Google's cloud gaming service launched.

Dring countered that both the market-leading PlayStation and its rival Xbox were introduced by companies that were non-endemic to the games industry. Layden acknowledged this but observed that Sony, for one, understood its own limitations when it came to entering the games market.

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"[Sony] knew enough that entertainment was its own beast, so Electronics knew it couldn't manage this business by taking all the guys from the CD division and go after games," he explained. "So in the initial stages of the company, it was a joint venture between Sony Electronics and Sony Music Japan. They knew they had to bring the entertainment… right from the beginning. The people handling the advertising, marketing, publisher relations, PR – those were all Sony Music guys – and they were soliciting publishers to support the platform.

"PlayStation knew that we couldn't do what Sega and Nintendo did and [provide the bulk of the software], we didn't know enough how to make it. We had to be the third-party platform, so we had to get Namco, Square, EA, Activision. Those Sony Music guys are the ones that got Square to move Final Fantasy 7 off of Nintendo and onto PlayStation, probably the biggest sea change move.

"So yeah, we weren't endemic, but I think we brought the entertainment piece in, which really helped accelerate the success of PlayStation."

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[MJForum Poster]

Some really good points from Shawn. I miss him being a key part of Playstation

 

[pswii60]

Music, he said by way of example, was irreversibly disrupted when Apple "convinced everyone that 99 cents per song was a good idea. "

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Nah, that - and later streaming - was simply giving customers what they wanted as an alternative to internet piracy of music that was ridiculously mainstream at the time.

 

[giapel]

"I'm hoping gaming will be the first industry where we disrupt ourselves,"

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Not sure that's necessarily a good thing though

 

[fiendcode]

While there's some truth to this, it was also true in 1994 or 2001. None of these concerns are really new to gaming, the only novelty is the framing.

 

[Agni Kai]

I miss Shawn. I think PlayStation had its best years when he was in charge, but what do I know.

He raises some valid and interesting concerns in here. The way I see it, I don't even think PlayStation and Xbox will be around the way we know them in a couple of decades.

 

[phanboy4]

Nah, that - and later streaming - was simply giving customers what they wanted as an alternative to internet piracy of music that was ridiculously mainstream at the time.

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... while simultaneously destroying a revenue stream for artists by introducing another powerful extractive entity as a gatekeeper, resulting in a market that rewards the actual creators even less than it did before.

 

[ghostcrew]

As someone who worked in a reasonably high level in the music industry for a decade and a half over that whole period - the line about the music industry and Apple is bizarre and I disagree.

"Music, he said by way of example, was irreversibly disrupted when Apple "convinced everyone that 99 cents per song was a good idea.""

Music was irreversibly disrupted by rampant and easy piracy, absolutely tanking the value of recorded music. The industry had to play catchup and Apple popularising 99 cents a song and Spotify popularising streaming for a sub are two of the only things that actually bought income back via recorded music.

Apple "convincing everyone that 99 cents per song was a good idea" was a much better solution than everyone being convinced that those songs were worth zero cents, which is where we were in the Limewire/Oink days.

Apple were absolutely disruptive to the music industry, he's right. But disruption isn't always negative. The arts have always seen disruption bringing in change and sometimes it's a postiive.

 

[entremet]

I wonder what he thinks of the psn price hike?

 

[Incubuster]

Wish he never left playstation. The range of experiences they made were much more varied when he was around.

 

[Synth]

"PlayStation knew that we couldn't do what Sega and Nintendo did and [provide the bulk of the software], we didn't know enough how to make it. We had to be the third-party platform, so we had to get Namco, Square, EA, Activision. Those Sony Music guys are the ones that got Square to move Final Fantasy 7 off of Nintendo and onto PlayStation, probably the biggest sea change move.

"So yeah, we weren't endemic, but I think we brought the entertainment piece in, which really helped accelerate the success of PlayStation."

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So basically, disrupted the existing market then.

Like, I can understand where he's coming from with his concerns... but basically, anyone that comes in without understanding the market will probably end up like Google with Stadia. And if someone does come in and disrupt the market, that inherently implies a level of understanding for the audience that they need to reach.

 

[Bryo4321]

Nah, that - and later streaming - was simply giving customers what they wanted as an alternative to internet piracy of music that was ridiculously mainstream at the time.

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Yeah, I think his perspective there is coming from inside the Sony CD/music distribution bubble.

 

[oxymoron]

... while simultaneously destroying a revenue stream for artists by introducing another powerful extractive entity as a gatekeeper, resulting in a market that rewards the actual creators even less than it did before.

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No? Piracy was killing music industry revenue. The iTunes store stemmed that bleeding a little bit, but it's absolutely ahistorical to say that 99¢ singles is the reason that creators are rewarded less than before.

 

[aloner]

As someone who worked in a reasonably high level in the music industry for a decade and a half over that whole period - the line about the music industry and Apple is bizarre and I disagree.

"Music, he said by way of example, was irreversibly disrupted when Apple "convinced everyone that 99 cents per song was a good idea.""

Music was irreversibly disrupted by rampant and easy piracy, absolutely tanking the value of recorded music. The industry had to play catchup and Apple popularising 99 cents a song and Spotify popularising streaming for a sub are two of the only things that actually bought income back via recorded music.

Apple "convincing everyone that 99 cents per song was a good idea" was a much better solution than everyone being convinced that those songs were worth zero cents, which is where we were in the Limewire/Oink days.

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Arguably Spotify brought the industry back to songs being worth zero cents (at least for musicians unless you're Taylor Swift or the major labels) whereas iTunes was somewhat positive for the industry (and I would say still sold albums as a whole reasonably decently while giving people the option to buy just the song they like)

 

[Lowblood]

I mean I agree but I think the threat of the non-endemics started years ago, lol. Google, Apple, Amazon, and Netflix have all had their hands in gaming for quite a while now. Once it became clear that CoD and Madden could outgross movies, those companies were already moving in.

Granted, his point is still true since those groups also haven't yet completely changed the business, either. They've largely been struggling (with Apple being the main exception).

 

[Spinluck]

... while simultaneously destroying a revenue stream for artists by introducing another powerful extractive entity as a gatekeeper, resulting in a market that rewards the actual creators even less than it did before.

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You're thinking of music streaming.

 

[Pancracio17]

Kinda weird interview? Hes downplaying how disruptive playstation and xbox already were, and he also made that music comment which seemed like a misread of the situation.

Though the general point that gaming is probably about to be disrupted and that companies should prepare is true.

 

[PachaelD]

"I'm hoping gaming will be the first industry where we disrupt ourselves," he continued.

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That already happened though, in the form of 1) mobile gaming, 2) casual gaming and 3) GAAS (games as a service). Related - for a while Aniplex (Sony Music) were in front of the pack with FGO but even that seems be fading away a little bit at a time with the fierce competition.

 

[Simon-chan]

I miss Shawn. I think PlayStation had its best years when he was in charge, but what do I know.

He raises some valid and interesting concerns in here. The way I see it, I don't even think PlayStation and Xbox will be around the way we know them in a couple of decades.

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Wish he never left playstation. The range of experiences they made were much more varied when he was around.

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He was better than Ryan, but that's the lowest of low bars. He started the whole "fewer, bigger games" bullshit, and now he's complaining about rising costs? Give me a break.

 

[Vashetti]

I'm still baffled at him stepping down, it seemingly happened overnight out of nowhere. I wonder what went down?

 

[iceblade]

Wish he never left playstation. The range of experiences they made were much more varied when he was around.

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Same. And you could see they were trying to understand and win over customers, instead of just seeing them as dollar signs.

I'm still baffled at him stepping down, it seemingly happened overnight out of nowhere. I wonder what went down?

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He says it was exhaustion / burnout but there's a rumor that it was alternatively (partly?) due to a power struggle.

Shawn Layden Reveals Why He Left Sony PlayStation

Became burnt out

www.pushsquare.com

Reddit - Dive into anything

www.reddit.com

 

[Xando]

We already see the consequences of one company basically dominating the console market so unless you are Sony more competition spreading the market will be beneficial to everyone.

 

[iceblade]

Accidental double post

 

[Sadire]

Little bit of dread sinking in thinking about other companies wanting to play the game, thinking it's easy money.

But aren't we already seeing companies think video games are easy money, with half finished products, early access schemes for billion dollar companies, and other franchises throwing aside potential risk and taking the easy road with games based on templates?

Would more competition and other players with more interest in carving out their slice with, hopefully, new experiences, not create a more compelling environment for games?

Nah, that - and later streaming - was simply giving customers what they wanted as an alternative to internet piracy of music that was ridiculously mainstream at the time.

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While it may be better it's hardly what everyone wants.

A complete offering on a platform of your choice, that pays artists well enough. That's the dream, the reality is not quite as close.

 

[thisismadness]

I mean, Apple and Google have already disrupted the market though. The number 1 and number 2 gaming platforms in the world are iPhone and Android, traditional gaming is still healthy but its a shrinking slice of the whole pie.

 

[emgeejay]

No? Piracy was killing music industry revenue. The iTunes store stemmed that bleeding a little bit, but it's absolutely ahistorical to say that 99¢ singles is the reason that creators are rewarded less than before.

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Interesting that at their peak, cassettes and CDs were still selling about equally. That's like if VHS and DVD harmoniously coexisted instead of one supplanting the other.

 

[Cantaloup]

Sony was a "non-endemic" before the PlayStation… 🙄

 

[AgeEighty]

Yep I agree with all this. It's part of why I do not understand so much of this forum's cheerleading for mergers and acquisitions, and why I'm not in any way enthusiastic about the entry of companies like Google and Amazon into gaming and have been glad they've mostly seen failure.

Interesting that at their peak, cassettes and CDs were still selling about equally. That's like if VHS and DVD harmoniously coexisted instead of one supplanting the other.

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DVDs still have a significant business in spite of being two generations behind.

 

[Jubilant Duck]

While it may be better it's hardly what everyone wants.

A complete offering on a platform of your choice, that pays artists well enough. That's the dream, the reality is not quite as close.

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Consumers as a whole don't give a shit about artists being paid well enough if it affects the price they have to pay.

If they did, existential-threat levels of music piracy would never have existed in the first place.

 

[Faddy]

While there's some truth to this, it was also true in 1994 or 2001. None of these concerns are really new to gaming, the only novelty is the framing.

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I don't think they are the same thing because when Sony and Microsoft entered the gaming arena they essentially were copying the business model of the established players. Sell consoles, collect licensing fees.

If you do want to pull a lesson from that. Microsoft's big innovation was bringing paid online. Nintendo and Sony were kind of iffy about online, it didn't really seem to have value. Microsoft had a different philosophy and decided that they could charge for online and it would be a large part of the future of gaming.

Sony eventually brought out their online services and to start with it was free but the chance to make the same cash microsoft was making was too tempting and suddenly gaming was $50 more expensive per year. Even nintendo charges for a lot of online stuff.

 

[Gavalanche]

Same. And you could see they were trying to understand and win over customers, instead of just seeing them as dollar signs.

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I am not the biggest fan of Jim Ryan, but I feel he gets lumped in with a lot of stuff that happened before he was promoted. Plus required for online play, the fight against crossplay, the disinerest in indies (it was actually Ryan who kick started that again), the closure of studios like Evolution, etc etc. I totally believe the likes of Adam Boyes and Gio Corsi cared, but I am not sure if Shawn Layden was as consumer friendly as he appeared, I think he was just better at PR and came across as a nicer person. Jim Ryan puts his foot in his mouth, but the change of playstaion was already happening mid ps4 generation.

 

[ghostcrew]

Interesting that at their peak, cassettes and CDs were still selling about equally. That's like if VHS and DVD harmoniously coexisted instead of one supplanting the other.

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I think cassette and CD filled different desires for consumers - more so than VHS and DVD did at least.

I would still buy cassettes even when I had a CD player at home because I would listen to them on my Walkman. It took me a while to get a portable CD player and, even when I did, the Walkman was still amazing because it was so much smaller and could also play your cassettes that you'd taped from the radio/mixes etc.

Definitely had a lot of records that I bought on cassette and then we ultimately got a home copy on CD too.

VHS and DVD were largely just different time periods (with a little crossover).

 

[SageShinigami]

The tech giants have largely proven bad at upsetting the kind of market that Sony/Microsoft/Nintendo exist in. IE, the traditional $70 gaming product. They can be quite disruptive with mobile gaming and even possibly newer tech, but most of them don't feel like they're doing a lot yet with the kind of gaming that enthusiasts care about. They COULD in the future upset that, just by the ripples they make over in mobile gaming, but that's not quite here yet.

The actual disruptive influences right now are companies like Tencent and NetEase. Companies with more money than they know what to do with, and who have proven they want to make a splash in the enthusiast gaming world.

 

[RedHeat]

He has some good point, but a lot of it doesn't make a lick of sense.

 

[Praedyth]

I disagree. I think we could use a little more competition in the high end console market and the only companies with enough money to bankroll an entry into the gaming market are the giant ones like Apple, Amazon, Google, etc. Disruption can be good or bad, it really depends. I'd rather have Microsoft not be the only trillion dollar company doing gaming, that's not great for competition imo.

 

[BabyDontHurtMe]

Sony was a "non-endemic" before the PlayStation… 🙄

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Sony Imagesoft predated PlayStation and they published a few SNES games in the early 90s.

 

[Sadire]

Consumers as a whole don't give a shit about artists being paid well enough if it affects the price they have to pay.

If they did, existential-threat levels of music piracy would never have existed in the first place.

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Fair point, but I would argue that there's a more powerful entity that cried foul over piracy. The record label industry, who have done their fair share of nickel and diming artists with exploitative contracts and such.

I would like to believe most people who like a person's work would be okay with paying for it, perhaps if they get to sample it first (streaming provides that), but are much less sympathetic to a corporation crying foul.

Then again, defence force for everything..

 

[Bishop89]

I disagree. I think we could use a little more competition in the high end console market and the only companies with enough money to bankroll an entry into the gaming market are the giant ones like Apple, Amazon, Google, etc. Disruption can be good or bad, it really depends. I'd rather have Microsoft not be the only trillion dollar company doing gaming, that's not great for competition imo.

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More platform holders in the industry means more work for developers.

 

[Tendo]

Not directly related but consolidation and the wrong people running businesses make me think of this conversation with Steve Jobs. I think anyone with shitty management / middle management can relate.


View: https://youtu.be/NlBjNmXvqIM?si=zJa8V_xDGPYunK6z

I think cassette and CD filled different desires for consumers - more so than VHS and DVD did at least.

I would still buy cassettes even when I had a CD player at home because I would listen to them on my Walkman. It took me a while to get a portable CD player and, even when I did, the Walkman was still amazing because it was so much smaller and could also play your cassettes that you'd taped from the radio/mixes etc.

Definitely had a lot of records that I bought on cassette and then we ultimately got a home copy on CD too.

VHS and DVD were largely just different time periods (with a little crossover).

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Did this a ton. would buy the cd, then record it to cassette to not only make my own mixes but my walkman was a tank, didn't skip, and was way better on batteries. I didn't get a portable cd player until like... 2002? plus blank cassettes were cheaper than cd-r's were.

 

[Dust]

They both have "fuck you" tier money. I will never underestimate that.

 

[Gavalanche]

I disagree. I think we could use a little more competition in the high end console market and the only companies with enough money to bankroll an entry into the gaming market are the giant ones like Apple, Amazon, Google, etc. Disruption can be good or bad, it really depends. I'd rather have Microsoft not be the only trillion dollar company doing gaming, that's not great for competition imo.

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Problem is Apple doesn't do half measures. If they decide to enter gaming in a big way, they will enter it in a way that we wouldn't believe. They will blast down the door and stroll in guns blazing. I am not against apple as a company - I have an iphone and iphad and applewatch and all sorts of crap - but I do not want them to enter the console gaming space because of what they can achieve.

Maybe it makes me anti-competitive or whatever, but I think gaming has never been as good as it is now, and all four major platforms (three consoles plus Steam) are all extremely healthy. Games are coming out constantly, most of them are of good quality, its great.

 

[fiendcode]

I don't think they are the same thing because when Sony and Microsoft entered the gaming arena they essentially were copying the business model of the established players. Sell consoles, collect licensing fees.

If you do want to pull a lesson from that. Microsoft's big innovation was bringing paid online. Nintendo and Sony were kind of iffy about online, it didn't really seem to have value. Microsoft had a different philosophy and decided that they could charge for online and it would be a large part of the future of gaming.

Sony eventually brought out their online services and to start with it was free but the chance to make the same cash microsoft was making was too tempting and suddenly gaming was $50 more expensive per year. Even nintendo charges for a lot of online stuff.

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Dring sort of pointed this out in the talk but it's not that different, both were non-endemic and much larger companies entering the console market and Layden even talked about Sony changing business models with that (basically taking consoles from 1st party to 3rd party driven) and fundamentally disrupting the market.

People think about Nintendo still being a 1st party driven console maker as odd or unique but the truth is they all were basically like this (Atari, Sega, Coleco, NEC/Hudson, SNK, etc) before Sony. The only real exception was 3DO and that was initially a consortium trying to establish a universal standard from multiple stakeholders.

 

[RedHeat]

Problem is Apple doesn't do half measures. If they decide to enter gaming in a big way, they will enter it in a way that we wouldn't believe. They will blast down the door and stroll in guns blazing. I am not against apple as a company - I have an iphone and iphad and applewatch and all sorts of crap - but I do not want them to enter the console gaming space because of what they can achieve.

Maybe it makes me anti-competitive or whatever, but I think gaming has never been as good as it is now, and all four major platforms (three consoles plus Steam) are all extremely healthy. Games are coming out constantly, most of them are of good quality, its great.

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I would love to see that happen regardless IMO. As it stands Apple sees gaming as just a "feature" of their hardware with the way they maybe get a couple AAA games a year on the Mac.

 

[PachaelD]

No? Piracy was killing music industry revenue. The iTunes store stemmed that bleeding a little bit, but it's absolutely ahistorical to say that 99¢ singles is the reason that creators are rewarded less than before.

Click to shrink...

These days it's gotten back to near vinyl's heights thanks to paid subscriptions from streaming so it's peaks and troughs so far (to 2022, inflation adjusted)

U.S. Music Revenue Database - RIAA

The RIAA provides the most comprehensive data on U.S. recorded music revenues and shipments dating all the way back to... Read More »

www.riaa.com

That said, streaming use and revenue to creators is a whole different kettle of fish. There's also a discussion on whether the revenues have peaked, and/or as there are more creators to share the money with arguably everyone's getting a smaller piece of the pie but I digress

Anyway, back to gaming, there's this thread (back to 2020, inflation adjusted) which reflects the rise of mobile and GAAS in the last decade, (starting from Angry Birds and LoL).

50 Years of Gaming History, by Revenue Stream (1970-2020) Sales

https://www.visualcapitalist.com/50-years-gaming-history-revenue-stream/ Of note: Arcade has completely diminished in the span of 50 years. Nintendo Switch console is categorized in the Console category. This is debatable due to the nature of the handheld/portable gaming platform. Handheld...

www.resetera.com

 

[ghostcrew]

Problem is Apple doesn't do half measures. If they decide to enter gaming in a big way, they will enter it in a way that we wouldn't believe. They will blast down the door and stroll in guns blazing.

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Eh, Apple have tried to enter a lot of markets half-heartedly (including gaming, already). Apple TV+ has finally started to fill out it's library with some quality shows, but you'd be hard pressed to suggest that they entered the entertainment/TV show market with guns blazing. They entered with a very meh service and have basically spent the last four years giving away three month subs with every Apple product to get even Apple fans to stick with it. It has felt very soft in terms of a launch going up against the competition.

See also Apple Music, which is a fine product in 2023 but still hasn't caught up to Spotify in terms of features, usability or market share. Spotify is still the music service and it doesn't really feel like Apple care. They didn't blast down the doors, they just emulated what another company was doing and made their own that they can sell subs for.

See also Apple Books (in comparison to Kindle) and their various attempts and failures at making Mac a place for gaming.

I definitely reckon if they gave (non mobile) gaming another shot they'd do a half measure. I'm a big Apple user (and an Apple One subscriber) but I admit that they half arse a lot.

 

[fiendcode]

Sony Imagesoft predated PlayStation and they published a few SNES games in the early 90s.

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Sony Music/CBS/Epic was doing NES games in the late 1980s too. Sonic Electronics was also involved with producing MSX hardware from the outset.

Microsoft was involved in PC gaming from the early 1980s though (MS Flight Sim first released in 1981!). But, to this point, companies like Apple or Amazon have been involved in gaming for over a decade now too and I don't really think this is the thrust of what Layden was getting at.

 

[Hazz3r]

As someone who worked in a reasonably high level in the music industry for a decade and a half over that whole period - the line about the music industry and Apple is bizarre and I disagree.

"Music, he said by way of example, was irreversibly disrupted when Apple "convinced everyone that 99 cents per song was a good idea.""

Music was irreversibly disrupted by rampant and easy piracy, absolutely tanking the value of recorded music. The industry had to play catchup and Apple popularising 99 cents a song and Spotify popularising streaming for a sub are two of the only things that actually bought income back via recorded music.

Apple "convincing everyone that 99 cents per song was a good idea" was a much better solution than everyone being convinced that those songs were worth zero cents, which is where we were in the Limewire/Oink days.

Apple were absolutely disruptive to the music industry, he's right. But disruption isn't always negative. The arts have always seen disruption bringing in change and sometimes it's a postiive.

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It's so true. Apple had to counter convenience with even more convenience. My favourite thing about it was that they could have easily locked down the platform. Ensured that the only songs people were listening to on iPods was music bought off iTunes.

But they didn't, and I really do wonder what percentage of songs on iPods globally in the mid-2000s were actually legitimately acquired, because I bet it's not many.

 

[GreenMamba]

"Sony was non-endemic but they did it the right way" isn't really a viewpoint I can get behind. All three major console manufacturers were "non-endemic" at some point to the industry.

 

[LinkStrikesBack]

Interesting that at their peak, cassettes and CDs were still selling about equally. That's like if VHS and DVD harmoniously coexisted instead of one supplanting the other.

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They weren't. I don't think you're reading the graph right, the colours are showing the sum total when you get to the peak, cd was like 19.x billion and cassette was another 1.x bill, not 21.5 each

 

[BabyDontHurtMe]

Sony Music/CBS/Epic was doing NES games in the late 1980s too. Sonic Electronics was also involved with producing MSX hardware from the outset.

Microsoft was involved in PC gaming from the early 1980s though (MS Flight Sim first released in 1981!). But, to this point, companies like Apple or Amazon have been involved in gaming for over a decade now too and I don't really think this is the thrust of what Layden was getting at.

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Yeah personally I disagree with Layden's notion non-endemics that breaking into gaming could be bad since it ultimately depends on how they break into gaming. I think massive consolidation certainly can be detrimental to gaming, especially if it's done by a corporation that has no idea how to manage game studios which results in major hemorrhaging in talent. But Amazon and Apple haven't really made any big waves in that regard just yet. The Big Tech companies can still break into gaming without damaging the industry, and I argue they're much more strategic than he gives them credit for. I doubt any of them are going to manufacture their own gaming hardware or whatever and just serve as a digital platform for developers to release their games on.