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[Thick Thighs Save Lives]

But former PlayStation boss is hopeful games businesses can disrupt itself before the likes of Google and Amazon

Non-endemic companies such as Google and Amazon are among the biggest threats to the games industry.

That's according to former PlayStation boss Shawn Layden, who shared his thoughts on the future of games during the keynote at last week's GamesIndustry.biz Investment Summit in Seattle.

Speaking on stage with GamesIndustry.biz head Christopher Dring, Layden listed his three biggest concerns among the many challenges the industry faces in the coming years.

"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.

"[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."

He added that non-endemics trying to enter the games industry is nothing new. Around 25 years ago, we saw film studios such as MGM, Fox and Sony Pictures starting up their own games businesses.

"They all thought, 'we have IP, there's money in the games space, so let's make games. How hard can it be?' and then they all crashed and burned. And 20 years later you have all these big tech firms, they've got this cloud infrastructure, and they're like 'let's make games. How hard can it be?' and it turns out it's pretty hard."

Shawn Layden issues warning about non-endemics breaking into games

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[Mibu no ookami]

I think an element of consolidation is the only way to keep the Apples, Amazons, and Googles at bay.

Gaming is becoming big business and other than Microsoft and Tencent, most gaming companies are still relatively mid-sized companies.

 

[ClanOfNone]

I think an element of consolidation is the only way to keep the Apples, Amazons, and Googles at bay.

Gaming is becoming big business and other than Microsoft and Tencent, most gaming companies are still relatively mid-sized companies.

Becoming a big business? Gaming has been a HUGE business for years now. I think in the early 2010's it surpassed Hollywood revenue and just kept on trucking.

 

[Deft Beck]

The real threat to the games industry is people who don't know what makes a good game entering into the industry and trying to shove a movie into a game shaped box.

Yes, that appeals to investors who may not understand or play video games, but the proliferation of movie games is not good for the health of the industry.

 

[Mibu no ookami]

Becoming a big business? Gaming has been a HUGE business for years now. I think in the early 2010's it surpassed Hollywood revenue and just kept on trucking.

Big business is a relative term. Maybe you're referring to box office revenue solely, but that isn't the extent of Movies/TV.

 

[Dream-Knife]

Tl;dr we want to prevent new competition.

Apple, google, and amazon would be horrible for the industry, but let's not pretend sony and microsoft are doing a good job for it either.

 

[MarkMe2525]

Such a departure from how most view competition in a particular industry. Typically, when more companies are throwing their hat into the field, we consumers win due to the increased competition.

Also, 99 cents a song was a great idea for consumers. I could not care less if some studio exec has to downsize their yacht. Artist never made their money off of record sales, they made the bulk of their money from touring. 99 cent songs don't change that.

 

[Mibu no ookami]

Tl;dr we want to prevent new competition.

Apple, google, and amazon would be horrible for the industry, but let's not pretend sony and microsoft are doing a good job for it either.

As anticonsumer as Nintendo was in the 80s and 90s, I do feel like we were better off with true gaming companies running the industry i.e. Nintendo and Sega.

I think console gaming has become too similar to PC gaming in the worst ways.

 

[Unknown?]

I think an element of consolidation is the only way to keep the Apples, Amazons, and Googles at bay.

Gaming is becoming big business and other than Microsoft and Tencent, most gaming companies are still relatively mid-sized companies.

Microsoft is the same as Apple, Amazon, and Google. They aren't any better and don't add anything other than consolidation with their current management.

Their offering wasn't good enough for consumers to keep it going, only the fact that they are part of big tech was what kept them going. If they were Sega, they would have been bankrupt after each of their offerings.

 

[Alpha Male]

Phil Spencer flat out said not long ago - I don't have a link but I remember it well - that all gamers better hope that Valve, Nintendo, Sony and Microsoft are the ones holding the most power in the end.

 

[Mibu no ookami]

Microsoft is the same as Apple, Amazon, and Google. They aren't any better and don't add anything other than consolidation with their current management.

Their offering wasn't good enough for consumers to keep it going, only the fact that they are part of big tech was what kept them going. If they were Sega, they would have been bankrupt after each of their offerings.

Microsoft offers a counterpoint to keep Sony somewhat in check.

I don't necessarily want a second Microsoft.

 

[Crispy Gamer]

He also warns about Consolation and how subscriptions devalue games

 

[Unknown?]

Microsoft offers a counterpoint to keep Sony somewhat in check.

I don't necessarily want a second Microsoft.

Nah I don't think so. They are terrible competition and PlayStation needs better to keep them striving to make the best products.

 

[Mibu no ookami]

Nah I don't think so. They are terrible competition and PlayStation needs better to keep them striving to make the best products.

There's not going to be a company out there in gaming as it exists today that can counterbalance Sony who isn't Microsoft. That boat has sailed.

Right now, we're looking at a Tencent console coming out in the next 5-10 years.

 

[Crispy Gamer]

Microsoft offers a counterpoint to keep Sony somewhat in check.

I don't necessarily want a second Microsoft.

Nah Microsoft doesn't want a player in the space as highly capitalized as them so they can move their weight around I'd rather it be open for whoever want to come in and let the consumer decide instead of them buying everything 3rd party publisher just to move one step closer to reducing choice. I don't believe for a second that apple or google would've made industry changing moves like that and Google's failure is proof of that, they could've easily went down that route if their intentions was to take competition out but nope they was trying to offer up a new way to play games in which I welcome.

 

[Panajev2001a]

Phil Spencer flat out said not long ago - I don't have a link but I remember it well - that all gamers better hope that Valve, Nintendo, Sony and Microsoft are the ones holding the most power in the end.

“What a nice gaming business you have there gamers, it would be such a shame something were to happen to it…”.

 

[ReBurn]

Nah Microsoft doesn't want a player in the space as highly capitalized as them so they can move their weight around I'd rather it be open for whoever want to come in and let the consumer decide instead of them buying everything 3rd party publisher just to move one step closer to reducing choice. I don't believe for a second that apple or google would've made industry changing moves like that and Google's failure is proof of that, they could've easily went down that route if their intentions was to take competition out but nope they was trying to offer up a new way to play games in which I welcome.

Microsoft isn't the biggest barrier to new entrants in the console space. Their capitalization hasn't done them much good considering their current market position. Sony and Nintendo own the console space and the loyalty they've built with fans over the years is the biggest hurdle a new entrant would face.

Google's failure was precisely because they tried to pull off an industry-changing move by selling you games for full price and only allowing you to play them via their streaming platform. Nobody wanted that particular change and Google's venture failed. Had nothing to do with Microsoft money.

 

[Sanepar]

Phil Spencer flat out said not long ago - I don't have a link but I remember it well - that all gamers better hope that Valve, Nintendo, Sony and Microsoft are the ones holding the most power in the end.

I could agree if Microsoft were different than Apple, Google or Amazon and the company that are trying to disrupt the industry model is Microsoft with rent and cloud.

 

[Three]

The real threat to the games industry is people who don't know what makes a good game entering into the industry and trying to shove a movie into a game shaped box.

Yes, that appeals to investors who may not understand or play video games, but the proliferation of movie games is not good for the health of the industry.

It's charming that you think this is what the threat is or appeals to investors. The thing that's endemic are mtx and a game you can milk for literal decades. Not your damn "movie game".

 

[Three]

A thought question. What could the likes of Amazon and Google do that isn't already prevalent from other companies?

 

[RoboFu]

I mean we can all watch 2 commercials before each level right?

 

[DrFigs]

I would think Apple Arcade and games on the app store makes more money than Xbox or Playstation. Maybe this is wrong.

 

[Crispy Gamer]

Microsoft isn't the biggest barrier to new entrants in the console space. Their capitalization hasn't done them much good considering their current market position. Sony and Nintendo own the console space and the loyalty they've built with fans over the years is the biggest hurdle a new entrant would face.

Google's failure was precisely because they tried to pull off an industry-changing move by selling you games for full price and only allowing you to play them via their streaming platform. Nobody wanted that particular change and Google's venture failed. Had nothing to do with Microsoft money.

The quality of Google's streaming service was absolutely a new way to play it was just accompanied with bad business decisions I didn't say they failed because of Microsoft my point is there shouldn't be any gate keeping if a company wants to come into the console/gaming space then let them.

 

[Punished Miku]

Sony was the first "non-endemic." Weird take.

 

[DrFigs]

It's not ideal for an industry to be dominated by just 3 companies. Very odd comment from Layden. We wouldn't want this for literally any other industry. And as far as being concerned about big tech companies entering the market - the biggest threat to everyone is already in the market and disrupting it in really awful ways.

 

[CoreyFlawless]

There's not going to be a company out there in gaming as it exists today that can counterbalance Sony who isn't Microsoft. That boat has sailed.

Right now, we're looking at a Tencent console coming out in the next 5-10 years.

Fucking this. Ppl don’t understand what all the companies would have to make their game’s exclusive for this system. It legit be 4 consoles. Someone could legit get lost if that happens.

 

[Three]

I would think Apple Arcade and games on the app store makes more money than Xbox or Playstation. Maybe this is wrong.

Activison financials showed they make more money from/for Apple and Google. The question is what endemic harm could Apple or Google do? Introduce a sub like Apple Arcade? Already done by MS. Introduce mtx in games or f2p games? Already done by MS and countless others. What could they possibly do?

 

[Crispy Gamer]

Sony was the first endemic. Weird take.

His point was non-endemic

 

[SportsFan581]

The quality of Google's streaming service was absolutely a new way to play it was just accompanied with bad business decisions I didn't say they failed because of Microsoft my point is there shouldn't be any gate keeping if a company wants to come into the console/gaming space then let them.

How can there even be a gate to keep here? It's not really an industry with those kind of startup limitations (think mobile networks and the need for bandwidth, IPs, land access, etc). Anyone with the $ can build a box and put it on the shelf and there isn't much MS, Sony, or Nintendo could do about it. It's a business with a high failure rate, sure. But, I'm not seeing who is really in a position to gate keep.

 

[delfrickintree]

.

 

[Punished Miku]

His point was non-endemic

I corrected it. Never heard this term. But Sony was the first non-gaming company to move in.

 

[cireza]

I like how he warns about non-endemic companies and then moves on and explain how this was exactly what Sony were back then, but that it was okay this time though.

 

[DrFigs]

There's not going to be a company out there in gaming as it exists today that can counterbalance Sony who isn't Microsoft. That boat has sailed.

Right now, we're looking at a Tencent console coming out in the next 5-10 years.

MS spent 80 billion dollars in the last 4-5 years to be competitive against Sony. A lot of companies are just not willing to spend that much to even enter the market, even if they have the capital for it. It just looks like Amazon, Netflix and Google think they can spend a few hundred million here and there on a streaming service or whatever and that's their entry into the market - and it's totally the wrong approach. It's no wonder they're going to fail.

 

[angrod14]

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

Why isn't a good idea? It's a great idea. Most of albums are pure filler with three or four good songs on it. Isn't it fair that I as a consumer should be able to pick exactly what I want to purchase and leave the rest? Why would I pay an artist for songs I don't like? You want to sell full albums? Stop making redundant songs.

Can you imagine if we still had to use CD's to go around? In our cars, when we travel, when we exercise? Apple changed everything, and for the GOOD.


"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."

Quality films are still very succesful in the cinema, generally. People just don't want to go out to watch bad films anymore, with everything they have available at home. The problem isn't Netflix, the problem is the creativity crisis Hollywood is going through. Very few movies are worth going to a cinema for these days.

 

[Crispy Gamer]

How can there even be a gate to keep here? It's not really an industry with those kind of startup limitations (think mobile networks and the need for bandwidth, IPs, land access, etc). Anyone with the $ can build a box and put it on the shelf and there isn't much MS, Sony, or Nintendo could do about it. It's a business with a high failure rate, sure. But, I'm not seeing who is really in a position to gate keep.

It was a respone to a few quotes from Mibu no ookami i just didn't multi quote him, he said "I think an element of consolidation is the only way to keep the Apples, Amazons, and Googles at bay" ....this is in fact a form of gate keeping is it not? If it isn't then I'll stand corrected

 

[StueyDuck]

I agree with almost everything he has said. I disagree that Apple and Google and amazon are just on the verge of taking over.

They've all been wet farts so far in the industry and gaming has been printing money and massive for many many years, gta 5 smashed records and still sells and that's 2013. 10 years later and they barely made any moves

 

[DrFigs]

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

Why isn't a good idea? It's a great idea. Most of albums are pure filler with three or four good songs on it. Isn't it fair that I as a consumer should be able to pick exactly what I want to purchase and leave the rest? Why would I pay an artist for songs I don't like? You want to sell full albums? Stop making redundant songs.

Can you imagine if we still had to use CD's to go around? In our cars, when we travel, when we exercise? Apple changed everything, and for the GOOD.


"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."

Quality films are still very succesful in the cinema, generally. People just don't want to go out to watch bad films anymore, with everything they have available at home. The problem isn't Netflix, the problem is the creativity crisis Hollywood is going through. Very few movies are worth going to a cinema for these days.

Well now nobody buys music anymore and artists and labels are making a fraction of what they used to make when people bought CD's. The same is true for tv shows/movies on streaming services. And probably will be true for games.

 

[angrod14]

Well now nobody buys music anymore and artists and labels are making a fraction of what they used to make when people bought CD's. The same is true for tv shows/movies on streaming services. And probably will be true for games.

The true money was never in the album sales, but in the concerts and everything else. Nobody ever bought music, people just resorted to piracy.

The thing with games (that doesn't apply to movies or music) is that they take too much time to complete. I can't justify a gaming streaming service when I barely have time to play one game at a time.

 

[drotahorror]

The real threat to the games industry is people who don't know what makes a good game entering into the industry and trying to shove a movie into a game shaped box.

Examples?

 

[SportsFan581]

It was a respone to a few quotes from Mibu no ookami i just didn't multi quote him, he said "I think an element of consolidation is the only way to keep the Apples, Amazons, and Googles at bay" ....this is in fact a form of gate keeping is it not? If it isn't then I'll stand corrected

I guess, the theory there would be that the Apples and Amazons and Googles wouldn't have content to put on the box? It doesn't seem real strong to me though, just because maybe these new players would go the Nintendo route more than the MS/Sony route and in-house software would be the focus.

 

[midnightAI]

I corrected it. Never heard this term. But Sony was the first non-gaming company to move in.

Nintendo was formed in 1889, a toy company

 

[ByWatterson]

He works for Tencent.

 

[Mibu no ookami]

Activison financials showed they make more money from/for Apple and Google. The question is what endemic harm could Apple or Google do? Introduce a sub like Apple Arcade? Already done by MS. Introduce mtx in games or f2p games? Already done by MS and countless others. What could they possibly do?

They can change the model largely away from AAA gaming to more of a subscription model as Microsoft is attempting to do.

We could see the quality among games dive significantly, even more than they already have.

 

[DrFigs]

The true money was never in the album sales, but in the concerts and everything else. Nobody ever bought music, people just resorted to piracy.

The thing with games (that doesn't apply to movies or music) is that they take too much time to complete. I can't justify a gaming streaming service when I barely have time to play one game at a time.

I was thinking that, yeah it's probably true that most of the revenue came from concerts, and that there really was a huge piracy problem in the early 2000's that was basically resolved by digital music sales and streaming services. Maybe this is wrong. But i thought record labels took a hit on the revenue and accepted streaming because piracy was so rampant. But for videogames, it seems like there's not really a concern about piracy on consoles. So it's just losing a ton of money (or leaving money on the table) and it's not clear what problem they're disrupting by going this route.

 

[Mibu no ookami]

It was a respone to a few quotes from Mibu no ookami i just didn't multi quote him, he said "I think an element of consolidation is the only way to keep the Apples, Amazons, and Googles at bay" ....this is in fact a form of gate keeping is it not? If it isn't then I'll stand corrected

Gatekeeping large buyers who are going to buy their way into the industry, i.e. the consolidation is going to happen regardless, but who is in control and what their vision and culture are is going to be very different.

 

[MarkMe2525]

Microsoft is the same as Apple, Amazon, and Google. They aren't any better and don't add anything other than consolidation with their current management.

Their offering wasn't good enough for consumers to keep it going, only the fact that they are part of big tech was what kept them going. If they were Sega, they would have been bankrupt after each of their offerings.

MS have been publishing games since the 1990's. There is absolutely a difference. This is just revisionist history.

Edit: publishing games since the 80's. The 90's was their first original game published.

 

[Mibu no ookami]

MS spent 80 billion dollars in the last 4-5 years to be competitive against Sony. A lot of companies are just not willing to spend that much to even enter the market, even if they have the capital for it. It just looks like Amazon, Netflix and Google think they can spend a few hundred million here and there on a streaming service or whatever and that's their entry into the market - and it's totally the wrong approach. It's no wonder they're going to fail.

These other companies are waiting for streaming to be feasible so they can get into the business.

They realize while mobile is big it is so hit or miss. And the barriers of entry for console are really high.

 

[Unknown?]

MS have been publishing games since the 1990's. There is absolutely a difference. This is just revisionist history.

Edit: publishing games since the 80's. The 90's was their first original game published.

That is irrelevant and I never said they didn't...? They are ALL big tech. Microsoft isn't any different from Google or Facebook or Amazon.

 

[Crispy Gamer]

Gatekeeping large buyers who are going to buy their way into the industry, i.e. the consolidation is going to happen regardless, but who is in control and what their vision and culture are is going to be very different.

You could be right and I appreciate your points of view it seems Shawn Layden is in around about saying the same thing I just disagree that these other companies are an imminent threat to consolidate the industry especially apple they care too much about profits and going all in on gaming usually means losing money somewhere in order to profit on software

 

[Dane]

Nah don't worry, they will not making a long lasting effort and will leave quickly.