“There comes a time when we all declare the war is over”: Former PlayStation Studios boss Shawn Layden on the future of video game consoles

Eurogamer’s week-long coverage of PlayStation’s 30th anniversary continues today with the concluding half of our special Shawn Layden interview, this time discussing the future of PlayStation and video game consoles as we know them today.

Where will PlayStation be in another 30 years? The end of consoles has long been prophesised, but at a time of spiralling AAA game budgets, £700 premium upgrades and an audience leaving for TikTok, the thought of us sitting here in 2054 celebrating PS9 seems increasingly unlikely.

So where does the console games industry go from here? How do you counter those enormous budgets? How can games change? And have we got to the point where, to a large extent, the hardware we play on doesn’t matter? Read on for more insight from Shawn Layden, former chairman of PlayStation Worldwide Studios, and a definitive response on whether he thinks PlayStation will ever launch games on Xbox.

How do you feel about the video game industry currently? You’ve mentioned not seeing innovative new games like PaRappa the Rapper anymore. Where are the new genres?

Layden: I guess you get new genre activity at the indies level, where there’s more risk tolerance. You have got to take the risk, otherwise you’re not gonna get anywhere. But I’m afraid that the current cost of game development, with AAA console titles costing in the hundreds of millions, squeezes risk tolerance out of the room.

‘Show me how the trend line is going to be exactly like Grand Theft Auto’

If you’re looking at something that’s going to clock in at $160m to produce, the immediate reaction of the finance guys is, ‘okay, what is that comparable to? How are you going to make me feel better? Can you show me how the trend line is going to be exactly like Grand Theft Auto, so then I can feel fine putting money behind it?’ It results in a lot of copycats, a lot of sequels. ‘Give me GTA 7, because I know how to plot that course.’

It’s squeezing, I think, creativity out at the high end and that’s a problem. On PS1 and PS2, one unit of hardware could sell 25 games. With PS3 and PS4, largely due to the network effect of people getting online, it’s much lower. Once you’re in your online world with your online friends, you don’t leave. I have a son and I don’t think FIFA ever leaves his machine. I think it’s permanently embedded inside his PS5. And if you go down the Fortnite rabbit hole or the Warzone rabbit hole, you don’t play a lot of other games. So I’m concerned about that lack of breadth.

There’s been discussion recently around how console generations aren’t growing over time, either. Is it enough to keep selling to the same sized audience?

Layden: So yes, if you stack it up and look at all the things that were around during the PS1 era, whether it’s Saturn and N64, or the PS2 and Xbox era, no generation seems to get over 250m units of hardware, aggregate. The one time it popped is when Wii Fit came out and a bunch of people thought they could lose weight by buying a Nintendo [Wii]. There’s that momentary Christmas, ‘oh, let’s lose weight’ thing which shot up the console number, but then it fell back down again.

We’re not growing the next generation. We’re losing the next generation to TikTok

Even when you hear that gaming revenue went up 23 percent during the pandemic, it wasn’t from new people, necessarily. It was more money from the same people, and this is the existential threat I talk about when I’m meeting with developers and publishers – that you’re just getting more money off the same people. It’s a business model I understand, and you understand, and that’s fine. But we’re not growing the next generation. We’re losing the next generation to TikTok. The competition for gaming isn’t Xbox and Nintendo. It’s everything else in the freaking zeitgeist that can take your time away from your gaming activity.

The pandemic gave us an unnatural pop for gaming, where we thought, ‘oh my god, gaming is the biggest thing in the world’. Yeah, when you’re locked down, it is the biggest thing in the world. But in a regular world scenario, you’ve got to combat against all the other distractions that are available to young people. And I’m afraid that we’re not facing that threat head on as an industry.

So then, how do we face that threat head on as an industry?

Layden: We need to address two or three things specifically. One thing is the exploding cost of game development. Every generation it costs twice as much to build a game. What costs $1m on PS1, then costs two, then four, then 16. It goes exponentially. The PS4 generation, which was the last I was associated with, game dev was 150m if you want to be top of the line, and that’s before marketing. So by that math, PS5 games should eventually reach $300m to $400m – and that is just outright not sustainable.

I’m afraid we’ve built AAA gaming into a kind of cathedral business, and it just can’t grow any further

It’s like we’re at the end of the 18th century, and we’re realising that building cathedrals is really expensive. Can we continue to build these massive edifices to God for this incredible amount of labour and time? Or should we just build four walls and a roof, and that’s a church, right? I’m afraid we’ve built AAA gaming into a kind of cathedral business, and it just can’t grow any further. In fact, it’s probably grown too far already.

How do we cap that? How do we bring that back? I think part of that answer is – and it sounds simplistic, but hear me out – I think games are too long. I haven’t even opened Red Dead Redemption 2, because I don’t have 90 hours. And I’m retired and I don’t have 90 hours. For the longest time, we kept banging on about ‘100 hours of gameplay’. ‘This is going to be awesome. It’s 100 hours of gameplay!’ Like that’s the most important thing to know. That was a metric in the early years, when the average gamer was 18 to 23. And when you’re 18 to 23, you’re time rich and money poor. But as the average age of the gamer moved into the late 20s, the early 30s – well, it’s the opposite, right? Maybe you aren’t money rich, but you’re definitely time poor. So I think our approach is a mismatch to that market, to reality.

I’ve made a bunch of games that were 80, 90 hours long so I’ll be the first to say those weren’t always 100 percent quality hours. There were a lot of moments in there where I really felt ‘am I running across this same field again?’ I would like to see a world where you can get back to 18 to 23 hours of gameplay, but with gameplay so compelling you don’t want to put the controller down. I want the entire game to be like that moment in Resident Evil where the freaking dogs come through the window and you drop your controller out of fear. I want more of those kinds of game moments, if we can bring down the scale and scope.

It feels like each generation is getting lumbered with ever higher production costs, production values, and we’re seeing a smaller selection of games as a result – at least on consoles.

Layden: Yeah, rendering at 480p was not very expensive, but doing 4K at 60fps, that’s a lot of people, a lot of time. Let’s look at our obsession with photorealism, chasing that uncanny valley. From what I’ve seen, it’s non-traversable. Don’t chase that. I think a photorealistic Mario would be kind of off-putting, frankly. Or when they did that first Sonic draft for the Sonic movie with teeth.

What would Coppola do if you walked out halfway through his movie? Is this a good use of resources?

On PS1, our expectation walking down the street in a game was that you couldn’t open every door. Now the expectation is you can go in every house, open every drawer and everything is destructible. And that’s nice, but it’s expensive to make that happen. We have to look at that. If only 50 percent of players see the end of your game, what about all those millions you spend on the final level, for only half the people to see it. There’s so much money being put into making huge game experiences and people aren’t seeing it. What would Coppola do if you walked out halfway through his movie? We have to understand – is this a good use of resources? I want a movement that gets more people to finish games, where we make it so compelling they just want to see it, and where it’s not so onerous they don’t have to spend three months doing it.

Can consoles continue to exist, long-term? Xbox is already publishing to multiple platforms, and now rival consoles. Will PlayStation survive another 30 years just publishing on its own consoles and PC? Will Nintendo?

Layden: Let’s put Nintendo aside for a second, because they live in their Own Private Idaho, where the laws of physics apply in different sorts of ways. But with Xbox versus PlayStation, the Ali versus Frazier fight… Frankly, we have to start interrogating what the purpose is of a proprietary console, and whether that can continue to be true.

We’re getting to the realm, frankly, where only dogs can hear the difference

If you look at it from my lens, which is of course the PlayStation lens, the leap from PS1 to PS2 was dramatic. I remember seeing the PS2 demo for Gran Turismo and not believing this could happen in a home console, but it did. The jump from PS2 to PS3 was also remarkable. We got to an HD standard. We got – not all, but a lot of – 60fps gameplay. It had a network capability, nascent though it was. Then PS3 to PS4 was just, like, getting the network thing done right. Then to PS5, which is a fantastic piece of kit, but the actual difference in performance… we’re getting to the realm, frankly, where only dogs can hear the difference now. You’re not going to see another PS1 to PS2 jump in performance – we have sort of maxed out there. If we’re talking about teraflops and ray-tracing, we’re already off the sheet that most people begin to understand.

Consoles are never getting a big leap in power again?

Layden: I don’t think so. I mean, what would that leap look like? It would be perfectly-realised human actors in a game that you completely control. That could happen one day. I don’t think it’s going to happen in my lifetime. We’re at a point now where the innovation curve on the hardware is starting to plateau, or top out. At the same time, the commoditisation of the silicon means that when you open up an Xbox or Playstation, it’s really pretty much the same chipset. It’s all built by AMD. Each company has their own OS and proprietary secret sauce, but in essence [it’s the same]. I think we’re pretty much close to final spec for what a console could be.

It almost sounds like you’re calling a truce to the console wars.

Layden: Well… You’re not as old as I am, obviously, but you’ve read stories about something called VHS versus Betamax, right?

My dad had a Betamax at home when I was growing up, and as I’m saying this I realise this is going to make you feel old. [For our younger readers, Betamax was Sony’s less successful answer to VHS.]

Layden: [Laughs] Thanks to your dad. So, one of the first jobs I had when I joined Sony in 1987 was in the PR department in Tokyo, and one of the first things I had to write was a corporate statement about why Sony was going to start building VHS recorders and how we weren’t abandoning Betamax. We were just ‘expanding our offerings to our consumers to fit their lifestyle needs’. But that’s what happened. And my whole life has now gone full circle, because when you have competing formats, competing platforms, competing technologies, there comes a time when we all declare the war is over.

Content should be the competition for publishers, not which hardware you get behind

This is why, after the VHS vs Betamax fight, you saw industry consortiums come together for things like compact discs and then DVDs. ‘This is the technology we’re going to land on. These are the specs around that tech that we’re going to agree to.’ You might compete on price points and its aesthetics – do you want it in wood or black or orange? – but the real competition will be on its content. And content should be the competition for publishers, not which hardware you get behind. I think we’re at a point where the console becomes irrelevant in the next… if not the next generation then the next next generation definitely.

Consoles are now getting mid-gen upgrades, which I feel further erodes those big generational steps. You’ve said in the past that chasing teraflops has diminishing returns, but are they something of a niche worth investing in?

Layden: The first time Sony really did a mid-range upgrade was PlayStation 4 Pro – because up until then new versions of its consoles usually were where we brought the cost down. We used fewer parts, you got a better, more compact footprint. It was smaller and cheaper. PS4 Pro was the first time we said ‘OK, instead of continuing to reduce the size and the cost of the standard model, we have some tech here. We have some abilities to take the current PS4 game library and juice it up’. I think it worked really well on PS4. I think there was also some market pricing that made it an easier transition from your standard PS4 to get a Pro three years later. But again, now we’re all chasing that diminishing returns point where I’m unsure if people can really tell the difference.

It’s a connoisseur market, shall we say

If you’re playing your game with your curtains open and the sunlight is hitting against your OLED, you’re not seeing any ray-tracing in real-world scenarios. It’s really hard to get the full impact of some of these innovations without having the perfect viewing experience. We’re going into the mid-gen now with PS5 Pro at a robust price point, so to speak, and it remains to be seen who the market is for that. I think it’s a connoisseur market, shall we say.

Speaking of competing for content, PlayStation and Kadokawa Corporation look ready to tie the knot, meaning Sony likely owns FromSoftware and could decide exclusivity for the next Elden Ring. What are your thoughts there?

Layden: The two companies have always been close. The FromSoftware association goes back to the early days of PlayStation, they were one of the launch partners, coming out with games back then. And then if you look at the board of directors, historically there’s been a number of Sony people who’ve served on boards at Kadokawa, that type of thing. They’re not strangers, that’s for sure. I don’t know what the timeline is on Elden Ring 2, I’m sure it’s a bit down the pike.

If console hardware becomes somewhat irrelevant, does competing on content see Sony putting PlayStation games on Xbox, as Microsoft has done on PlayStation?

Layden: I don’t know what the business imperative would be to do that.

Playstation has been the leader for almost every generation it’s been in. You talk about Xbox 360 being a huge competitor with PS3 and, for a while… they got out the gate sooner, they grew a large market. But in the end PlayStation fought to a tie in America and the UK. With Xbox 360 we look at a global footprint and PlayStation is far and away the global leader, because it is the leading platform in 170 countries around the world. Microsoft never had that kind of global reach, so they could never build a global market to the scale that PlayStation does.

You know the Sony fanbase gets really upset whenever a game comes out on PC

So the question you’re asking is: should PlayStation, with that huge market lead and the momentum, apparently, going forward, should they build versions of their games to run on a competing platform of much smaller size and scale? As the saying goes, I don’t know if the juice is worth the squeeze. How many additional sales would they get versus the brand impact, all the aggro? You know the Sony fanbase gets really upset whenever a game comes out on PC, 18 months after the original release on PlayStation. I never understood that aggro but, you know, it’s there. And if that’s what they’re going to say about a PC release, just imagine what the market would say about Xbox releases from PlayStation Studios.

How about PlayStation games on Nintendo, then? We’ve just seen Lego Horizon Adventures arrive there, which was a first.

Layden: Historically, PlayStation and Nintendo platforms have lived happily side by side in living rooms across the world. It’s almost like a natural pairing.

It sounds like Sony might have finally forgiven Nintendo for leaving them at the altar.

Layden: You know, success is the best revenge.

Be sure to read the first half of Eurogamer’s PlayStation 30th anniversary interview with Shawn Layden to hear the former Worldwide Studios chairman reveal his thoughts on the origins of Sony’s console ambitions, PS3’s “Icarus moment” and how the brand got back on top.