“It’s very hard to launch a $120m game on a subscription service charging $9.99 a month. You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment. That’s why right now you need to take a loss-leading position to try to grow that base. But still, if you have only 250 million consoles out there, you’re not going to get to half a billion subscribers. So how do you circle that square? Nobody has figured that out yet.”
“Consolidation, from a bank ledger side of the calculation, makes sense,” Layden acknowledges. "Grab up all the resources so the other guy doesn’t get it and put them to task on the thing that you want to have done. But it takes the variety out of the marketplace. That’s my fear. And over time, that is going to make the industry moribund, and it’s going to create a world of sameness.
This is like an amateur giving a pro advice on how to run things lol. I’m sure MS knows better. Especially Phil Spencer. Dude has hit it out of the park on all of his decisions so far.
I think he is wrong on all accounts. The movie industry is proof of that, and MS’ gamepass as well.
MS has the most diverse of games out there. By a mile. All thanks to gamepass.
If anything…it is Sony that is taking the variety out of the marketplace with their ‘‘blockbuster’’ 3P over the shoulder games.
I’m sure he was just spitballing with some napkin math that got away from him, but… 500 million Game Pass subscriptions to recoup $120 million…? That’s orders of magnitude away from any kind of number that makes sense.
This is a very confusing interview with the ex-head of Playstation and raises a lot of questions. Why did he increase the budgets of these games so much if he is concerned about it? Why didn’t he greenlight a new Parapa? Why didn’t he put more diverse and smaller games on the main stage? Why is he so bad at math?
It’s very hard to launch a $120m game on a subscription service charging $9.99 a month. You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment.
Those figures only makes sense if all AAA industry is consolidated into MSFT (yet numbers are still way off… 500 million x 10USD is enough to fund more than 20 AAA 120m-games per month and still get plenty of benefit), and they decide to distribute only via game pass. Both assumptions are extremely bold and were not clearly stated. Complete non-sense and should be ignored.
I think the quality of the interview leaves some questions on the table. I blame the author of the article more than Shawn Layden. I am sure a lot of context is missing and that is the fault of the author!
His math isn’t as broken as everyone thinks. Say you have 500 games on the service (GP should hit that mark by end of this year). $5bil/month works out to $10mil per game per month, or $120mil per game for the year. That is most likely where he gets his figures from and why he chose the $120mil figure as an example.
That said, he is still making really strange assumptions. He assumes the existing console base is the max addressable userbase, which be true for Sony but not MS. He assumes that all games need to be that high budget for a AAA-like player experience, but that isn’t necessarily the case as demonstrated by FlightSim which is almost certainly the most technologically impressive game ever made yet was built by a small team in a very reasonable timeframe. That kinda thing requires access to top class cloud compute and ML expertise though, which Sony lacks. He assumes the game loses 100% of any possible retail sales, which we know is the polar opposite of what happens (with Game Pass at least). He assumes the games aren’t making any revenues from DLC/MTX’s or any kind.
It is important to understand that this interview is from the pov of Sony’s executives thinking about subscription models during the PS4 gen, so his thinking would be soloed and contextualized by Sony’s strengths/weaknesses. You can certainly detect some animosity b/t him and his ex-employers on the topic of consolidation too. His comments make complete sense when applied to Sony’s catalogue but not at all to MS, for instance.
if he said it 2 years ago it was true but now we see exactly opposite what he said , xbox studios have freedom to make whatever they want with risk at any schedule they want , with any budget , and we see they grow their studio none of them shrinking, 2 years ago we heard that nobody will develop open world they are expensive , now we see it survived and it will thanks to GamePass nobody say that again , but we cant say same thing about sony order in schedule is clear clue they dont have freedom in time , im sure they dont have freedom in budget and content either they are only busy to remake their old games with no risk