Former PlayStation Boss Responds To Mass Layoffs In Gaming, Says Things Will Be "Fine"

Former PlayStation boss Shawn Layden is speaking up to say the demise of the video game industry is greatly exaggerated. Speaking to VentureBeat, Layden said people have been saying for decades that the games business is headed for a downfall, and it hasn't happened, and it won't anytime soon. He said the thousands of layoffs in the video game industry in recent times are more of a "mismatch of talent-to-requirements" than they speak to the death of gaming.

"The demise of the industry has been predicted so many times in the last 20 years that it’s almost a joke. We're fine," he said.

On the subject of layoffs and the human impact of the past few years in video games, Layden said layoffs are a "lagging indicator" of the industry's health. That's because layoffs are implemented to attempt to fix an issue that happened a year ago, he said.

"You had this plan and it didn't work out. You feel you have people now who aren't in line with the new course correction. Layoffs don't address today's problem," he said. "They address decisions made in the past that may not have been the right decision. Let's understand it's not taking the temperature of today."

Layden said he expects layoffs in the video game industry to continue, despite the fact that the companies cutting staff are doing just fine financially.

"What's remarkable, when you look at the bottom line of these companies, some of them are hitting record revenues, record profitability, and laying off 8% of their workforce. Other than a mad chase for profitability, I don't understand it," he said.

It's not all sunshine and rainbows, though. Layden said the rising cost of game development is an "existential threat" to gaming. When games cost as much as $300 million to make, that could lead to some issues in the long term, he said.

"I'm afraid that we've bought into the AAA, 80 hours of gameplay, 50 gigabytes of game, and if we can't reach that then we can't do anything. I'm hoping for a return of AA gaming. I'm all for that," he said.

As an example, Layden said gaming is now reaching its "cathedral moment." He said hundreds of years ago, humans built cathedrals, or "massive edifices to God," across Europe and the world. However, the cathedrals were made using indentured labor, and that didn't last forever. In a similar way, the AAA games business might not be sustainable over the long term.

"It became prohibitively time-consuming and expensive. They were wonderful and beautiful. You can look at any of them across Europe and think, 'That's a marvel.' But we don't make them anymore. We don't make them because the math doesn't work. If you have four walls and a roof, you can call it a church, and God will come visit. You don't need the cathedral anymore," he said.

Instead, Layden said he's hopeful the gaming industry can return to AA games that cost many millions less. "Now, when every bet is triple-digit millions, risk tolerance is super low. You end up with copycats and sequels and not much more," he said.

To help get games made efficiently, as Layden sees it, he proposed the idea of game development adopting a model similar to how movies are made. Movies are made with contract workers who contribute to one project and then move on to the next when it's ready.

"All these people come together. You make the movie. Then everyone disperses. I think that's the only way to work in the future. The idea of having 300 people sat in a massive warehouse waiting for the workflow to come by them is just not going to be efficient anymore," he said.

Movie studios formerly employed screenwriters, actors, musicians, electricians, carpenters, and others on salary--but that model is now a thing of the past, Layden pointed out. A major distinction between moviemaking and game development today is that people who work on movies are largely unionized, whereas unions in the video game industry remain few and far between.

Layden's full chat touches on numerous other subjects regarding the latest developments in the video game industry. Among other things, he speaks enthusiastically about the future for the blockchain in gaming. Layden left PlayStation in 2019. He is now a strategic advisor to Tencent Games.