Former PlayStation Boss Says AAA Game Development Is Unsustainable

With AAA games costing as much as $150 million to develop, Shawn Layden says the model is "just not sustainable."

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Shawn Layden, the former boss of PlayStation, has weighed in with his thoughts on the state of the AAA games business, and he thinks it's unsustainable. Speaking at the Gamelab Live conference, as reported by GI.biz, Layden said the commonly held idea that the cost of game development will double every new generation cannot continue.

"The problem with that model is it's just not sustainable," he said.

Layden recalled the days when the world's biggest video games were developed on budgets of around $1 million. Now, the cost of most AAA games is between $80 million and $150 million, he said, and that's before marketing expenses are factored in.

The video game business cannot grow under this model, Layden said.

"I don't think that, in the next generation, you can take those numbers and multiply them by two and think that you can grow," he said. "I think the industry as a whole needs to sit back and go, 'Alright, what are we building? What's the audience expectation? What is the best way to get our story across, and say what we need to say?'"

Despite the rising cost of game development in the AAA space, prices have largely stayed the same for generations. "It's been $59.99 since I started in this business, but the cost of games have gone up ten times," he said. "If you don't have elasticity on the price-point, but you have huge volatility on the cost line, the model becomes more difficult. I think this generation is going to see those two imperatives collide."

Game developers are increasingly looking to microtransactions to help expand the profitability of games. In fact, it's a bigger news story these days if a AAA game does not feature a microtransaction system.

Layden said he would like to see the AAA industry return to the 12 to 15-hour AAA game. This would allow more people to actually finish games, and the creative expression could be better, too. "I would finish more games, first of all, and just like a well edited piece of literature or a movie, looking at the discipline around that could give us tighter, more compelling content," he said.

NPD analyst Mat Piscatella responded to Layden's comments, saying 10-15 hour games "just don't sell" at a level that would justify a 2-3 year development time.

Layden is not the first person to call out the AAA games business as unsustainable. In 2012, Assassin's Creed III director Alex Hutchinson said the pursuit of AAA games represents a "cancerous growth." Because of this, Hutchinson said he expects AAA games to die out.

"I think that will leave the AAA blockbusters as nothing more than the last of the dinosaurs," he said.

Hutchinson run nows Typhoon Studios, the developers of Journey to the Savage Planet. The studio was acquired by Google Stadia in 2019.

As for Layden, he left PlayStation in 2019 after more than 20 years with the company. He is currently on sabbatical and he has not announced any plans to return to any job.

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