Former PlayStation executive Shawn Layden said that the rising costs of game development are leading to consolidation and a lack of diversity. In an interview with GamesIndustry.biz, Layden said that the increased costs of game development are not sustainable, especially since the number of people who own consoles today is roughly the same as in the late 1990s–about 240 to 260 million. Layden gave the interview after joining the advisory board for Streamline Media Group, where he will help provide strategy for both games and business.
He said instead of increasing the audience size, the industry has just gotten people to spend more money on games. Layden said that smaller studios will soon get priced out of making games. This isn’t the first time Layden has said that the cost of game development is ballooning in an unsustainable way.
“With each console generation, the cost of games goes up 2x. So PS4 games were $100m to $150m, so it stands to reason that PS5 games — when they hit their stride — will be in excess of $200m,” Layden told GamesIndustry.biz. “It’s going to be very difficult for more than a handful of large players to compete in that space.”
Layden went on to say that because of these rising costs, smaller companies will be absorbed into larger ones, limiting the amount of diversity in the games industry.
“During that time we have also seen more consolidation. Consolidation is the enemy of diversity in some ways. It takes a lot of playing pieces off the table as they grow into these larger conglomerates,” Layden said. “And again, we end up with this problem with diversity.”
“Music on a revenue basis is probably one-fifth of the games space. But their cultural impact is 100x what gaming is. Right now, we are narrowing ourselves down into genres and sequels and certain types of games,” Layden said. “Favorites like my own, like Parappa and Vib-Ribbon, those things don’t seem to get a chance to come out on stage. That’s bad for the industry and for fans.”
As for indie developers, which don’t spend hundreds of millions on development, Layden said they face different challenges. He said that indie developers need to constantly look for funding in order to support their projects, with publishers holding this power over their heads. Indie developers are creatively restricted without funding but have to present creative ideas in order to get funding.
“So how do we create an entryway for bona fide talent, interesting people, who wish to break into interactive entertainment, but don’t have the ability to surmount that giant financial hurdle? And it’s getting higher and higher all the time,” Layden said. “And the creator’s ability to influence that outcome is becoming weaker and weaker.”
While Layden is concerned about the financials of making video games moving forward, video game sales in the U.S. have continued to increase after the spike in sales caused by the pandemic last year.