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Shawn Layden: When your costs for a game exceed $200 million, exclusivity is your Achilles’ heel

TheTony316

Member
Nintendo is doing fine without PC.

I think what Sony needs to do is reduce dev costs and focus more on smaller and mid sized games like they did in the PS1 and PS2 days.

Maybe have 1 big AAA game a year and a couple of smaller games sprinkled in or skip AAA for one year and instead have a handful of mid - smaller ones.
 

Aces High

Gold Member
It's times like this that Nintendo is even more smug while they're laughing their way to the bank, and rightfully so.
Nintendo understands better than anyone else what it means to operate in a dynamic market.

Only because they're succesful now doesn't mean they will be succesful tomorrow.

Nintendo goes much higher risk with every new console than any other player in the industry.

Wii, Wii U, Switch, all these systems were innovative high risk projects. Two of them yielded high rewards.

Saying Sony shouldn't change stuff because Nintendo isn't changing stuff is pure ignorance. Nintendo is innovating all the time. It's the reason why they're the succesful.
 

Boss Mog

Member
Multiplatform makes sense for GaaS and games that have deep online modes with communities.

Single player exclusives are what makes your hardware and ecosystem appealing though, otherwise why bother making hardware in the first place? It's an extremely costly endeavor.

If studios want to reduce costs then fire all the incompetent DEI hires who contribute absolutely nothing. The only thing those people can create is a toxic work environment. A mentally ill degenrate screaching "lombax titties" in the office while serious employees are trying to get work done is not helpful. Also stop using woke consulting firms whose only goal is to inject politics and take all the fun out of our games. Yeah Blackrock probably won't want to invest in your company anymore but in the long run your company would be better for it. Japanese companies are resurging by making quality games that are fun to play; gamers are responding to it.
 

Diddy X

Member
I know Nintendo are doing fine with their exclusivity strategy but if they released their games on PC then they would truly be swimming in 100$ bills. And also I think it's going to happen sooner or later else they, even with their good financial, are gonna get eaten by the bigger companies.
 
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daninthemix

Member
I know Nintendo are doing fine with their exclusivity strategy but if they released their games on PC then they would truly be swimming in 100$ bills. And also I think it's going to happen sooner or later else they, even with their good financial, are gonna get eaten by the bigger companies.
Nintendos future on PC is to remain perpetually emulated.
 

hemo memo

You can't die before your death
"Helldivers 2 has shown that for PlayStation, coming out on PC at the same time. Again, you get that funnel wider. You get more people in."

"For single-player games it’s not the same exigency. But if you’re spending $250 million, you want to be able to sell it to as many people as possible, even if it’s just 10% more."

"It’s crazy how you can lay off 900 people and have 300 open recs on your website. There’s a mismatch between what companies think they need and what they actually have. What did they say, 12,000 or 13,000 last year and we’re already up to 7,000 just in February of this year?"

"I don’t want to sound like a broken record, because I’ve been saying this for five years, but it’s the rising cost of development. That’s the existential threat. It’s not “live service gaming is tricky” or anything else. When we’re in the $250-300 million to make a game world…I’m giving a talk about this tomorrow at Stanford. Gaming is reaching its cathedral moment."

"I’m afraid that we’ve bought into the triple-A, 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 double-A gaming. I’m all for that."
Facts
 

midnightAI

Member
Nintendo is doing fine without PC.

I think what Sony needs to do is reduce dev costs and focus more on smaller and mid sized games like they did in the PS1 and PS2 days.

Maybe have 1 big AAA game a year and a couple of smaller games sprinkled in or skip AAA for one year and instead have a handful of mid - smaller ones.
They don't need to focus on small games,they need to do both. These internal studios are easily big enough to split into multiple teams (mostly, if they haven't done it already). One large team to work on the big IP's and one or more smaller teams working on new smaller games/IPs or spin offs, or remakes of old games in their catalog or remakes of Sony games from dead studios (eg. Naughty Dog remaking Jak and Daxter, or even remaking the PSP Daxter game, or one of the Studios reviving The Order, heck, let Polyphony work on a new Driveclub)
 
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Hoppa

Member
PlayStation has to put the gamer in the center of their mission if they want to make multiplatform happen.

Multiplayer games like Helldivers 2 are a hard reality check for console gamers as they highlight the scammy aspects of the PlayStation eco system.

On Steam, you don't have to pay for online play.

Helldivers 2 is a crossplay game. Both console and PC gamers play together on the same servers. But only PlayStation customers have to pay for the "infrastructure". It's obvious at this point that the online fee on PlayStation is just a scam.

On Steam, you can return the game and get a full refund.

You don't even need a reason. You can just write "For the lulz" and Valve will send the money back within hours. Admittedly: Valve is a private company. They're not listed on the stock exchange and can prioritize long term success over short term profit. Sony management might have much less leeway even if they wanted to change these things.

The only way PlayStation will be succesful on PC is if they release their games day one on Steam. It's important that Sony understands that.

The reason is the viral power of PC gaming.

The PC crowd can create crazy hype trains out of nothing that go beyond everything you see on any other platform.

They are the most hardcore of the hardcore, the best connected, and the most unforgiving playerbase. But they're also the most loyal fans if you treat them with respect.

The entire Battle Royal genre for example is based on PC community work that got started whithout any professional marketing whatsoever.

If this entire industry goes down in flames, PC gaming will just shake it off and create their own games.

Balancing the benefits of console gaming vs PC gaming will be one of the most challenging tasks for Sony.

PC gaming has advantages like free choice of input. Mouse and keyboard allows for much better communication in multiplayer games and give you a much better user experience in strategy games and shooters.

Should Sony allow mouse and keyboard on PlayStation?

My reasonable thinking says no as it would be too far away from the roots of the PlayStation brand.

My intuition, however, says yes for several reasons:

- Crossplay won't go anywhere. Why not give console players the option to level the field.

- M+KB gives PlayStation a new revenue stream. People buy console + 2 controllers. Why not let them buy console + 2 controllers + M + KB? Make these peripherals high quality and even PC gamers will buy them.

- The most important part: The entry price to PC gaming is crazy high and rising. In times where PC gaming becomes handheld gaming, PlayStation's niche shouldn't be couch gaming. It should be cheap entry price gaming. PlayStation 5 is an amazing gaming machine. I think many people would love to use it as a cheap gaming PC with M + KB.

Last point: Game prices

PlayStation games have to be cheaper when you have a PS Plus sub. Get rid of the 'pay for online scam' and give subscribers a discount on games all year round.

For the highest PS Plus tier, subscribers should get a price watch feature. So if Valve or Microsoft or whoever does a sale, highest tier PS Plus subscribers should get matched prices for multiplatform games in that sale.
Look Wow GIF by Rodney Dangerfield
 

Killjoy-NL

Gold Member
I wonder how often that actually happen; PC gamers buying a console because of an exclusive.
🤔

Don’t have any numbers but most of my friends are gaming on PC and none of them has gone from PC to PC+console (except Switch). But many of them has gone from console to console+PC.

Personally I’m divided on this PC porting strategy. I mean I obviously love it as a PC gamer but I 100% think the consequence is going to be that less people buy their console and console versions of their games, even with long delays, because that’s my own strategy going forward.

In short I think this could happen:
Console -> console+PC -> PC
Thing is, people don't have to leave PC.

All Sony wants is grow the console-installbase, so if people go PC + PS5, them buying a PS5 is all that matters.

You just have to get people to want a PS5.
Sony bringing games to PC is kinda like a drugdealer giving junkies a taste of his good stuff every now and then.
Going by the PC port-begging, it's already working.

The key is how Sony will handle (timed-)exclusivity.
 
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Fess

Member
Thing is, they don't have leave PC.

All Sony wants is grow the console-installbase, so if people go PC + PS5, them buying a PS5 is all that matters.
I don’t see that transition happening much. Do you? Like I said I don’t know a single PC gamer who has bought a PS or XB console because of exclusives.
But I know several people going the other way, console gamers buying a PC. I’m one of those.

Common:
Consoles -> console+PC

Less common:
PC -> PC+console

So I think it’s a strategy with lots of risks. And remember last generation when Microsoft started doing PC ports of Halo and Gears etc. Playstation fans instinctively went: ”- Oh cool then I don’t need a Xbox anymore.”
Risky business.
 

Killjoy-NL

Gold Member
I don’t see that transition happening much. Do you? Like I said I don’t know a single PC gamer who has bought a PS or XB console because of exclusives.
But I know several people going the other way, console gamers buying a PC. I’m one of those.

Common:
Consoles -> console+PC

Less common:
PC -> PC+console

So I think it’s a strategy with lots of risks. And remember last generation when Microsoft started doing PC ports of Halo and Gears etc. Playstation fans instinctively went: ”- Oh cool then I don’t need a Xbox anymore.”
Risky business.
PC gamers are starting to build a library within the PS eco-system.
This is precisely what Phil Spencer was talking about during the Easy Allies interview. It makes people invested into the brand. And as time goes on, it'll become easier for Sony to get people to buy a PS5 alongside their PC, especially if they suddenly make certain games full PS-exclusive again.
Sony plays a long-term game, not short-term.

And at worst, Sony will make a bit of extra profit.

And people reacted like that mainly due to day 1 PC releases.
MS also shifted focus to GamePass and told everybody that they don't need an Xbox to play Xbox games.

Sony literally says "Playstation will remain the core of the business", in reference to consoles.
All execs that spoke on the matter, have indicated that consoles are their main focus.

Two completely different situations.
 
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Fess

Member
And people reacted like that mainly due to day 1 PC releases.
Nah it wasn’t day one back then, it was late and slightly upgraded ports just like Sony do now. It’s not without risks. And I don’t see traditional PC gamers getting into console gaming. Those who have both platforms usually go the other way, PC first, console later. Except Switch, it’s an outlier.
 
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64bitmodels

Reverse groomer.
Exclusives traditionally only did that job (of attracting people to the hardware) by having class-leading visuals and therefore costing $200 million plus.
Sure, but if Nintendo proves anything you don't need either class leading visuals nor 200 million production values to attract people to a console.
Plus, these costs are taking insane cuts out of Sonys bank.

Not that I think Sony should copy their example as I've said before people want nice graphics for their 500 dollar console. But more games like returnal and helldivers 2 would go a long way to bankrolling the AAA games
 

Saber

Gold Member
Thats a very stupid take for the sake of "exclusives are bad".

The wrong here is wasting 200 freaking millions to developing games(way more than that in case of Sony). Nintendo make extremelly fun and polish games with less budget than that and still sells alot. And the only thing people can do against them is try to mock them saying they only make phone games.
 

midnightAI

Member
It isnt if that exclusivity still grants you $500 million in sales

What multiplatform could do however is lose you sales of your console which in turn loses you sales of that game and other games for said console, loses you subscribers of your online service, lose you sales of peripherals etc.
 
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Woopah

Member
I challenge this notion. The PS1 did not grow the industry, the industry was growing regardless and Sony was present with the technology of the time when Nintendo missed hard. Had FF7 and all of those other big Playstation hits come to N64, Nintendo would have seen record growth and a huge success building upon the SNES.

The Wii certainly did not grow the industry, it was a complete illusion that Nintendo foolishly bought into. It just so happened the waggle controls and cheap pricing made it an impulse buy for everyone. This is why your weird aunt got one and raved about Wii Sports for 2 months before chucking it in a closet and never speaking of it again. None of those people bought a Wii-U or a Switch, because they enjoyed playing a game or two and that's it. They are not gamers on a regular basis, and they don't care about it enough to purchase an expensive console.
The people who played Wii for two months and chucked it in a closet was a small minority of the audience. The average Wii owner had more than 9 retail games.

I don't think it's unreasonable to suggest that a fair chunk of the people playing Nintendo's Sports, Fit and Mario Kart games on Switch also played them on Wii.
 

Edgelord79

Gold Member
Not sure how anyone could really argue that $200+ million dollar exclusives are sustainable business practices.

Layden outlines it well.

Raising the price of games also does not solve the sustainability/resiliency problem for these businesses.
 
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I don’t necessarily agree with all the decisions made my Sony but at least they have conviction. They choose a strategy and see it through thick and thin and not afraid to cut when it’s an obvious wrong move.

Unlike that other company that has a scattershot approach, acting like a blind person throwing all kinds of shit at the wall to see what will stick.
 

Killjoy-NL

Gold Member
Not sure how anyone could really argue that $200+ million dollar exclusives are sustainable business practices.

Layden outlines it well.

Raising the price of games also does not solve the sustainability/resiliency problem for these businesses.
Isn't there data floating around here on Gaf from the Insomniac leak that shows all Sony's major AAA titles from recent years were profitable by quite a margin?
 

midnightAI

Member
Not sure how anyone could really argue that $200+ million dollar exclusives are sustainable business practices.

Layden outlines it well.

Raising the price of games also does not solve the sustainability/resiliency problem for these businesses.
Of course it is (sustainable), so long as your profit exceeds the development costs, of which Sony games generally tend to do.

In fact, weirdly (or not), the least successful games Insomniac makes is actually the cheapest one to make, Ratchet and Clank.

The only issue I see with really expensive games is they are less likely to take any form of risk, but that's a known thing that Sony factor in, but they do create some more riskier franchises that are cheaper to make (Returnal being a good example, Ratchet and Clank less so but they did use Ratchet as a test bed for some of the fast loading and possibly some RT techniques we now see in Spider Man 2)
 
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Edgelord79

Gold Member
Isn't there data floating around here on Gaf from the Insomniac leak that shows all Sony's major AAA titles from recent years were profitable by quite a margin?
I’m talking about resiliency and sustainability not profit. Those types of plans involve more variables than profit to date.

Just because they were/are profitable now doesn’t mean much in the next 10-30 years.
 
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Edgelord79

Gold Member
Of course it is (sustainable), so long as your profit exceeds the development costs, of which Sony games generally tend to do.
No shit.

Except the curve those are on seem to have a lesser gap as time goes on. You are looking at it through a very monoscopic lens in that respect.
 
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Killjoy-NL

Gold Member
I’m talking about resiliency and sustainability not profit. Those types of plans involve more variables than profit to date.

Just because they were/are profitable now doesn’t mean much in the next 10-30 years.
True, but that's why Sony will release more GaaS, incl on PC, like HD2.

These discussions go in circles every single time and it all boils down to the same thing.
 
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ArtHands

Thinks buying more servers can fix a bad patch
I’m talking about resiliency and sustainability not profit. Those types of plans involve more variables than profit to date.

Just because they were/are profitable now doesn’t mean much in the next 10-30 years.

Exactly. I got a feeling some folks refuse to see that. Current high end games cost $200-300 millions, but that doesn't mean the development cost will not go up in the coming years.
 

Edgelord79

Gold Member
Exactly. I got a feeling some folks refuse to see that. Current high end games cost $200-300 millions, but that doesn't mean the development cost will not go up in the coming years.
If nobody has ever been part of creating a sustainability and resilience framework before at a large company, I can see why they would think the way they do. It’s complicated and there are a lot of moving parts.
 
Me purchasing TLOU3 or not would have nothing to do with its' length, budget or price.
How many others would, though?

“Our next installment in this beloved series is shorter than the previous two games, and made on a smaller budget in order to control costs, and increase our corporate operating margins. To bring as much value as possible to our shareholders. Please continue to enjoy this smaller-scale entry for the full price of $70.”

Needs to be work-shopped a little, but that’s essentially where things would be going if “game budgets started to get smaller”. I guess I don’t see the upside to us as players.
 
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Deerock71

Member
dk2.jpg


Nintendo can make numerous games with the budget of one Sony game.
I've been looking at this whole thread wondering if anybody besides me was thinking a 200 million dollar production cost seemed unsustainable, because I guarantee Nintendo doesn't come close to that much money to produce a game.

So...you produce a game that you launch on Xbox/PS5/PC that cost 200 million, but it's a wet fart. Recent example would be kill the justice league (supposed to have been AAA, right?). How do you recover from that?
 
How many others would, though?

“Our next installment in this beloved series is shorter than the previous two games, and made on a smaller budget in order to control costs, and increase our corporate operating margins. To bring as much value as possible to our shareholders. Please continue to enjoy this smaller-scale entry for the full price of $70.”

Needs to be work-shopped a little, but that’s essentially where things would be going if “game budgets started to get smaller”. I guess I don’t see the upside to us as players.
I think an alternate pitch could be

“TLOU3 - Get ready for our biggest and most ambitious game to date.

Play day 1 on Steam / Series XS / Switch 2 / PS5 for $70.

Get expansion pass and get 10% off on 3 planned expansions.

Engage in Factions 2, our groundbreaking multiplayer mode included with purchase.”

I mean, if you are spending $200-300 million, might as well go all out and allow it to be one of biggest game out there.
 

drganon

Member
I think an alternate pitch could be

“TLOU3 - Get ready for our biggest and most ambitious game to date.

Play day 1 on Steam / Series XS / Switch 2 / PS5 for $70.

Get expansion pass and get 10% off on 3 planned expansions.

Engage in Factions 2, our groundbreaking multiplayer mode included with purchase.”

I mean, if you are spending $200-300 million, might as well go all out and allow it to be one of biggest game out there.
That's one stupid pitch.
 

ReBurn

Gold Member
Until games like Ghost of Tsushima, Days Gone, Death Stranding, God of War, Horizon. Bloodborne, Zelda TOTK, TLOU2, Uncharted 4, Spiderman 2, Demons Souls, dont make profit.… People need to stfu about exclusive AAA games not making a profit
I don't think anyone is saying that those games don't make a profit. What people are saying is that, in a vacuum, a game being profitable on its own just may not be enough when development budgets are as high as they are. The discussion is the ongoing viability of the AAA business model when development budgets are as high as they are.

The issue is operating margin of the company as a whole, not the profitability of individual games. If a game sells for $70 and it sells 5 million copies at full price, that's up to $350 million in revenue. If your game's budget was $100 million your company's operating position is much better than if your game's budget was $250 million.
 
If he what he said had any merit, he would still be employed by Sony. He just comes off as salty and tries to undermine the success because he wanted to kill platform exclusivity for profit, but this is the same thinking that killed the Xbox hardware brand for short term gain. Now we have a clue of why he isnt working there anymore.....

Exclusives are bad for business in 2024, mobile gaming is the future and everyone would rather play 10 hour AA games after spending thousands of dollars for their setups.....am I missing anything?🤔
 

SmokedMeat

Gamer™
I've been looking at this whole thread wondering if anybody besides me was thinking a 200 million dollar production cost seemed unsustainable, because I guarantee Nintendo doesn't come close to that much money to produce a game.

So...you produce a game that you launch on Xbox/PS5/PC that cost 200 million, but it's a wet fart. Recent example would be kill the justice league (supposed to have been AAA, right?). How do you recover from that?

Right? The developer is putting their existence on the line every time. One poor release and you could find yourselves out of work.
With smaller budgets you’re not jeopardizing everyone. The sad part is with Kill the Justice League there was people expecting WB to dissolve Rocksteady! The team that gave us arguably the best superhero games in the business. As if developers of that caliber are disposable.
 

Shut0wen

Banned
Except sonys single players games havnt made the same impact as helldivers, i think sony is better putting putting there GAAS on pc day one but not there single player exclusives since they sel rather poorly
 

zedinen

Member
Sony have repeatedly stated recently that they aren't doing fine.

Totoki is not Sony.

He is 60 year old opportunistic executive, who has never worked in the industry, looking to maximize his own pay.

He lives off manipulating EPS and share price by engaging in buybacks and paying more and more dividends. He needs cash ASAP.


Sony needs to improve their margins.

SIE low margin strategy is the only way to run an asset-light business and drive competitors out of the market.

SIE has made more money over the past 4 years than the previous 26 years combined.


Excluding the massive increases in R&D and D&A and costs related to acquisitions, SIE operating income in FY23 would be 500 billion yen.

Jim Ryan and Hermen Hulst are just choosing to reinvest profits into growth.

Does it make sense? The answer is YES.

Helldivers 2 has sold "way more" than 5 million units already.


It's times like this that Nintendo is even more smug while they're laughing their way to the bank, and rightfully so.

Nintendo business model is even riskier.


qGJTBjx.jpeg



jPWELZU.jpeg
 
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BennyBlanco

aka IMurRIVAL69
If he what he said had any merit, he would still be employed by Sony. He just comes off as salty and tries to undermine the success because he wanted to kill platform exclusivity for profit, but this is the same thinking that killed the Xbox hardware brand for short term gain. Now we have a clue of why he isnt working there anymore.....

Exclusives are bad for business in 2024, mobile gaming is the future and everyone would rather play 10 hour AA games after spending thousands of dollars for their setups.....am I missing anything?🤔

Yes, Sony deemed it such a bad idea to release games on PC that they bought Nixxes and implemented his plan
 

Kokoloko85

Member
I don't think anyone is saying that those games don't make a profit. What people are saying is that, in a vacuum, a game being profitable on its own just may not be enough when development budgets are as high as they are. The discussion is the ongoing viability of the AAA business model when development budgets are as high as they are.

The issue is operating margin of the company as a whole, not the profitability of individual games. If a game sells for $70 and it sells 5 million copies at full price, that's up to $350 million in revenue. If your game's budget was $100 million your company's operating position is much better than if your game's budget was $250 million.
I want AA games, but AAA games helped Playstation reach there highest profits ever on PS4. A mix of both would be good
 
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