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Constraints, Creativity, and the Collapse of AA with Shawn Layden
56 Plays17 days ago
🎧 Episode Summary:
In this episode, Shawn Layden unpacks the creative crisis in AAA development, why $100M+ game budgets are unsustainable, and how developers can reclaim innovation through constraint. Joined by industry analyst Lewis Ward, we talk indie survival, pricing psychology, the rise of Switch 2, and the real reasons games no longer feel “complete.”
Whether you’re building a studio, publishing your first title, or just care about where gaming is headed, this one’s for you.
🧠 5 Key Takeaways:
- Constraint is the Mother of Creativity
Shawn argues that early tech limits forced creative brilliance. Today’s boundless tech might actually dilute focus. “Discipline is more valuable than horsepower.” - The AA Tier Has Collapsed
The middle class of game development is disappearing. Studios either go ultra-lean indie or mega-budget AAA. Shawn says we must revive sustainable $20M–$80M games. - Game Pricing is Outdated
The $59.99 model hasn’t budged in decades — even as dev costs skyrocket. - “No One’s Coming to Save You”
Indie devs need to act like entrepreneurs. That means tighter budgets, faster shipping, and proving the team can actually deliver. Don’t wait for publishers, move first. - Game Completion = The New Differentiator
Shawn misses the joy of rolling credits. He believes more studios should return to crafted, finishable games. Not just endless live ops.
🔗 Relevant Links & Mentions:
- 🎤 Shawn Layden on LinkedIn
- 📊 Lewis Ward, IDC
- 🎮 Girls Make Games Scholarship Fund
- 🧵 More from Player Driven
Sponsor:
Nexys Mobile - Check out the RedMagic 10 Pro, the ultimate gaming phone exclusively on Nexys Mobile with plans starting as low as $25 a month! Check it out here: www.nexysmobile.com/redmagic
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Transcript
Introduction and Guest Overview
00:00:00
Speaker
everybody, welcome to Player Driven. Here's what you're about to hear on today's episode. Today we're joined by Sean Layden. He's the former CEO of Sony Computer Entertainment of America.
00:00:11
Speaker
And we're also joined by Lewis Ward, the head of gaming research at the IDC. We talk about all things gaming. It's a really exciting conversation.
Creativity and Challenges in Gaming
00:00:21
Speaker
We talk about how constraints spark creativity and how having a limited number of resources allowed you to think differently.
00:00:28
Speaker
We talk about how indie studios must embrace self-sufficiency in today's market and what it's like in the world of funding. And then we talk about how the gaming economy is evolving.
00:00:39
Speaker
You know, we have to switch to an announcement that came up and had us how does price, how do the prices catch up from where gaming is to where we are today? It's a really fun conversation. Sean and Lewis are great together.
00:00:50
Speaker
And if you've been enjoying PlayerDriven, we ask that you like this, share this. If you think someone would get any value out of this, we post content to all different social networks. So be sure to like us and follow us. And thank you for providing all the feedback that you have.
00:01:02
Speaker
And I really hope you enjoy this week's episode.
Sponsorship and Product Experience
00:01:09
Speaker
This episode is sponsored by Nexus Mobile. I've been using the Red Magic Pro 10 for about four weeks now, and strangely enough, what really excites me is the form factor. It's a big screen and it is a big phone, but it fits in my pocket really nicely, probably better than my Fold 5.
00:01:23
Speaker
There's no camera bumps and it lies perfectly flat on the table, which blows my mind. It feels slim and solid and check it out on Nexus Mobile. And be sure to enjoy today's episode.
Sean Layden's Career Journey
00:01:33
Speaker
Good morning, good afternoon, good evening, everybody. Welcome to Player Driven.
00:01:37
Speaker
Greg here. Today we have a really exciting episode. We are joined by Sean Layden and we are also joined by Lewis Ward. Sean was with Sony for over 30 years. He started as a producer over in Tokyo and made his way up to the president and CEO of Sony Computer Entertainment of America.
00:01:54
Speaker
It is an awesome story. I'm excited to pick into all different bits of that. You can hear a lot about Sean and lots of different things online. So we're going to try and take a different angle here and learn some new stuff.
00:02:05
Speaker
And Louis, Louis, you've probably heard if you're a listener of the podcast, Louis joins us a lot. We love listening to Louis. He is the head of ah research for gaming, XR, VR at the IDC. He does some great research, highly recommend it.
00:02:19
Speaker
I've been boring everyone with this. So let's get on to today's podcast. First off, Sean, thank you so much for joining me today. How are you? Hey, Greg. Thanks for having me on the show.
00:02:30
Speaker
um It's a great day. it's ah It's a wonderful afternoon in San Francisco, California. And yeah, I like nothing more than getting together with people and talking about
Nintendo Switch 2 Announcement
00:02:40
Speaker
games. and I mean, you guys all saw the announcement coming out of Nintendo a couple of days ago on Switch 2, the not-so-secret secret project they're working on, which we all got to hear about.
00:02:50
Speaker
And um we're excited. I mean, Switch has been a huge success for Nintendo. I think it's interesting to look at Switch 2 and realize, in my memory anyway, that's the only Nintendo product that ever was called 2. You know, they would change their platforms all the time, give it a new name, N64 or GameCube or Wii.
00:03:07
Speaker
But they see the brand value in Switch, which is, you know, manifest and apparent. ah going with Switch 2. I think those are all positive signs. And i think I think they poke through the...
00:03:18
Speaker
the ceiling on price elasticity where we thought none existed before. i mean, what's a ah so Switch now? $199? Yeah, I think for Switch Lite, maybe $300, depending on what you got in the bundle.
00:03:32
Speaker
Right. And so now with this s new Switch 2, they're you know pushing out beyond the $400 to $450 or $499 with the bundle. Their software pricing the thing we've talked about for years.
00:03:43
Speaker
you know We've been paying $59.99 for games since... you know, before there's electricity and that never changed until recently went to $69.99 and people went crazy. And I think Nintendo is just pulling the bandaid right off and saying, looks like it's 80 bucks for a, for a frontline game on the new platform. And I'll throw it over to you, Lewis, because you, you sit closer to those industry circles than I do these days.
00:04:07
Speaker
ah Feedback I was seeing was, shall we say mixed? Yeah, well, I mean, I think the things they would underscore, Sean, is that um it's a much more powerful device. So it's another semi-custom Tegra SoC, but they they did 12 gigs of RAM rather than four. I think there's like eight times as much memory.
00:04:26
Speaker
So certainly a point they were hammering away in New York yesterday. was that um the hardware is a lot better and they would argue that it's not just for first-party games but for system services so some of the social stuff they want to talk about ah some of the new feature capabilities to try to get you know more social in what they do but also for third-party devs so i guess i'll believe it when i see it that it'll become a lot more of a third-party friendly platform But certainly one of the points they wanted to get across is that because it's not so far behind PS5 or Xbox Series X on simply hardware specs,
Nintendo's Market Strategy and Challenges
00:05:01
Speaker
that a lot more third-party games will start showing up on Switch 2 than you might have seen in previous generations. So that stuck out to me.
00:05:09
Speaker
um On the games front, there's a lot of other shoes to drop, of course. ah But... um you know One of the main things that they emphasized, ah including Doug Bowser, who I met with briefly over there in New York, um is that it's called Game Chat, which is that new social feature. so i don't know if you had a chance to check it out, but you can have up to 12 people do live voice chat.
00:05:32
Speaker
um Four of them... You can also like share your screen. So you can not only chat, but you you can see what they're playing and like a sub part of the screen. um And if you buy their $50 camera, although I guess you could do any USB-C camera, you could potentially, it'll kind of um do like a live streaming thing where it'll kind of ah put the put in the background, the video game you're playing.
00:05:54
Speaker
And then your face will show up so you can see people's expression, either playing the same game or a different game. So, I mean, we'll see what happens with the social layer, but I do give them credit for getting much beefier on the hardware.
00:06:06
Speaker
Yes, raising the price. And also you're right about the, I guess, up to $90 costs of a AAA video game, which is, yeah, I think that that has caused some mixed reactions to put it mildly.
00:06:19
Speaker
But I think they deserve credit for beefing up the hardware a lot and then um hopefully augmenting the social layer to make it more of a, you know, interesting social experience for for their for their user base, which is, you know, largely they make great single player games, not necessarily great multiplayer games. So that that may change.
00:06:37
Speaker
Well, does look like with Switch 2, they're leaning more heavily into the multiplayer online, at least networking experience more so than they have on previous platforms. So that's going to be good for the fan base, I'm sure.
00:06:49
Speaker
And something that really didn't come up a lot, and Louis, maybe you can tell us from your experience, I've heard the battery life is actually worse than on current Switch, which I would say for a Nintendo fan would be something that would be concerning.
00:07:01
Speaker
ah in So the only thing they said in their public stuff was that ah it's actually supposed to be 20% better. So we don't know. it We haven't had it in our hands. But they they said 1.2x on the battery life relative to Switch was their official line.
00:07:16
Speaker
I didn't get anything more than that. But i could you could think that... with the improved semi-custom Tegra SoC that is probably is more power efficient.
00:07:28
Speaker
But you're right. Depending on the game, right? If you're doing... I don't know if the handheld will even do 120, but maybe it can, maybe some of those games will run at 120 Hertz. um But if you're running, you know, a game that's a switch game that might've been 30 or 45 frames a second, you're now running at 60, 90 or 120 that should shoot through a lot more battery life. So I don't know exactly how they did the comparison, but they at least officially said that the battery life was better.
00:07:54
Speaker
But you know, I guess there's a lot of things that are TBD in terms of, you know, how Switch 2 actually performs in the wild, including the microphone. So when you do the social stuff, it's got a little microphone built into the top of it.
00:08:05
Speaker
a ah But when you have it plugged into a TV set, as I do, you know, how far away is that realistically going to work? Are they really going to be able to hear me? Right. And so ah some of the things about the social stuff is is very much up in the air from a practical sense, as far as I'm concerned.
00:08:20
Speaker
It's giving me a Microsoft Mixer vibes, you know, it's a, hey, we're going to create our own social streaming thing. Like, good luck against Twitch. yeah Yeah, we'll see.
00:08:30
Speaker
I don't expect too many yeah some too many of the cameras to sell because I believe there's exactly one title that has the camera built in and it doesn't launch until July. So I wouldn't expect it to sell like hotcakes out of the gate.
00:08:42
Speaker
Sean, you've been a part of something like this before with PS4 and the Vita. You know, rumors leak online and people are talking about, I mean, Switch 2 was not a great kept secret, right? But, ah you know, people were leaking what's going be what people are wrong.
00:08:55
Speaker
Does it build up nerves for the people within the company? Like, oh, no, this is going to leak or is it good? Like, what is Nintendo's vibes before walking out tomorrow or yesterday and presenting this stuff?
00:09:06
Speaker
Well, first of all, um I would be the last person in the world who would try to predict what a Nintendo vibe feels like. Um,
Game Pricing Evolution
00:09:13
Speaker
they've been super successful, been in the business a hundred years. If you count their playing card business, um, they have a way of approaching this market, which is unique to themselves, which is why we often talk about the PlayStation Xbox rivalry, but Nintendo kind of has its own lane that it owns and operates and it's very successful. And that's not diminishing it at all. In fact, it just shows how well they've defined where they find their place in the world of entertainment. And they've captured that and done very well with it. So leaks and stuff like that, though, that, that plagues all industries.
00:09:42
Speaker
right you know no one's No one's more focused on that than the boys at Apple when it comes to getting ah getting all head up about about leaks of information. But in today's world, it's just so impossible. i remember when we were at PlayStation, we trying to you know get our platforms done. and somebody line There are people online who are just trolling patent applications in South America.
00:10:06
Speaker
Because you'd have this leak comes out out of Brazil. So you applied for a patent, which does this, that and other thing on a technology we haven't announced yet. But of course, you've got register patents before you can have announcements. It's a you know chicken and egg thing.
00:10:18
Speaker
So um yeah, it's some in the world of the internet, that kind of accelerated ah time to leak is is almost becoming less than less than a day.
00:10:30
Speaker
So companies need to prepare for that and get in front of it. um I think largely Nintendo did well with the Switch 2. The fact they were making a Switch 2 should not have been a surprise to anybody.
00:10:41
Speaker
So let's be honest, that wasn't the best kept secret because it wasn't. But what was it going to contain? was going to bring? All of these social network features, which are kind of new to the world of Nintendo, just because they were a little bit later to the network space.
00:10:57
Speaker
It's encouraging. They really know whither where their fans live and their and their fans also live in a networked environment. That's also kind of what concerns me about this price hike, right? If anyone's going to eat this up, I think Nintendo fans will purchase Nintendo games because Nintendo games have that unique gameplay feel and you can't get it on PlayStation or Xbox or PC. And I feel like, you know what? I'm going to play Mario Kart for the next 10 years of my life. I'm just going to invest it right now. And especially that it's coming from one of the major console makers, right?
00:11:29
Speaker
Publishers are just going to eat that up and follow. It's like... It's funny as should say that, Greg, because there has been another line of conversations over last couple of years about um exclusives aren't important anymore.
00:11:41
Speaker
or let's get out of the world the exclusive. Make everybody multi-platform. That's the best way for all of us as consumers to swim in this world of video gaming is if everything's available everywhere. But right here you see, wow, that's kind of a hefty price hike from Switch 1 to Switch 2.
00:11:55
Speaker
Wow, $80 for a game? But if it's the only place where we can play Mario, then... and you Then you get your wallet out and you buy into it. And Donkey Kong and Zelda.
00:12:08
Speaker
And that first party exclusivity kind of mitigates the the sticker shock, if you will, of these price hikes because you want that content so bad. Yeah. And you know with GTA to follow, right they're going to follow suite. And it's just I think it's going to set the precedent for better or for worse. right We talked about it last time how games are getting bigger and budgets are getting bigger. but And people argue online about the price of games. And I think it's shocking when you look at back to Sega Genesis days and SNES, like games were $49.99. I don't know if people were thinking they were $30 back then, but the truth is the price of games, I feel like, hasn't risen that much over the years. And maybe it hasn't. I'm looking from my perspective.
00:12:47
Speaker
And if you account for inflation, the price of games have gone down. Yeah, that's true. Right? 2025 dollars, 100 bucks. fifty nine ninety nine and nineteen ninety nine is equivalent to like a hundred bucks So as you're you know you're purchasing power compared that against your cost of living, it's much smaller now than it was before, but still companies have been reluctant to push that price up because they probably should have done it. I was in it at the time.
00:13:14
Speaker
Probably every generation, they should have like baked in a $5 software price hike and make that the typical, well, every generation has another $5. And you
Hardware and Software Pricing Dynamics
00:13:24
Speaker
would have been up to $90 already by now.
00:13:27
Speaker
and but there There is some, um you know, competitive pressures, perhaps to keep things where they are and not be undersold by your competition. So there's concern about that.
00:13:38
Speaker
But at the same time, you know, the cost of development, I know, Sean, we've talked about this before in the past that you you know, the budgets for these AAA games is going up faster than the and the cost of a of a package game for sure, let alone the live service is kind of a different, you know, but the long tail of revenue is a kind of a different beast ah in terms of how that's measured and monetized.
00:13:59
Speaker
But just in terms of the size of the game and the the amount of hours you must invest in in it, and sometimes it doesn't even get to market, right? You know, plugs get pulled after potentially hundreds of millions of dollars invested.
00:14:14
Speaker
ah but um But you're right that in it if you if you rationalize the cost of some of these games relative to how things used to cost, the hike doesn't seem as bad over time as it would appear otherwise given inflation.
00:14:27
Speaker
Correct. And on the prices of hardware, it also seemed like ah you know for PS1, PS3 is when the thing went off the rails where was the price point.
00:14:40
Speaker
you wanted hardware, it was $399, whether it was a Sega Saturn, whether it was a PlayStation one, though, of course, PlayStation came out at $299 at that famous E3 reveal, which really upset the Apple cart.
00:14:52
Speaker
Right. But then PS3 came out at this astronomical price point of, I guess it was $599. And, um, yeah, you would have thought, uh, um,
00:15:06
Speaker
that the world was coming to an end at that that press conference when we had that price point. It just the worst thing ever to happen to the gaming industry. and we had to bring that price down, get better games out whatnot. But yeah, there's there's a strange relationship in gaming between hardware pricing and software pricing, which you don't have that same sort of even knowledge in the moment we used to have DVDs anyway and what a DVD player would cost.
Impact of Tariffs on Gaming
00:15:32
Speaker
Spotify and iTunes sort of drove the... the the rational price point of music to $0, which was not great. um But somehow in gaming, people have a real hard fixation on $399 for the hardware and $59.99 for the software.
00:15:49
Speaker
And that's solely breaking out from there because it has to. And um on the hardware side of things, look how much people will spend on the phone.
00:16:01
Speaker
So I get much more fun out of my game machine, but that's just me. You know, along with pricing, right? We also see tariffs, right? We're we're filming this on the third. The tariffs were announced today. So who knows what it's going to be when this comes out next week.
00:16:17
Speaker
But, you know, that's also going to have an impact, right? And I think, I don't know if we can have an intelligent conversation on what this is, because I don't know if we really know what- We can't have an intelligent conversation on most, Greg, let's be honest.
00:16:30
Speaker
That's fair. But, I mean- Do you think these prices have that thought in baked in already? Or you think it's kind of like, uh-oh, what are we going to do now?
00:16:42
Speaker
i I don't think you can have it baked in already because I'm sure these decisions were taken well before the announcement. and announcement was more severe than the rumored announcement, which came before it.
00:16:53
Speaker
So we'll see. We'll see if this is as a tactic to... to bring the Japanese, the Chinese, the Vietnamese ah governments to the table to try to work something out. I don't know what the end game is here, but the tariffs would be on top of whatever the current MSRP is for but any of these machines.
00:17:13
Speaker
So you're saying buy it sooner than later. If you're waiting for that Switch 2, don't wait on it Get it right away. Maybe too late already. Yeah. Oh, well. Lewis, hope you wrapped one. She would just fly to Japan and buy one there and bring it back.
Region Locking and Global Launches
00:17:26
Speaker
But didn't Lewis, didn't they say they're going back to region locking on Switch 2? Yeah. You know, I don't know if I heard anything on that. um I think I don't think they're going to launch in China, though. I kind of came away with the impression this is a global launch, but China is its own thing. And it may not even launch officially in China, which I was a little surprised by because I thought Switch had done reasonably well there.
00:17:49
Speaker
ah But I don't know. um about the region locking of ah video games, right? You're saying like they're going region lock the games to... yeah Well, they they're releasing a version of Switch 2 in Japan that's region locked to Japan. I think it's coming out for $2.99, which again, it's a fascinating thought. I think it's to combat kind of the online reselling of these games, obviously. But ah I guess, would you, Sean or Louis, would you pay less money to have a region locked device? Yeah.
00:18:21
Speaker
Well, Sean and Lewis probably know someone who can break the region lock. Anything built by man can be broken by man. It's true. Yeah, I know part of the reason if switched... But it would be it would be wrong to do so. Let me just put it out there. It would be wrong to do so.
00:18:37
Speaker
You may not agree, but don't do it. Yes. Yes. But ah you know in China, avoiding the region locking was a key. imports were purchased often. eight why imports were purchased so often that you didn't you kind of wanted to avoid the region locking because very few official games were actually released in China.
00:18:56
Speaker
So that that's actually, it probably depends very much on the country you're going to live in, but yeah China being an unusual exception for how that works. But generally speaking, region locking isn't smiled upon by gamers and it's there are ways to get around it. And you know it kind of ah kind of you're kind of begging a secondary market sort of scenario at the end of the day with it.
00:19:18
Speaker
So another Nintendo Switch announcement that was made a a week earlier, and I'm not sure if Sean knows this. And for those who are listening, this is actually the second time we're recording this podcast. ah So we're running it back, which gave us a ah great tactical advantage just to hear what has Sean talked about since then and how can we pivot the conversation. So the other Nintendo Switch announcement was that Everybody Golfs Hot Shots is coming to Switch. And in our last podcast, Sean let us know that his game that he most plays is Everybody Golfs.
00:19:48
Speaker
So are you going to pick up the new Everybody Golfs and start playing it?
Sony's Indie Game Development Strategy
00:19:52
Speaker
I'd have to buy a Switch. You get a Switch too. But I think it's also coming to PlayStation. Oh, is it? Because Bandai Namco have been you know long partners in the PlayStation group.
00:20:03
Speaker
But on the one hand, I was delighted to see that the Sony Interactive Entertainment has the openness of mind to license out some of their IP, at least in the Japanese market, um to be recreated there by Japanese developers and brought to the world.
00:20:18
Speaker
um I'm delighted, but I'm also kind of kind of wistful that there were teams there. Sony had teams there. They could be still doing that business, but ah the company chose a direction which did not include a lot of those, so to speak, double-A Japanese games.
00:20:34
Speaker
I'm just delighted that Bandai Namco has found a way to bring it back to life. Cool. That's a good insight to have there. So I know you were at Daishan, and I know ah you also were GDC, and I believe you were...
00:20:46
Speaker
right or Maybe in between you went to Portugal for a third event. So you I know you've been jet setting a little bit. um So I don't know if if you have some thoughts on maybe a highlighted dice, something that you kind of caught in the air there, maybe something at your event from um ah from ah Lisbon, I believe it was, and then...
00:21:05
Speaker
GDC. and i don't know if there's a common theme or something you want to throw out there that you you know want to get off your chest about you know these recent events you've been at, but ah kind of open floor to you in terms of you know what you took away from those events.
00:21:18
Speaker
Right. Well, thank you for that. DICE happens in February. That happens in Vegas. That's like the top 500 in the gaming global community. Lisbon was a smaller dev event, about a hundred people there, mostly independent developers from the European region talking about the year ahead.
00:21:32
Speaker
And of course, Game Developers Conference, which is complete takeover of downtown San Francisco with the great and good of the development community. lot of different themes there, a lot of different stuff we talked about. One thing that was constant in there is that everyone has, most people have some kind of PTSD from 2024.
00:21:49
Speaker
where we had survived 23, we thought it was going to happen in 24, and it still wasn't happening in 24. And so now there's a survive 25 kind of theme that's going on all of these shows.
Independent Developers' Challenges
00:22:00
Speaker
um But part of that is I think we had a breakthrough. There was a lot of complaining or angst the last couple of years about how, where are the publishers? are why Why can't I get a call back from a platform? you know i need to get a deal over here with these guys and those things.
00:22:15
Speaker
And then we saw this huge consolidation of large publishers being sucked up by larger publishers. It's that, you know, fish, fish, fish kind of thing. And my message or what I was getting back from talking to people in the development community and then talking more intimately, let's say, in Europe with them was just to come down to the hard fact, which is.
00:22:34
Speaker
For the independent developer, no one's coming to save you.
00:22:40
Speaker
No one is going to come deus ex machina with a big white knight, pick your metaphor. to come in and say, I want to give you $300 million dollars to get your vision out in the marketplace. That really didn't happen much in the past either, but it did happen from time to time.
00:22:54
Speaker
But now, right now, I think the big publishers, whether you're EA or Take-Two or Ubisoft, or if your platforms like Microsoft and Sony, as we spoke earlier, Nintendo's kind of a different highway.
00:23:06
Speaker
um Those big players are all trying to figure out what the future is going to be like for them. They're, they're, the cost of running those kind of publishers, those companies is enormous.
00:23:18
Speaker
um I think they're all looking for ways to streamline ah their offerings. Many of them lost a whole bunch of money at the um games as a service nightclub, right? Which ended with a lot of people hung over and very few people had a good time that night.
00:23:34
Speaker
So they're all in income kind of refactoring phase, but the independent development community, we're still here. We're still trying to get our games done. We to get our stuff into the marketplace and, you know budgets are tight and talent is also tight.
00:23:48
Speaker
um But how do they get along? And I think when I say you're on your own, no one's coming to save you. What that means is not despair. What that means, it should move you to action.
00:24:00
Speaker
That you've got to help. I just want to make my game. I get that. That's great. That's fantastic. But you've got to find a way to pay for that game and finance that game and get that game to market. finance The the management of the outcome and the route to market, those are still enormous challenges and in a few and up and ah days gone by you had a big publisher put their big arms around that and said don't you worry about that kind of stuff and you just go make your game and i'll take care of all of them but that's not true anymore so this a long-winded way of me saying we need new business models in the marketplace we need to find new partners to help us get our games out into the world we need to sit back and go i've got a team of bunch of these people
00:24:40
Speaker
um most from the call of duty team or whatever I hear in these pitch meetings. And we're going to come together and make this game. It's going to cost $200 million. dollars Please give us money.
00:24:51
Speaker
It's just not going to happen anymore. it's People are going to say, what have you shown to prove revenue? How have you achieved in the past? I've always found it's difficult to bet on a team's first game if that team has never built a game together before.
00:25:04
Speaker
right Oh, but they're all all-stars. I've got all the all-stars together. Sometimes a team of only all-stars is not a good team formation. ah Ask LA. Exactly.
00:25:15
Speaker
Or um remember that one year when like US or Spain played the Greek national team for the ah FIFA International Basketball Association title. And they were beat by a Greek team who weren't on the charts, who weren't ranked so high, but they were 10 guys who have been playing together for six years.
00:25:33
Speaker
You know? we We put out the the dream team, which worked the first time, but then got really not so consistent over time because five huge egos in the room, it's it's a lot to manage. So I think game teams are better served now if they find a way to focus their ambition, to come up with budgets that are definitely in the sub $100 range.
00:25:56
Speaker
million dollar range um ideally work on a small project together first so you understand the dynamics of the team. you know I love to talk to teams, go, have you guys worked together before? Oh, yeah, well, we shipped a couple of mobile games. and Well, tell me about that. What was that experience like? What did you learn?
00:26:10
Speaker
you know How did you learn about your organization and how did you manage it and how did you then adjust your milestone setting? you know Nothing substitutes for the experience of having done a thing. And I encourage all the independent studios to get small projects off the ground just to show, you know,
00:26:26
Speaker
proof of compatibility as ah as as as a workforce and then you know work on maybe bigger projects later. So in order for that to happen, funding needs to come in. And now VCs have had a hard time um finding success in the ah in the video game world because they're always looking for the hockey stick and for the big inorganic growth, that punch out. And that's super hard to predict.
00:26:51
Speaker
Mostly you can't predict it. i want something like a Fortnite. Even Epic didn't know they had a Fortnite when they were building Fortnite. Yeah, it kind of fell on its face right out of the gate, I believe, for the first year or so. I'm old enough to remember when it was a $60 game.
00:27:05
Speaker
And then they folded that tent. They ripped out the Battle Royale piece. Right. They knew what to do with it. So I would say that, you know, what I think Tim Sweeney company knew what they, they, once they hit upon that formula, they knew how to scale it and what to do with it and how to build it into a live service game.
00:27:24
Speaker
i I go back to, I think, Flappy Bird, if you remember that it was like a huge hit, but then the guy didn't know what to do with success. He was, he had no plan, you know, that's obviously a very different beast, but I think, um you know, from my much more limited perspective, Sean, it's that,
00:27:40
Speaker
And succeeding is very, very hard.
Creativity Through Constraints
00:27:42
Speaker
And just getting the game to the point of launch and hopefully having a ah relatively warm reception is hard enough. But then knowing what to do once you've actually succeeded is as much a challenge as anything else because ah you can still keep going off the rails a million different ways even after you've succeeded the first time.
00:28:02
Speaker
Absolutely. And to think that at your first... I hate to use sports metaphors, but like at your first swing off the plate, at your first at bat, you're going to hit a home run.
00:28:13
Speaker
It's not a reasonable expectation. Nice if it happens. Oh God, yes. We'll all be clap it. But that can't be it. You can't go into a project for your first time as a team you put together to talk to a publisher and say, this is what it's going to cost. It's going to do my break even point is 6 million units.
00:28:31
Speaker
Well, it almost leads to the idea that smaller is better or constraints are better because I know you've been lamenting the loss of some AAA you know publishers or AAA or sorry double a studios.
00:28:44
Speaker
And you've got these this small tier of, let's say, very creative individuals, tons of passion, some raw talent in there that probably needs to be mentored in the right way to really get to where it wants to go. And then you've got giant AAA studios that can muscle you out of your market share, even with a mediocre game or whatever, right? But in the middle is kind of where a lot of the dynamic stuff happens. And if I'm hearing you right, um you're you're almost recommending that studios today Don't try to swing for the fences. They try to scale back their ambitions to less than $100 million dollar games, get their teams right, get their strategy right, get all the pieces, you know, that they could possibly get right, you know, kind of lined up for success at a much more, uh,
00:29:29
Speaker
at a much smaller scale and try to hit a single, let's say. um I don't know if that's how you feel that you said new business models. That's not really a new business model, but it may be a a reaction to what has happened in the past couple of years and a way for companies to perhaps, you know, get around that corner into a successful place if they kind of, ah you know, constrain their ambitions a little bit and, you know, try to make a game that um ah maybe not...
00:29:57
Speaker
has a huge profit margin, but at least turns a profit and sets them up for, you know, succeeding down the line. Everything you said, Lewis, I think the, um, the missing dynamic or there's still an understanding that is not quite sufficiently baked in, in my view, that when you're working on a game project, you're working on a team project.
00:30:19
Speaker
you can that team work together? And do you want to spend $100 million dollars to finally answer that question? Or do you want to spend $20 million dollars to finally answer that question? and Depends on whose money it is.
00:30:31
Speaker
Well, indeed. But now more and more, it's becoming the direct, the money guy. you know It's one thing when you worked in this huge conglomerate and the gaming was a division of a larger multi-billion dollar corporation. And you can get away with a bit more large guess around the cash. But if it's a real, you've got money guys, put money in, they want answer to come out.
00:30:48
Speaker
um That's why back in the day you'd have like Polyphony, the team that made Gran Turismo. Their first game was Moto Toon Grand Prix, a highly animated, stylized, cartoony racing game where they got to learn how to work as a team and how to make a racing game. And what does that look like? don't worry too much about the hyper realism because we're kind of this anime sort of world.
00:31:08
Speaker
But you learned how to do that. Yeah. Ghost of Tsushima from Sucker Punch, one of the best games, most luscious games of all time. They began doing the Sly Cooper Saturday morning cartoon PS1 game.
00:31:20
Speaker
you know That's how you elevate over time. Last of Us 2 began with Crash Bandicoot. So you work over the you look over the arc of a studio's achievement and you can see exactly how that works. You can look at Insomniac from Disruptor to Spider-Man and everything in between.
Technological Advancements vs. Creative Constraints
00:31:37
Speaker
But for some team to come together and say, we're going to change your life, we're change your world with our first game right now. Okay, my suggestion is just limit your exposure.
00:31:49
Speaker
you know If you're gonna lose money, lose 10 million, don't lose a hundred million. but But try to keep it in. And so you mentioned the word constraint, Lewis, and that's something we talked about the last time we got together. was you know I think part of our challenges in console gaming sector now is that the tech is so good.
00:32:10
Speaker
it's so impressive. It's has, you know, you have terabytes on your hardware, you have, you know, 80 gigs on a double-sided Blu-ray and you have the network, which scrolls to infinity.
00:32:25
Speaker
Um, you have GPUs and CPUs now that can render you 60 frames per second at 4k levels without skipping a beat. Um, and so you're,
00:32:38
Speaker
your vision or your plan is only limited by your own imagination, which sounds like a wonderful thing, but it's actually a ah terribly weighty thing. Because what you have to do is you have to put the constraints on yourself and focus the discipline on what game are you're making. You know, it's going to make the whole world. You're going to make this thing that happens in the world.
00:32:55
Speaker
So I think we were talking, joking the other night about that was the beauty of PlayStation 1. We had the same dreams in the PlayStation 1 era that we have today, except we only had 750 megabits on a compact And you only had two megs of RAM in the machine.
00:33:10
Speaker
You know, it struggled to hit four adi as as a resolution target. But with all that, it made you really think about how you're going to make your game. So we talk about constraint is the father of creativity.
00:33:22
Speaker
You look at your constraints. What can I do in this space? You know, Ridge Racer, how can I make it so tight and so economic and so compact. I remember PlayStation 1, you put the Ridge Racer disc in, it would load the entire XE into RAM, and you could take the disc out and play a compact disc music CD while you're racing Ridge Racer around, because they were super efficient in how they how they wrote their code.
00:33:45
Speaker
That continued through PS1 and PS2. A lot of tricks on whether it's like Silent Hill going, oh my God, what are we going to We can't have the draw distance into the village. Oh, more fog.
00:33:55
Speaker
Okay, more fog. Solve the draw distance problem. You go, you play games, even in the PlayStation 3 era, where if you're walking through a village, you don't expect to open every door that you come across.
00:34:08
Speaker
don't expect to be able to break the glass on every window you see. But now that's kind of become the received expectation in any open open world adventure game. Can I go into every house and open up every door and see myself in the mirror?
00:34:22
Speaker
So people try to build that expectation. And it doesn't really add a whole lot to the game experience. It makes it more realistic. But you know it does add? Time. And what does time mean?
00:34:33
Speaker
Money. The more time it takes to build a thing, the more people it takes to build it. It costs more to build it. That's pretty easy, easy formula to understand.
00:34:45
Speaker
So can we draw back in Can we bring it down? Can we build my favorite movie last year? Godzilla minus one. Fantastic. Probably the best Godzilla movie I've ever seen.
00:34:56
Speaker
Godzilla minus one. That's not the new one. That's not the new Kong one. That's something else. That's Japanese. That's Japanese. Japanese. Okay. Old one. ah Old one from last year. Oh, okay.
00:35:07
Speaker
I haven't seen it. ah you Go see it. I've seen it three times. it's It's an amazing piece of work and it costs less than $15 million dollars to make. Wow. you know James Cameron can't do a trailer for Avatar for less than $15 million.
00:35:20
Speaker
So it's it's a discipline around it. And I think that's what the new challenge on the horizon for all of us is let's be managed, let's be disciplined, let's really have a good understanding of what the experience we're trying to convey to the player is.
00:35:35
Speaker
If you just create the open world, go anywhere, do anything, plant trees, pet the dog, race a car, that's fantastical and wonderful and marvelous, but it really doesn't Guide the player.
00:35:46
Speaker
We're not guiding the player. They can do whatever they want. Well, then as an artist, how can I say what I want to say? right if people have the freedom just to oh we're saying ignore your storyline, Sean, and we're just going to play with the ducks in the pond here.
00:35:59
Speaker
and Great, but I paid for all of that, and now you're not even playing it. Well, it's almost like if you want to do that, then make a game creation platform like Roblox. Or Minecraft. UEFN or whatever. Just give them the tools, and they will go do – I saw Eggie Party at GDC, and I'm actually going to do a follow-up interview because you know they they have like Eggie Code where you know you can you can mix and match and do these pretty amazing minigames basically – And people go do it and they will do it if you, you know, give them a reasonable amount of tools, but they certainly constrain it, right? Because you have to then make a game with pinch and tap and like finger, finger draw, right? And so you can only imagine that if you thought Roblox was hard to learn how to make your mini game, try doing it on a mobile device with two fingers.
00:36:48
Speaker
And so I was very impressed by that idea, but yeah i mean, I guess, circling back to your point is, Yeah, if you have this grand vision that isn't necessarily bounded by, you know, the technology in some meaningful way, ah then maybe you're better off, you know, ah turning tools over to a community that is willing to go build those things. And they'll lead you down the lane of this specific instance, which is very good at this and and is a lot of fun and drives a lot of traffic and hopefully makes a lot of money.
00:37:18
Speaker
ah But yes, I agree that, you know, part of being an artist, not that I am, but, you know, part of understanding, um you know, whenever you're creating anything is ah your choices of what is in and what is out ah will change.
00:37:35
Speaker
in you know inherently make other choices for you and that's that you know that point of view is expressed to the gamer whether you like it or not and hopefully they do like it but those limits also allow you to play with preconceptions about what those limits should be able to do and things like that so roundabout way saying I think I get what you're trying to say there yeah well it's like a game like Astro Bot you know they have endless technology they could use and you know draw distance to forever and you know all the memory a person needs.
00:38:09
Speaker
But they made every level nice and tight. right And a feeling that we've kind of lost in some gaming over the last five, six, seven years is the idea of completion.
00:38:20
Speaker
It's funny that you talk through this because, you know, multiple thoughts are going through my head at once, right? How do you bring back constraints to video games? But there are constraints. There's just different types of constraints that we saw in the past, right? It's network. It's how many people can join the game. It's this other stuff that's way too technical for me to understand. And Louis brought up a going great point about...
00:38:38
Speaker
You know you could go play Roblox. You can go play Minecraft. And those have pretty much kind of built-in restraints. And I hear your argument about people wanting to go in to do more, right? I'm pumped about GTA 6 because I want to go into every house and every window and do everything, right? But then there's this new game I was reading more about, Claire Obscure 33 something. I don't know if you've heard about it. It's been getting a lot of write-ups on IGN. Yeah.
00:38:59
Speaker
like people are upset that it's not an open world game, but it's a very, it's a, it's a platform, not a platformer, it's on rails. And I love when studios do that because they're trying to paint a picture. And um I remember a story similar about the first resident evil of what made it so scary was the camera angles that it provided in the mansion, right? You couldn't move the camera because they showed you exactly what you wanted to see. And as time evolved and they're oh, we're going to put in a camera control stick, right?
00:39:29
Speaker
That took a lot away from it because me, who is afraid of these games, would just kind of like peek around the corner before having to get there. And it's funny how it's ah all an art. It really is, right? like it's And it's a very it's a very clever solve, right?
00:39:43
Speaker
let's Let's just fix this ISO camera up here. And that builds a tension because your player can't see what's coming around the corner, but in some degree, you can see what's coming around the corner. Or other times you can't see anything and this dog comes through the freaking window.
00:39:56
Speaker
and you freak out. But you look at something Gran Turismo, which, you know, authentic cars, ah a master achievement in creating a driving simulation, all the feel everything was great.
00:40:07
Speaker
But the one thing people remember the most about GT was that they moved the camera. So you'd finish your Daytona or you finish a Ridge Racer, want to see a replay?
00:40:19
Speaker
And there would be the third person camera right behind your car following you everywhere you went. you just watch that for whatever reason. But Yamaguchi guys had the idea, what if we just made the replay cameras, like on a Formula One broadcast?
00:40:32
Speaker
Why don't put a camera up in the paddock? Why don't camera on the straightaway? And all of a sudden, you weren't watching the replay of your race. You're watching yourself on Wide World of Sports. It just changed the whole thing. But it was just a very clever little trick.
00:40:47
Speaker
you know It didn't take a lot of programming around that. It was just design thought. What if we move the camera? I could tell you as a as a fan, Gran Turismo 2 made me go out and buy a PlayStation. That and Siphon Filter. I'm just like, I want to play these games. I'm going to buy a PlayStation. And I was terrible at Gran Turismo.
00:41:05
Speaker
I'm not a simulation driver, I learned. But it is beautiful, I mean, to this day, right? It sets the standard on just what a beautiful game it is. Yeah. And I love Siphon Filter. That's a series I wish that PlayStation would come back in.
00:41:20
Speaker
and put a remake out there. That's going end up being some Twitter bubble somewhere. I know. Layden calls for siphon filter resurrection. um But i think it's a great story. But it's also tight. The narrative's tight. The scenes are tight.
00:41:33
Speaker
You know, Gabe doesn't have too far he can
Acquiring Game Studios
00:41:35
Speaker
roam. But you keep that corridor of action packed right to the end. And it could be like a John Woo movie. And I think that's a better experience than aimlessly roaming around an environment with your 9mm looking for trouble.
00:41:50
Speaker
I want to take a step back, if you don't mind. If you still had to go acquire companies and you were with PlayStation, you made some great acquisitions over time and you said some things you'd be looking for. Teams that work together, deliver together, put out a product, right?
00:42:03
Speaker
It doesn't even have to be super successful, right? The the teams have to mesh and gel, right? um What other KPIs or data would you be looking at from these studios when you might be looking to acquire them or is that an out there question?
00:42:20
Speaker
No, it's not out there question. And it's a question that you ask 10 people, you get 10 answers. it's It's really difficult. It's like, how do you go out and find the Rolling Stones? You just have to go to a lot of nightclubs and listen to lot of bands.
00:42:34
Speaker
ah I think the good teams that you know we've worked with, it's always nice to be able to do a gig before you you know try before you buy. like Even with Sucker Punch or Insomniac or with Naughty Dog, we did what we call like external development deals.
00:42:51
Speaker
We contracted for hire, we made this you know ah royalty payment, build out all that. Then after doing that a couple of times to great success, then Sony would acquire that studio. Naughty Dog was an early acquisition, so was so a Sucker Punch. Insomniac was you know the last acquisition I was involved in.
00:43:09
Speaker
And like I've said in other places, it took me 20 years to get Ted to put a ring on it. But then we brought him inside the house. so ah yeah, you look for the the cohesiveness, the dynamic, the ability to take instruction, um the ability to answer questions just forthrightly and and not furtively, ah the ability to to keep to a schedule, keep to a budget.
00:43:34
Speaker
Even if it's a one milestone schedule over a very small slice of the budget, can you execute against those kind of small markers? Because over time, that becomes your statement of work. That becomes your body of work.
00:43:48
Speaker
that, no, I haven't had Grand Theft Auto success or I haven't had Fortnite success, but I had to deliver against these milestones. We succeeded in those deliveries.
Publishing Model Challenges
00:43:59
Speaker
Games were pretty good.
00:44:01
Speaker
I think that's an excellent place to start. Sounds like trust. You need to trust them. Yeah, because it can you can't be there 24-7. Kind of a flip side of that. We talked about publishing, and you've talked about it with Destin quite a bit. mean Everyone's been talking about recently, right? The publishing model is broken. I think it's known. And you called out Ben Cavallo from from Midwest Games, right? He's trying some things like Shadow Publishing, some other things out there, right?
00:44:26
Speaker
Again, no answer here, right? But what can help change the publishing game? what what What would be a magic bullet that that can at least start those conversations, right? Is it just controlled by too many or too few companies that there's no innovation there?
00:44:44
Speaker
I think there's at least two different dimensions that the answer is going to be found in. One is um the old model doesn't work anymore.
00:44:55
Speaker
The old model where you're a developer, I'm a platformer publisher, and I think you've got a great game. I'm going to give you all your dev costs. I'm going to own your IP and I'm going to put out in the world and we're going to market it. and It's going to hit some success metrics, hopefully, and you'll get some profit sharing out of that.
00:45:13
Speaker
But we decided 70, 30 was the way to go because I've got to handle all these costs. I've got to get a compact disc printed. I got to put it in a plastic case. I got to get on a truck. I got to get it to Best Buy, Target, whatever. That was the old model.
00:45:26
Speaker
In the new model, your publisher slots you in a digital store, pretty much. And so you wonder about the equities of like a 70-30 split when the real lean-in that the publisher's giving you is not it's not like it was when you had to print discs and buy trucks and put posters in the window at GameStop.
00:45:46
Speaker
So those realities have changed, but the underlying fundamentals of the business model haven't changed. So I think there's a disconnect there. I think there is also, it's the time of the season. There was a time, right, when movie studios had carpenters and electricians and light guys and, you know, script people on the lot all the time, even if a movie wasn't in production, just a burn rate.
00:46:14
Speaker
And then over time, the movie studio said, you know, holding that all you know in stasis, That's a lot of non-performing assets we hold for a while until they have to get into action. So they started busting it out until you just buy those pieces as you need them, bring them on the team.
00:46:28
Speaker
That's why every movie is its own company. I didn't know that until about 10 years ago. They said, so-and-so, MGM has 400 companies. How the hell do they have 400 companies? Because every movie is a company. Because you come together for that action, you execute it, everyone has their contracts, you separate, payments are made, there you go.
00:46:46
Speaker
So I think we have to find out how that model works in gaming.
Encouraging Diversity in Gaming
00:46:50
Speaker
Only the big publishers can afford to have, you know, 150, 200 person studio that after they ship their game, they can all just like hang out for a while until the next game gets ready.
00:47:01
Speaker
that That burn rate's too big to achieve anymore. So. I think we have to find out a different way to manage that stack. How do we bring teams together modularly? you know Here's game design, and now we need to bring on some programming asset. And here we go, let's talk about what the music is going to be.
00:47:16
Speaker
And then as completions, things get done, those people can break off and go do something else for somebody else. It's like everyone's a contractor kind of world.
00:47:27
Speaker
um I think that's where we're moving towards. Now, that's really hard to do at super scale. Okay, everyone's a contractor and there's 2,000 people on the project. That's wild. um So if you're going to try to move into that model, I think you have to start with a more modest game proposition and really learn how that can work because then you learn all the things that cause friction with the people on the team and how maybe people prefer having a salary and they don't want equity or people just want only equity and no salary.
00:47:55
Speaker
We have to start... trying all of these new dimensions um to help people's projects get to market. And that's what I think the next two or three years is going super interesting.
00:48:07
Speaker
Yeah, it's fascinating. I think, you know, I need to think and really cook in what you were just saying, It makes a lot of sense. I'm trying to think like, it's now about the tool set the publisher can offer, right? How do I get a piece of these tools so I don't have to go out and buy them on my own whatever. I'm just trying to think out loud it And then we talked to a lot of indies and this is where we can bring in girls to make games. Like how do we enable more of these people to create games? How do we say, Hey, you know what?
00:48:33
Speaker
The triple A's are making games. lot of indies are out there, right? how How do we get tools into new people's hands to build these new projects? How do we help enable them? And I think there's, There's a thing going on here, right? Indies are going start to eat themselves up, right? It's just there's only so much time in the day for a game, right? So how do we make sure that the right people are making the right games that stand out? and How do we provide them the tools and offerings out there that maybe they can't afford? and I don't know if there's an answer here, but but I'd love to learn more about kind of how Girls With Games operates. And then that might be the worst segue ever, but...
00:49:06
Speaker
Here we are. but thank Torture as though it may be. Thank you thank you for the ah the linkage there. No, I love it I really do. I think it's a great project. I think it's something, i mean, women in games, girls make games. and Diversity is important, no matter how you look at it.
00:49:20
Speaker
Oh, completely. And I think that's, we always say, or I always say anyway, that to get more people playing games, we need to get more people making games. And those people making games have to look different from the people who make the games today.
00:49:36
Speaker
We can't feed the world with games based on the same demographic that has been doing the game business for 30, 40 years. So Girls Make Games was an initiative began 10 years, 10 years ago or so by a woman named Layla Shabir.
00:49:50
Speaker
And her premise was, let's build boot camps, bring 30 or 40 young women between the ages of eight and 16 to come together in 30 days, work on a game project and get to a demo.
Universal Gaming Format Debate
00:50:01
Speaker
get to a demo in 30 days. And most of the games are written in Unity, so they have some proficiency around that. um And it's fascinating because they have to come with a game idea.
00:50:12
Speaker
They have to assign, okay, you're in the art team, you're the audio team. They have to make all the decisions themselves. Of course, we have backup from people in the studio would come and try to show them best practices. But it just unlocked a whole bunch of game ideas no one in my studios would have ever thought of.
00:50:29
Speaker
um Because you have to be a 12-year-old young person to find to find the attraction that. They were really good. Really a lot of social themes, you know, a lot of environmental themes.
00:50:41
Speaker
um I don't know if those would be commercially viable per se, but I like the expansion of of ah viewpoint, of perspective. You know, elements they learn in creating those games will help them make other games later.
00:50:54
Speaker
So that's what we need to do. And so for the market to get more people playing, need people will make it. And to get more people playing, know, ultimately I would like the game, the game industry or the game machines to have the same penetration rate as television sets do.
00:51:12
Speaker
So how do you get there? One thing, I don't think you get there by only having three manufacturers. I mean, in my idealized dream, There's someday going to be just like there's a Blu-ray format and an MP3 format or an MPEG format or all these different formats that are agreed by a consortium of industries.
00:51:31
Speaker
We need something similar in lines of a game format. Like this will be the game OS, the architecture in the current version of PlayStation, the architects and current version of Xbox and of high end PCs are all quite close now.
00:51:44
Speaker
They're all very similar and any changes or any enhancements to that. you know like we like to say in the studios, only the dog can hear that. you know well We're going to have 20% more ray tracing.
00:51:57
Speaker
Okay. I'm not sure what that did, but okay. So if we're just making those changes around the edges, ah think that means we have a pretty good core game format OS if the players could agree to come together and then license that out just like we do with Blu-ray, just like do with Compact Disc and let people kind compete on content Because I want more boxes out there. I want Bang & Olofsson to have a $2,000 game box of some kind with this crazy you know technology behind it.
00:52:28
Speaker
And I want someone like a Hitachi to have a nice priced family game box. All providing the same format. But maybe you know not always 120 hertz on one machine.
00:52:39
Speaker
Or maybe on this machine you get, I don't know, more ray tracing. But in order to break through, to take gaming from not just being the most financially lucrative entertainment in the world at 250 billion dollars worldwide but make it also the most socially impactful entertainment in the world we like to say you go into a bar and ask someone what their favorite song is you'll get 100 return on that question if you ask them go a bar and ask your favorite movie you should get 90 return on that question if you ask people the room what their favorite video game is i don't know 50 depending on what city depending on what bar
00:53:18
Speaker
So if we don't get out of this, these are two companies that build the two formats that all the games are played against. Oh, three companies, whatever. Yeah. I don't know how we grow.
00:53:31
Speaker
That's a fascinating point. And we touched on this last time, I'm going to go back to kind of the Switch 2. um And I'm going to start with Microsoft in mind, because I think Microsoft was selling the at least the Series S at a loss, right? It was a loss leader for Game Pass, a loss leader for their other stuff.
00:53:49
Speaker
um How much money do you think these consoles are pouring? I guess these companies are pouring into the console. Like, Is it still a loss leader for Sony? Is there a reason they wouldn't want a unified format? I mean, at the end of the day, people know they have the better first party games, right? So if they had more people playing a joint system, I think more people would buy these games.
00:54:07
Speaker
Obviously, they want more people on their own hardware. But if you didn't have to make the investment into the hardware, do you save enough money where it's like, hey, this is an obviously it's easier. It's not that easy. Well, you'll you'll always make investment in the hardware.
00:54:20
Speaker
I mean, Sony's been making CD players since the beginning of time. They created the format together with Philips of the Netherlands. So they just wanted to be in there. The idea being that since we created the format, we can just be better than other people at the format.
00:54:35
Speaker
um But Sony never licensed the Trinitron technology anybody. And they had huge success with that. Everyone wanted a Trinitron TV. You couldn't buy that from anybody else. It's kind of, you know, technology exclusivity.
00:54:47
Speaker
And they took that same attitude towards, and we'll make Betamax. And we won't license that to anybody else. And we'll keep that exclusive to us. And then VHS came out and said, hey, you want a VHS license?
00:54:58
Speaker
Line up right over here. And so they beat Betamax just by volume of hardware in the marketplace. And I think the fact that VHS was selected by the pornography and industry as being the tape line. That's really what drives these companies, right? I tell you.
00:55:12
Speaker
i tell you. Yeah. So it's difficult for a market leader. to surrender you know the monopoly almost of their business with the idea being there's more there's more software advantage in the long-term game.
00:55:29
Speaker
you know If I'm just contained to my 140 million PlayStation machines versus hundreds of millions of game machines in the world, you know my view is take the leap and the bridge will appear.
00:55:45
Speaker
But it's it's easy for me to say now. Well, it almost sounds like Microsoft is has heard that, right? Because their thing is like games everywhere. Now, you could say from a position of non-leadership in console and other parts of the gaming industry, that makes sense. Because anybody with all the game platforms they have, if they can put their the their first-party game studios you know on all these platforms...
00:56:11
Speaker
it's actually good for them in the long run, right? And they want to drive up you know hours of use on mobile and PC and console, whatever they can. But maybe I misunderstood what you meant there, Sean, but it almost seems like Microsoft has taken your lesson to heart and they do want their games everywhere they could possibly go So are they a good example of where you think this is all going or is there something in there that ah yeah that you um you know you see as as distinct that Microsoft has done that isn't aligned with what your vision is?
00:56:42
Speaker
I think Microsoft has just said they're a multi multi-platform publisher. That's essentially what that is. It's not trying to grow the number of target platforms. It's saying all the target platforms out there will find a way to get on it.
00:56:55
Speaker
But having a consortium of the willing to come together and put all their hardware specs into a, like a Blu-ray license kind of thing is two orders of magnitude more impactful than whatever Microsoft's doing.
00:57:09
Speaker
but But, but my, my dream is harder to realize.
00:57:14
Speaker
Right. Well, you got to have a vision. got to have a, some, some you want to strive for imagine, imagine seeing you mentioned Layla Shabir. Um, and it reminded me that Carter Lipscomb was somebody who passed recently, who you were quite close to my understanding is, and i never had the good fortune of meeting the man, but I understand he was, ah you know, quite a personality. And, um, I thought if you're interested in it, um,
00:57:40
Speaker
Maybe you can give us a few minutes on what he meant to you or what his legacy will be, because it does sound like he did have a ah large impact on the gaming industry overall. Yes, Carter, his he traces back his history in gaming to either his Microprose or Spectrum Holobyte something like that way back in the day.
00:58:00
Speaker
And he came up through the industry. He joined Sony um a while back. And then I came back to America back in 2010. And that's when I got to work with Carter more directly. He was a part of the, you know, at the time, Sony Computer Entertainment America.
00:58:15
Speaker
And he was a liaison with third parties. and And that was the perfect job for Carter. um He's the one person in the gaming community that I could say unequivocally has no enemies.
00:58:27
Speaker
Everybody liked meeting Carter. He made everyone feel important and special. And his focus on you when he was talking with you, you know, he wasn't listening to anything else in the room.
00:58:40
Speaker
He had that captivation that I think is so important, certainly when you're trying to create relationships with, you know, frenemies, right? Everyone in the game industry is a frenemy. And Carter was the ah the best glue to hold it all together. And he was taken from us way too soon.
00:58:55
Speaker
um it it's It was very sad. still remains to be sad for all of us. ah He'll always be remembered fondly. People, we still talk about Carter. And I think we always will.
00:59:06
Speaker
He showed us... he's He was the constant member of when the gaming industry was fun. Not that it's not fun now, but it was a different kind of fun back about 15, 20 years ago. and Carter is always good for that and leaves a lot of friends behind. And we just hope to do right by his legacy.
00:59:28
Speaker
Maybe, uh, gaming in general was a bit more of an outsider going up against movies or other forms of entertainment and had this, this vision of what we could do and some moxie around it. Maybe I'm reading into it.
00:59:39
Speaker
I believe he called everybody brother uh, you know, Carter's brother. That's right. So that sounds like a good time that I missed out on. So, uh, you know, Godspeed, Carter.
00:59:51
Speaker
Godspeed, Carter. We will not see his like again, but, um, As we always say to each other, you know and if you have a choice, be Carter.
Leadership and Industry Reflections
01:00:00
Speaker
Lewis, you have any more questions? Around tariffs, I think that it could lead to a recession. i know we kind of talked about it and then we kind of got sidetracked into ah ah kind of adjacent topics. I don't know, Sean, if you... right i don't know. I don't want to put words in your mouth, but I have the feeling from GDC...
01:00:19
Speaker
that these costs will get passed on, which implies to me the prices will go up, which means demand will go down, which means that, you know, this is much bigger than just gaming. It is a potential impact on the U.S. economy. It could lead to a recession.
01:00:32
Speaker
So I don't want to put words in your mouth. And obviously... It could potentially put you in light of fire who were, you know, whatever, people you know, you're against the tariffs, so you you get in a mess. So you can totally avoid it if you want to.
01:00:44
Speaker
But I don't think I heard from you, like even the yes ESA has said, you know, we regret this is happening. And there's very lawyerly words about it, but they're not, they're clear that this is bad for the companies in this industry. So I will give you one more chance if you're interested.
01:00:58
Speaker
Yeah, I'll take it. a clear statement on what you think if these stay in place, what is the likely impact? And obviously it's going to hardware leaning impact, but on the gaming industry, what's what, what do you suspect is going to happen? And if you want, want to branch out to the U S economy, take, take the, a tariffs are a bad idea.
01:01:16
Speaker
And yes, they've been used in the past, typically in a more surgical manner. You look at one industry in one country and one trade problem there. You don't just blanket the world and put a 10% tariff on the Pitcairn Islands.
01:01:28
Speaker
What? They just only sell potion stamps, these you know, those islanders. um So you've done that, which means it's not thought through, which means everybody being affected by it remains rather uncertain.
01:01:40
Speaker
What's the meaning of this? We don't understand why it's happening. We see what's happening. We don't know where it's going. And that's kind of the phase we're in right now. I haven't seen tariffs like this in my lifetime because I'm not quite yet 100 years old.
01:01:51
Speaker
But um I do recall we had... Similar pressures during the times when we had great swings in exchange rates between the yen and the dollar.
01:02:02
Speaker
And, you know, being a multinational, you're trading in all currencies at the same time. And some some products are based in one currency and then you're trying to ladder that up. And so they were a couple of times we had to raise prices just based on currency fluctuations.
01:02:16
Speaker
Those are never fun. That never increases your market share. That doesn't make your players happy. But at some point, you you try to eat it as far as you can, and then you just have to move against it. With tariffs, because they seem like a cudgel rather than a scalpel, I don't know if companies are going to be able to finesse around the first six to eight weeks to see how much we can absorb of this. If they think this is going to be the roadmap going forward, they're going to probably move pretty fast on adding those on.
01:02:43
Speaker
i I don't think most manufacturers can eat it. That's 20%. That's way too much. And now there's 40% tariffs on Vietnam where a lot of this stuff gets made.
01:02:54
Speaker
So it's really complicated. I think the whole video game problem or challenge will be you know way in the shadows of the bigger the bigger problems that lie ahead.
01:03:06
Speaker
I agree that it's recessionary, but I'm not an economist, but every economist I read says is going to be recessionary. I've seen the market play out the last couple of days. That's not good. And sadly, with prices go up, like you said, fewer people are buying. If fewer people are buying, it's harder for the creators of the games. I don't know if there's a tariff coordinate on the game thing per se, but you know, I don't think so. I don't think software is affected directly from what I can gather, but it's gotta be manufactured there and then shipped to the United States. So I don't think at least digital is not impacted.
01:03:34
Speaker
It shouldn't be, but the hardware is. And so expanding that footprint gets more challenging. And then in general, if everything else in the person's life has got more expensive, it's not just eggs anymore, right? It's going to be, you know, toasters are 20% more expensive and clothing and whatnot.
01:03:52
Speaker
That's going to tell people my disposable income is now shrinking. And sadly to say, number one luxury item in someone's disposable income is video games.
01:04:04
Speaker
Much as I think it's, you know, video games is life. It really isn't. So, I think this will make people to economize on their purchase of entertainment and, oh God, that's just such a negative spiral.
01:04:16
Speaker
Well, for like free to play games, I know that a Roblox has massive user volumes and they have, you know, 173 million now, I'm probably getting the number completely wrong, but a huge number of players.
01:04:29
Speaker
But there are also more than half them are um under 13 or something, and they just don't spend. So this is this was true at GDC also ah with Quest. They were saying that they've had a new influx of teenage users of Quest 3 and 3S headset users,
01:04:44
Speaker
And they just don't spend. So they may put their time in. But I guess the flip side of the live service game model is if you go into a recession, it could follow that more people behave like teenagers without disposable income. They'll put in the time, but they won't necessarily spend the money. And that could that leaves you with high operating costs, but not as much income coming in the door as you had pre-recession. That's purely me spitballing.
01:05:11
Speaker
Yeah, then I guess you have to sell more advertising against it. Could see some more ads. Yeah. see some more ads. Yeah. It's no, no, not nothing good comes of this. I'll just come out and say it.
01:05:23
Speaker
Yeah. It's going to be a tough ride this year. I I'm predicting that's one of my predictions. Yeah. hate to leave it on a down note. Do you have any other, uh, uppers Greg to close on strong closes as they say. Strong close. No. Well, one thing that we do typically on the podcast, and this was a different one, just based on what it was, is I would love to know back when you were leading Sony,
01:05:43
Speaker
right? And you were in charge. What skill sets, like everyone's thinking you have the coolest job, you're running PlayStation here, right? Like what skill sets do you do utilize on a day-to-day basis? So are you guessing not an engineer, right? But like if you were to go to school, what do you go to school with to learn how to do that?
01:06:01
Speaker
I didn't learn any of this at school. I think what was the most effective in my life was I started my career at Sony in Japan 1987, uh, ah There's a completely different work ethic, the Japanese business of the eighties and nineties. It was crazy, you know, working 14, 15 hours a day.
01:06:21
Speaker
Then I was the assistant to Akio Morita, the founder of Sony for five years. And that was kind of my deep dive into what his management looked like. And what I learned is management managers really about walking around.
01:06:34
Speaker
It's about going and seeing all the members of your team, just walk, walk through the finance department, walk development department. And when you go up to people, instead of asking, what are you doing? Which always sounds like kind of a pushy question.
01:06:46
Speaker
I just walk to people say, what can I help you with? There's something I can do that makes you successful. You know, let me know. I can make a phone call. Don't ask me for too much money, but there's, you know, we could solve for those things too.
01:06:58
Speaker
But just giving people a place for their ideas to be heard. Everyone wants to participate in the company and its goals. You know, they're followers, they're leaders. We all know that. But everybody wants to be a part of it.
01:07:10
Speaker
So as a leader, I think it's incumbent on you to make sure that everyone feels that they're part of the journey, that they're just not in the baggage department being carried along, that they have something to offer. I love it. what if i forward At the end of the day, it's the human element that ties us all together. It will help us become better people. And I think we'll let us all kind of excel to that next level. if you're If you're a good person, you're willing to help people. I think that's the most important thing out there.
Conclusion and Final Thoughts
01:07:34
Speaker
Well, Sean, Lewis, thank you both so much. This was such a fun episode. I've learned so much. Sean, before you go, anything you want to plug talk about? Again, Girls Make Game Scholarship Fund.
01:07:46
Speaker
We're getting ready to pick three more candidates to finance part of their college education ah in the fall. So gmgsf.com or.org. Go check out everybody and see if you can help us with our mission.
01:07:59
Speaker
Awesome. we will We will post it in our show notes. We'll talk about it. You'll have it there. Again, Sean, thank you. Lewis, as always, thank you. I think I'm going to talk to you again Monday. We'll figure this out. But thank you, gentlemen. I hope you both have a great rest of your day.
01:08:11
Speaker
Thanks, Greg. Thanks, Greg.