My goal is to get more people playing games. You got to tell me, why do I want to play this game? Why is it fun? There is a huge value to the brand of having strong exclusives. No game in the last 5 years has had the emotional hit on me like Last of Us 2.
I'm Naomi and this is Character Select, the show where I sit down with the most talented voices in gaming. Today I have the honor of being joined by Shawn Layden, former PlayStation executive and one of the key figures behind some of Sony's biggest eras, chatting about his journey and the lessons he's learned along the way, as well as his thoughts on where the industry is headed next. Hey Shawn, welcome to the show. It's so great to actually for the first time work with you.
Yes, I think we've only shared a table at dinners before. Was the last time that? Yes.
What have you been up to? What's life been like in your world?
Well, that's not a yes or no question.
Oh, I know. Those will definitely happen, but a little later on. I want to get to the meat of it.
Okay. Well, right now I'm in the sixth year of my retirement/non-retirement after leading Sony PlayStation for a long time. And now I'm working with my first love is my nonprofit. I work with Leila Shabir on Girls Make Game Scholarship Fund, getting scholarships for young women who want to study computer science at university level. And then a couple of startups. One's a social media platform for sports fans, which we'll be talking about more probably in January. I've got a music integration piece that's doing a lot of work helping people pull their own music into the gaming experience so you don't have to listen to that soundtrack for your favorite game.
I kind of love that. Yeah, I've always wanted something like that.
Another project we haven't announced yet is we're working on a TV show. A number of associates.
Uh, yeah, it's a TV show about the history of gaming.
But it's not a documentary.
It's scripted. When I pitch it, I say this is to video gaming what Mad Men was to advertising. Oh my gosh. Okay. I think that's perfect. I think gaming needs that.
Yeah. Because right now we have a lot of documentaries and flashback pieces and those are fun and educational. People should know about where this thing came from. Then you have like the Mythic Quest category of gaming, which I love that.
You know, someone told me to watch that and they said, 'You're going to love it. It's a great comedy.' And the first time I watched it, I went back and said, 'That's not a comedy. That's a documentary.' Because all those things really do happen.
Yeah. And then I've got a small project I'm putting together to create a new publishing platform for game developers and for indies. In fact, I'm flying to Abu Dhabi this weekend to go speak at a conference there called the Bridge Summit and we'll be talking a bit more about that and how I think that the current age of the video game business is coming to a close and a new age is dawning. And that new age is about bringing creators and their fans closer together. You know, we always talk about cut out the middleman. What could be more middleman than a game publisher or a music label or a movie studio or record label? These things all have to be rethought about what role they play and more importantly, how much money should they be able to take out of the transaction before the creator gets a piece. So, let's all try to redevelop that and rediscover it. I'll have some more announcements about that probably in the next 6 to 8 weeks. But if we can get some support on the financial side of things, I think it could be really exciting way we're going to change the publishing business for games.
Well, dang. So you're in retirement though.
Yeah, I'm retired. Exactly.
That's incredible. Well, I'll definitely keep an eye out for all that stuff that you're working on. Holy cow. Yeah, 26 gonna be a big year for us.
Amazing. That's amazing. I'm so excited to find out more. And yeah, you already shared a lot which is really cool. I want to go back a little bit and talk to you about what made you want to get into the industry in the first place and how you got started and if you were always kind of did you sense you were always poised for a leadership position in the space?
The working title for my autobiography is The Accidental CEO. Because that's how I really feel my career evolved that way. I joined Sony back in 1987 back in Tokyo and we didn't have the term at the time but if you describe it now I was a diversity hire. By a Japanese Sony Corp wanted to internationalize the company and they brought in about 40 non-Japanese into the corporation and I was lucky to get swept into that and I started my career doing press relations for Sony Corp in Tokyo and that turned into my job as secretary to the founder of Sony, Akio Morita. He needed a new speech writer. So, they grabbed me out of the group down there and I worked with him directly for 5 years, which is the equivalent of my MBA was to work with Akio Morita or work for Akio Morita actually. And sadly when he retired, I was looking for a new thing to do and we had just launched this company called Sony Computer Entertainment. And the president at the time, we were out one night and he asked me, 'So, what are you going to do now that your career trajectory is changing?' I said, 'I don't know. I'm not sure. I'm still thinking about it.' And the president at the time said to me, 'Why don't you join our new company, PlayStation, where we make PlayStation. Come in and work with us?' And I said, 'No,' I told him, 'That's great, but I don't know anything about video games.' And this is 1995. And he said, 'That's okay. We don't either. This is the perfect time to join.' Okay. Yeah. What am I going to do? You're going to be a game producer. I said, 'That's great. What does that mean?' You'll figure it out. Okay. And that's when it began. I won't say on a lark it was a considered choice but it was very seldom do any of us in our careers get a chance to be at 1.0 of something unless we build it ourselves obviously. But to be in a corporation of Sony size and to be behind a brand new initiative, the first new product they launched in years and a new sector, a sector which a lot of the executives at Sony were, shall we say, not enthused. They said Sony, we are not a toy company. We're not a Nintendo. We're not Sega. What are we doing this for? But, you know, Ken Kutaragi was not to be denied. And Sony Entertainment was started. PlayStation was launched and as they say the rest is history.
Wow. Quite the story. Quite the beginning. You were definitely thrown into the fire, I'd say. And did you have when you look back at that time, what was the experience like working at PlayStation? Did you feel pressure? Like what was the experience like?
It was like being dropped out of an airplane and reading a piece of paper that says how to construct your parachute, building as you go, falling through the sky. What was best about it is that we didn't know what we didn't know and it was an exciting time. It was freewheeling. It was wild wild west. I think the best strategic decision that the company made at its outset was that it created the company Sony Computer Entertainment as a joint venture between Sony Electronics and Sony Music, the record company. Because Kutaragi came from the electronic side and he and his cohort had enough common sense to know that even though they can make this incredible optical disc reading device for games, they don't know anything about games. And the closest thing we had to that was our cousins in the music business. And so half the company was from music. The typical hardware, R&D, IT, finance, HR, that was all from Sony Corp, the electronic side. But things like sales and marketing and advertising and publisher relations, those were all music guys. And it was their ability to do A&R, you know, in the music industry, find new bands. They took that same energy with all the game developers in Japan to convince them to come on to the platform. You know, there's the story about how many nights did they go out drinking with the guys from Squaresoft to get them to bring Final Fantasy 7 to PlayStation, right? The biggest early coup for us, you know, that really gave us credibility. We got FF7. And that's the music guys using their tried-and-true tactics and ways to convince people to sign on the other line. And also we just it changed the face of advertising. Game advertising up to that time was very typical. Here's a bit of the gameplay. Here's how it costs and here's some happy kid with a controller playing a game. The Sony music guys just completely blew up the whole concept of what advertising for games are like because they wanted to market the platform and market the developers and the games as you would a rock band. Get excitement for the band, get people to know about the band, get them to understand what they're doing, where they're coming from. These weren't PlayStation games, per se, but these were Naughty Dog games. These were Bandai games. These were Koei games. We wanted to really make the creators the stars. And that way fans have more attachment as we see today, fast forward 30 years. But we were doing it first in gaming and it really changed the perception that gaming held in society.
Yeah, it really did. I mean we've got all sorts of dev rock stars nowadays.
Yeah, we're looking at you, Kojima.
That's right. Yeah, I was maybe thinking about him. So, was there ever a moment you felt like you really helped just you personally? Something that you did that helped change the trajectory of the brand. And then I'd really like to know if there was like a game that you were just really proud of launching or was like your favorite game that you launched.
Well, I love all my children equally. And I don't think there's any one particular thing I ever did. It was always a team effort. We all get there together. Certainly when you're in the game development business, you know that one person can't lift that on their own. It takes a lot of people to get there. What I tried to do when I was running the studios, I saw my job as the chairman of the studios as being my job is to move obstacles out of the road, boulders, fill potholes, make sure that there's a clean runway for the teams to realize their vision, their dream. My job is to get the money to help them achieve the vision. We also had an idea in the studios at the time that we would judge any game we're going to do on one of three criteria. Either it was first of its kind or the best in class or it was a must build. This one's easiest to explain. A must build means if Sony's going to make a PlayStation Portable, we've got to make games for it. Now, as a third party, you don't necessarily take that risk because you're not invested in the hardware. You don't have to make the hardware work. The early titles that ship with a new piece of hardware, whether it's like VR or VA or PSP, that kind of thing. The install base is so small, it's hard to turn a profit on unit sales at the beginning. But as the platform holder, it's our obligation to do that. And so, we'd make games for that category. Best category means if someone came up with a plan for the third best racing game in the world, I wouldn't greenlight it. Like, we're going to make a racing game. We're going to make Gran Turismo. That's what we're going to make. The best one. And we're going to make an action adventure game. It's going to be Uncharted or it's going to be God of War. You have to kind of swing for the fences when you go for best. First is the innovation category. First is saying, 'Okay, I have this idea. It's like a thin paper comic book dog that wraps and its name's Parappa.' And then you say, 'Yeah, sure. Why not?' Fantastic. Someone's gonna love that. So we created the genre of rhythm action gaming which hadn't existed until Parappa came out. Then a bunch of music games came out after that. So that's the kind of way we went around it. I'm really proud of the catalog we were able to put together, the breadth of the content, the different types of games we were able to do through our studios in America and Europe and in Asia. If you ask me what my one little story about a game I loved really hard and I had to kind of go behind people's back to make it happen was a game called Vib Ribbon which is on PlayStation one. It was also made by the guy who made Parappa, Matsuura-san, who was a Japanese musician who decided to make some games back in the 90s. Vib Ribbon was this spline black and white game where the idea was you put your music CD into your PlayStation after you loaded the XC and then based on that music the spine would change the shapes different. And some would get really hard, some would be super easy, but you manage your character, this little rabbit to jump across the environment. And so we made it in Japan. The Japanese market is game for anything. But I was in Europe at the time and I wanted to publish it in Europe and the marketing teams in Europe said, 'No, no, that's stupid. What a silly game. Black and white. It's not even 3D. Who's going to do this?' I said, 'Gosh, you guys, that's the point. The point is because it's so different. We have to do this.' So, I did what I'm not supposed to do. I took the disc to the current president of SCE Europe at the time, a guy named Chris Deering. I put him in the Chris office. Chris, you got to see this. And I put it in there. And Chris was like me, always trying to find something that was a bit unusual. And Chris said, 'That's amazing. We've got to publish this.' And I looked through the glass in his window and I saw the head of marketing looking at me and I just said, 'Sorry.' And yes, I didn't win any friends in the marketing department, but Chris got behind it and we were able to publish it in Europe anyway. That was my favorite story.
Oh, heck yeah. That's a good story. I love that. It also speaks to like you really do follow your passion. Like you follow when it comes to whatever it is you're working on, you're going to follow your heart and see if it works.
When I started as a producer back in Japan in the '90s, I went to America to go find games to bring to Japan, which is no easy feat because the Japanese games in the '90s were so much better than the American games. They had Final Fantasy 7 and America had Twisted Metal, doesn't quite match up. But I was going over there, I asked a guy named Mariamatsu-san, who was the vice chairman of PlayStation. He'd come from Sony Music. Very famous guy in Japan. Everyone in the music industry knows him. And I asked him one day, I said, 'Mariamatsu, I've got to go to America. I've got to find these games. What am I looking for? What should I be on the lookout for to make sure we get the right games or what would be promising or how am I going to do that?' And he took a long minute and then let out a sigh and said in Japanese 'ma, kana' and that translates into 'well, just got to go with your gut.' Well, thank you. That's not useful, but it's liberating somehow at the same time. Kind of gives you permission to use that part of your psyche and follow. That's why when I see people giving me pitches about games now because I see more pitches now than I ever did before. Through the miracle of Zoom I can do more take more pitches than anything else. But sometimes a pitch will start and they'll be this is the monetization and this is how we're going to capture the total addressable market and we have these incentives over here and I've had to stop some people and say hey hold no wait, what's the fun part? I'll assume you've done the economics about how to make money on the back end. But you got to tell me why do I want to play this game? Why is it fun? And I don't need to see about how you're going to put it in the store and what your subscription rate is going to be. Just what's the fun part? And I think there are some parts of our industry that are missing that are perhaps too focused on what the return is going to be and how we can engage the players over a long period of time and what's the total customer value of the proposition etc. I'm just kicking around still doing my own question which is where's the fun?
Yeah, find the fun. That's what they say. I was always curious to ask you this, because I've seen you do presentations many times at places like E3. Talk me through your experience of E3. Talk me through your experience of presenting. Is that something that makes you nervous? Do you like doing it?
Yeah, it makes me completely nervous. Even if I'm making a presentation to ask people to support my startups and things like that. When I go do panels, I always want to do the morning panel. I hate doing afternoon panels, not only because people are asleep, which is hard to work with, but I can't eat anything until I've done my presentation. So, if I'm presenting at 5:00 p.m., I don't eat until 5:00 p.m. until it's over. So, that's one of the things that makes it hard for me. If you're presenting about something you love, it's easier. When I did my first E3 was in 2014. I'd only been president for about 3 months and so Andy was there and Adam was there and she was there and they all did bases of it and the new president I came on in 2014 and they gave me the network engagement numbers and it was like oh god it's like that old Life cereal commercial you know give it to Mikey. Mikey eats anything. So there I was talking about network numbers and my colleague said to me, 'Whatever you do tonight, Shawn, don't read the internet.' I said, 'Okay, that's good advice.' Of course, the next morning I'm writing to Reddit, right into NeoGAF. And everybody hated my presentation. Oh no. Big mistake. I've made that mistake one too many times. Don't read the internet. Feel free to answer this or not. But in your opinion, what do you think happened to E3? What was the reason for its downfall? Would you say based on your perspective?
It didn't know what it wanted to be. I was on the board of the Entertainment Software Association, which were the shepherds of E3. And it had been a trade show when it started in 1995. Broke off from CES. Had done that for a couple of years and created their own thing in '95 for the game industry and that was needed. That was right and good. When I went to my first E3 in '96, you'd see people who say, 'My name's Carl. I work for Sears. I buy Hot Wheels, Barbie, and VHS and video games. What do I need to know?' And so you had dealers and buyers from retail coming in who really had no idea what they were supposed to buy. So a trade show is important. That's where you take them by the hand and say, 'Hey Carl, let me show you this thing called Jet Moto. This is why it's super cool.' Also you had journalists there because in '95 this is still pre-internet. So people had magazines and you try to get the September cover of the magazine by impressing the journalists in June for E3 and you work with long form content on long deadlines and people didn't hear about game news 24/7 like they do today. So feeding the press, feeding retail, '95 to 2000, perfect. Once we got into the 2000s, the internet took off and there were game sites everywhere. So it was hard to keep anything a secret until E3. Everything leaked. At the same time, retailers became much more sophisticated about what they were buying. They didn't need me to tell them what to get. But for them, June was too late to do Christmas business. Retailers had to start buying for Christmas in February. So we had different retailer meetings in January, February just at a corporate level. But by the time E3 came around, retailers who came were just trying to check on progress. Is that thing we bought still on track? So it lost its purpose in that and then it looked at being a consumer show and it tried to do that for the last two years of its gasping life to have a consumer day. And that was a fight that I had with the ESA at the time saying, 'Pick a lane, people. The way you design a consumer show is different than the way you design a trade show.' I know this because I did our booth at Tokyo Game Show when I was president in Japan, and that's a consumer show. So, you build it in a way that people can go from Capcom, go to Konami, go to Sony, and it's built for throughput, right? But when you're doing a trade show, alternatively, it's more like IKEA. When you go to IKEA, when you get in, you don't know how to get out. It's a trap. And that's what booths are at a trade show. They're supposed to be traps. I don't want you going over to see these other people. I want you to spend all your time with me. So, those two were in conflict. When the first time they had the consumer day for E3, what did they have like four-hour waits for people to get into the Nintendo booth? I remember it. The waits were horrible. And these are people who bought tickets. So that's even worse. So I think it just died because it didn't know what it wanted to be.
Do you think it could have been saved if it had switched to...
I think it could have been saved if it done two things. If it had number one move the venue out of Los Angeles. The hotel support is terrible. compared to, you know, Vegas even or...
Correct. Well, Vegas is purpose-built for conventions.
But the other place that we used for our PlayStation Experience, PSX, we did that for 5 years. The place you really enjoyed having that consumer show was at the Anaheim Convention Center because you get to leverage all the cheap hotels that are there for Disneyland. And it's all really close and there's ample parking and it's not an issue.
Chains of venue. Number two, put the organization of it into the hands of a professional events company.
I think ESA had probably held on too long. You're a trade association. You're not an events coordinator. I think their ability, they weren't best built to do that in the 21st century.
Do you think it would have potential to come back?
People have discussed that. I took a call one time from some people who wanted to say, 'Shawn, what if we put E3 in Saudi Arabia?' And I said, 'Okay. I won't be going, but please knock yourself out if you want to do that.' People are looking at that time in June. I know Keighley's taking over a lot of it with his Summer Games thing, and I think GamesBeat and Dean have something going on there. There's lots of little pockets of activity in what used to be that E3 window. Maybe that's enough. I'm not sure. I don't know if June is a great time. It's kind of an arbitrary time in space.
Yeah, I'd agree. I would say if they figure out a window, maybe at the end of the year or early in the year, winter fall.
Yeah, kind of like the GDC window somewhere in that space.
Totally. Yeah, I could see that. All right, let's talk consoles.
Yeah, because there's been a lot of changeover and I'm sure you've heard every time you get spoken to, people talk about this, but console exclusive games are not a thing anymore.
They're a thing, but do you think they're on their way out?
I don't think every game has to be console exclusive. I don't think every game should be console exclusive, but I do accept the fact that if you're going to have platform companies like Sony and like Nintendo largely, Microsoft is more of the Xbox everywhere anywhere. There is a huge value to the brand of having strong exclusives. You know, if Mario starts showing up on PlayStation, that's the apocalypse, right? Cats and dogs living together. So much concern if I ever saw that.
Right. And the same goes for Nathan Drake and Uncharted. I think they make the platform sing. And of course, the other thing with multiplatform that people got to realize is that when you code across multiple platforms, you do have to code to the lowest common denominator.
Right. But if you do exclusives, you can push every lever to 11 on that platform.
I think there will be some exclusive titles still in the future, but certainly if you're looking for a massively multiplayer game, then you almost have to go multi-console, multiplatform because you've got to rip that funnel open as wide as possible to get people in there. Certainly for free-to-play because you're only converting what, 3% of the users. So you don't want 3% of 20 million. You want 3% of 200 million.
That's right. Which brings me to my next question about development cycles with consoles.
For the hardware or for the software?
Yeah. Do you think that the industry will eventually head towards a different model than the five-plus years per console model? Are you sensing a change there?
I think the quick answer is no. I don't see a change in that. Probably the more developed answer is asking ourselves the question, how much longer do we live in a world of discrete consoles? Dedicated consoles. I mean, if you had to buy a Sony CD player to listen to Sony music, that would be crazy. But you do have to buy a PlayStation to play a Sony game. It's been a great model. That's the way Nintendo began, Sega began, Atari. It's the traditional gaming model, this vertical integration between having the silicon and the manufacturing and then the content and then the retail and all that. But over time, it just starts to creak.
I don't think we'll ever bust out of it. We talk about gaming as being this $250 billion industry, which it is, and having hundreds of millions of users, which it does. But of course that includes if you're playing Wordle, you're a gamer. If you're playing Candy Crush, you're a gamer in that number. But the number of discrete consoles sold over any particular generation caps out at about 250 million. If you line up all the PS1s, Sega Saturns, and N64s, and you go by generations, it's all about 250. The one time it popped to almost 300 was the generation that had the Wii, and people thought you could buy Wii Fit and lose weight, so we got some non-traditional gaming audience to buy into the gaming industry at that time. But that was an anomaly and we've still kind of flattened out. So we need to crack that cap, that barrier. And I think the only way we can do that is if, and I know people call me crazy and they throw stones at me when I say this, but Sony lost Betamax to VHS for one reason only: VHS licensed its format across many different manufacturers. Sony held the unique Betamax patent trademark and everything. There was a license we did with Toshiba towards the end of the life cycle, but it never went wide like VHS and people didn't understand the need of having the same machine as your neighbor. You could have an RCA TV and a Sony TV and that's all fine. But once your neighbor has picked VHS and you want to watch that tape of that movie but you have Betamax, all of a sudden... So the industry coalesced around VHS. Then later on Sony and Philips created the compact disc consortium. They created the patent and then they licensed it out to all the other manufacturers. Same thing happened with DVD. Same thing happened with Blu-ray. They said we'll compete on the device. So if you get a Bang & Olufsen Blu-ray player, it's going to cost you more than the Sony version, even though they'll both support the platform, but they'll have different bells and whistles. I think we need to get in a world where we have a gaming format. A format, and maybe it just comes from PC. Maybe we find a way just to do it all in a Linux kernel or something. And then we have a consortium around that. We have licensing programs which allow other manufacturers to build into that space, and then you can talk about real numbers moving. That's how you get to the ubiquity of the toaster.
But right now, I think we're kind of trapped in this containment field.
So consoles. Yeah, it takes a long time to build them, though. I don't know how much more ray tracing I can take. And if it's 200 frames per second, I'm not going to be seeing it anyway, right? So let's see what we can do to flatten that out. More interesting to me is how do we reduce the development time for games? Truly.
And that's the thing. If the consoles were coming out every four years, how would you ever build a game for it if it takes you six years to build your game? You never get to it.
No, you're always the target technology keeps moving away from you.
So we need to get back into the two, three-year cycle for games. I think we need to get to a place where games are double-digit millions to make, not triple-digit millions. I'd like to get games that are 20 to 25 hours of gameplay.
That's what I've been saying. Yep.
Exactly. Right. Because look at it. When we started gaming, well, I started much decades before you did, but the average age of the user is like 18 to 22. And in that bracket, you are time rich and money poor. But now as the average age of the gamer has gone up into the 30s, it's the opposite now. We may not be money rich, but we're definitely time poor.
Definitely. It's so true.
So let's realize that not everybody has 88 hours to play Red Dead Redemption 2.
Yep. Yeah, I totally agree with you. That's the thing I've been preaching on my podcast.
I'm keeping it up. That actually leads me to, I'd love to know what your take is on the new Steam Machine. I'm sure you've had a chance to look at that a little bit.
