The gaming industry is in danger: Companies like Google and Amazon threaten to turn it upside down. At least that’s what former PlayStation CEO Shaw Layden says.
What kind of threat is that? Former PlayStation CEO Shaw Layden explained at the keynote at the “GamesIndustry.biz Investment Summit” that companies like Google and Amazon are among the biggest threats to the gaming industry.
In his speech, Layden talks about his biggest concerns
- Consolidation can be an enemy of creativity. He refers to large acquisitions and a wave of studio closures in recent years.
- Rising costs in gaming are an “existential threat” to everyone.
- He refers to “non-endemic companies” like Google and Amazon, which want to penetrate the gaming industry, as “barbarians at the gates.”
Amazon made its way into the gaming industry with games like New World.
Everyone wants a piece of the gaming pie
What problem does Layden see? According to the former PlayStation CEO, companies that are not native to the gaming industry are buying into the sector and disturbing it: “Right now, all the big players are saying: ‘Oh, gaming? That’s making billions of dollars a year? I want a piece of that.'”
Layden points to other industries that have already taken this path: Music was irreparably damaged when Apple “convinced everyone that 99 cents per song was a good idea.” Netflix, on the other hand, disrupted the film industry, which had previously focused on box office visits.
However, the former CEO has hope: “I hope that gaming will be the first industry where we change. Where we won’t need Google or Amazon to completely turn the tables. We should be smart enough to see these changes coming and prepare for this eventuality.”
If we do that, it’s something different
Christopher Dring from GamesIndustry.biz pointed out that both the PlayStation and its rival Xbox were introduced by companies that were not native to the gaming industry. Although Layden admitted this, he noted that at least Sony was aware of its limitations.
PlayStation knew that we couldn’t do what Sega and Nintendo did and [provide the majority of the software]. We didn’t know enough to manufacture it. We had to be the third-party platform. […] So yes, we were not endemic, but I think we brought in the entertainment part, which really helped drive the success of PlayStation.
Layden added that this is not the first time outsiders have tried to establish themselves in the gaming industry. 25 years ago, it was film studios that thought, “We have IPs, there’s money in gaming, so let’s make games. How hard can it be?”
As it turned out, quite difficult, because the studios completely failed. 20 years later, the tech giants arrived and thought the same thing with their cloud infrastructure.
The first companies had to realize that it was not enough to just have the technology. This was something my colleague Jürgen Horn from MeinMMO had to find out, who had put €1,000 and all his hopes in Google Stadia.
