Shawn Layden interview

[the-pi-guy]

Shawn Layden: Consolidation is the enemy of diversity | GamesIndustry.biz

Consolidation:

"During that time we have also seen more consolidation. Consolidation is the enemy of diversity in some ways. It takes a lot of playing pieces off the table as they grow into these larger conglomerates. And again, we end up with this problem with diversity.

"Music on a revenue basis is probably one fifth of the games space. But their cultural impact is 100x what gaming is. Right now, we are narrowing ourselves down into genres and sequels and certain types of games. Favourites like my own, like Parappa and Vib-Ribbon, those things don't seem to get a chance to come out on stage. That's bad for the industry and for fans. Over time, that leads to a crumbling of the games industry if we just keep talking to the same people and telling the same stories in the same way.

Gamepass:

"It's very hard to launch a $120m game on a subscription service charging $9.99 a month. You pencil it out, you're going to have to have 500 million subscribers before you start to recoup your investment. That's why right now you need to take a loss-leading position to try to grow that base. But still, if you have only 250 million consoles out there, you're not going to get to half a billion subscribers. So how do you circle that square? Nobody has figured that out yet."

[kitler53]

Shawn Layden: Consolidation is the enemy of diversity | GamesIndustry.biz

Consolidation:

Gamepass:

on gamepass

1. you don't make $120 million dollar games
2. you don't launch games every month
3. GaaS the fudge out of the game.
4. still do not make money...

 

=== Edit ===
also, how does he get to 500 million subscribers?

$120,000,000 = $9.99 subscriber per month = ~12 million subscribers to "recoup your investment"...

[Legend]

on gamepass

1. you don't make $120 million dollar games
2. you don't launch games every month
3. GaaS the fudge out of the game.
4. still do not make money...

 

=== Edit ===
also, how does he get to 500 million subscribers?

$120,000,000 = $9.99 subscriber per month = ~12 million subscribers to "recoup your investment"...

$9.99 a month * 12 * 500,000,000 = $60 billion a year.

PC+console software seems to make around $60 billion a year at minimum. SuperData: Games grew 12% to $139.9 billion in 2020 amid pandemic | VentureBeat (just a general link showing what I think Shawn was going for)

[the-pi-guy]

also, how does he get to 500 million subscribers?

$120,000,000 = $9.99 subscriber per month = ~12 million subscribers to "recoup your investment"...

He may have misspoke.

Or he may have been talking more about the general difficulty of keeping that kind of subscriber base.  You have to keep spending to keep the user base invested with a large diversity of content.

You don't just put out one $120 million game and call it a day. You have to put out a handful every year with a host of other content.  

It's quite a bit higher but it's in the same order of magnitude as your post a while back:

i mean, the numbers are easy to estimate.  I posted them in another thread but here they are again:



a subscription service as MS is pitching it (AAA game releasing day 1 on gamepass) is a massive money pit if you have 10 million subscribers and a massive money maker if you have 200 million subscribers.  MS needs to hit around 100 million subscribers (imo) to start being profitable.   to get to 100 million subscribers you need a few things:
- games need to be cross platform (console(s), PC, mobile, toasters)
- games need to be cross gen (nothing locked to high end hardware)
- games need to be released frequently (10 games a month minimum to keep people subscribed all year long instead of just 1 month out of a year)

so the top 2 points makes clear their commitment to PC and xbox one and a lack of next gen exclusives
the bottom point makes clear the massive amount of acquisitions because they need a lot more content

the math i put into that chart is very optimistic by the way,.. i gave gamepass credit for the full $15 even though that includes xbox live which is a subscription a majority of the xbox user base was already paying for.   it's not a subscription their PC base was paying for though so the real value of gamepass probably averages out to $10/month.

the math also improves if you release your software on competing platforms (steam, EGS, ps4, switch).  For those that will not buy into a subscription service any sales captured from unit sales reduces the cost of game development and lowers the amount of costs in providing content to the subscription service.   i'm not saying MS won't have any exclusives to their platform anymore but it's in their best interest to lure people to gamepass on "value" not exclusives for the short term or they are going to bleed money.  in the long term (once subscriptions are >50 million) exclusives will probably be required to move the needle to 200 million.

[BananaKing]

on gamepass

1. you don't make $120 million dollar games
2. you don't launch games every month
3. GaaS the fudge out of the game.
4. still do not make money...

 

=== Edit ===
also, how does he get to 500 million subscribers?

$120,000,000 = $9.99 subscriber per month = ~12 million subscribers to "recoup your investment"...

I dont think he is talking about one game. But a stable of first party software. Also I think that 500 subscribers was just to give an idea about the need to expand the subscription install base beyond the 240~ million gamers now.

I dont see how a 100 million subs can be profitable when you have 23 first party studios, and need to pay every other dev money to be on your service.