Shawn Layden, the former boss of PlayStation, has marked the games industry’s current development model for AAA games as unsustainable.
At the recent Gamelab Live, Layden referenced The Last of Us Part II, which he oversaw, by noting that the sequel took roughly double the development time of its predecessor while being almost twice as long. As the game gets lauded for its artistic and technical achievements, it’s also representative of a trend demanding AAA games to be bigger, better, and more costly. For example, the current generation has seen the cost of development reach between $80 to $150 million for the majority of AAA games, not counting marketings costs, and accompanied by a production period of up to five years.
As reported by Gamesindustry.biz, Layden states:
The problem with that model is it’s just not sustainable … I don’t think that, in the next generation, you can take those numbers and multiply them by two and think that you can grow. I think the industry as a whole needs to sit back and go, ‘Alright, what are we building? What’s the audience expectation? What is the best way to get our story across, and say what we need to say?’
It’s hard for every adventure game to shoot for the 50 to 60 hour gameplay milestone, because that’s gonna be so much more expensive to achieve. And in the end you may close some interesting creators and their stories out of the market if that’s the kind of threshold they have to meet… We have to reevaluate that.
As the industry progresses into the next generation, Layden believes it’s important to evaluate what we can continue to put into games, and subsequently, at what cost can we create those games.
But the most important reason why the AAA model is unsustainable, according to Layden, is not escalating costs or team sizes — instead, it’s that, no matter how big games become, the base price has remained the same. The consumer audience is also sensitive to the idea of it ever being higher than it is.
“It’s been $59.99 since I started in this business, but the cost of games have gone up ten times,” says Layden. “If you don’t have elasticity on the price-point, but you have huge volatility on the cost line, the model becomes more difficult. I think this generation is going to see those two imperatives collide.”
And it’s vital to know that all the costs involved in making games are ultimately labor costs. Games are made by people, and as these games demand more work, they naturally demand much — too much — from their workers.
“So how can we look at that and say: Is there another answer,” Layden asks. “Instead of spending five years making an 80-hour game, what does three years and a 15-hour game look like? What would be the cost around that? Is that a full-throated experience? Personally, as an older gamer… I would welcome a return to the 12 to 15 hour [AAA] game. I would finish more games, first of all, and just like a well-edited piece of literature or a movie, looking at the discipline around that could give us tighter, more compelling content. It’s something I’d like to see a return to in this business.”
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Perhaps a good place to start addressing the problem is by decreasing CEO bonuses so that development teams can expand and be compensated properly for their work. Just this month, an investment group that manages more than $250 billion worth of pension funds recommended that other Activision Blizzard stockholders vote against an upcoming raise for longtime CEO Bobby Kotick. The reason was that Kotick already makes too much money — over $20 million in combined stock/option equity per year, in fact.
The filing sent by CtW Investment Group to the Securities Exchange Commission, the federal agency that oversees stocks, goes on further to state, “These equity grants have consistently been larger than the total pay (the sum of base salary, annual bonus, and equity pay) of CEO peers at similar companies. Specifically, over the past four years, Kotick has received $96.5 million cumulatively in combined stock/option awards alone. In just 2019, he received over $28 million in combined equity, primarily consisting of options (over $20 million) that are substantially ‘in the money.’”
The report concludes by stating, “Kotick’s apparent failure to achieve more than half of the targeted performance strongly suggests that Activision Blizzard’s skewed approach to human capital management – lavishing multi-million dollar rewards on the CEO as employees face layoffs – needs to be addressed before it manifests in deeper operational problems.”