Video game exclusivity is one of the hottest topics within the industry after recent moves by both Microsoft and Sony to release their first-party games on multiple, sometimes rival platforms. This, coupled with rising development costs and increasingly squeezed margins, has caused some to question whether the console exclusive has a future.
Speaking in an interview with VentureBeat, former president and CEO of Sony Interactive Entertainment America Shawn Layden said when a video game’s costs exceed $200 million, “exclusivity is your Achilles’ heel.”
“It reduces your addressable market,” Layden continued, before citing the success of Arrowhead’s Helldivers 2, which launched on PlayStation 5 and PC to explosive success. “Particularly when you’re in the world of live service gaming or free-to-play. Another platform is just another way of opening the funnel, getting more people in. In a free-to-play world, as we know, 95% of those people will never spend a nickel. The business is all about conversion. You have to improve your odds by cracking the funnel open. Helldivers 2 has shown that for PlayStation, coming out on PC at the same time. Again, you get that funnel wider. You get more people in.”
First-party development costs rise with the release of each generation of consoles, but costs have ballooned in recent years. Last month, Sony boss Hiroki Totoki offered what he called his “frank impressions” of the PlayStation business, suggesting its studios can do more to cut development costs. The release of data stolen from Sony-owned developer Insomniac late last year also revealed internal concern at the growing cost of the studio’s games. According to Kotaku's report on the breach, Spider-Man 2 development costs ran $30 million over the original $270 million budget, and ultimately needed to sell 7.2 million units to break even. The latest sales figures suggest Spider-Man 2 has now veered into profitable territory, although Sony has yet to confirm that itself.
Layden said single-player games have a similar audience consideration as multiplayer games, though not exactly the same. “For single-player games it’s not the same exigency,” he said. “But if you’re spending $250 million, you want to be able to sell it to as many people as possible, even if it’s just 10% more.”
Layden’s comments echo those of former Xbox boss Peter Moore, who in a recent interview with IGN suggested Microsoft will be debating internally whether to release Xbox poster-child Halo on PlayStation.
“If Microsoft says, wait, we're doing $250 million on our own platforms, but if we then took Halo as, let's call it a third-party, we could do a billion… You got to think long and hard about that, right?” Moore said. “I mean, you just got to go, yeah, should it be kept? It's a piece of intellectual property. It's bigger than just a game. And how do you leverage that? Those are the conversations that always happen with, how do you leverage it in everything that we would do?”
The video game console business is currently under increased scrutiny following mass layoffs and studio closures. Xbox boss Phil Spencer has explained Microsoft’s recent, devastating layoffs in terms of the industry's failure to grow the gaming audience beyond the traditional console install base. Layden said this was a factor in the ongoing struggle.
“The global installed base for consoles — if you go back to the PS1 and everything else stacked up there, wherever in time you look at it, the cumulative consoles out there never gets over 250 million,” he said. “It just doesn’t. The dollars have gone up over time. But I look at that and see that we’re just taking more money from the same people. That happened during the pandemic, which made a lot of companies overinvest. Look at our numbers going up! We have to chase that rocket!
“We’re not doing enough to get heretofore non-console people into console gaming. We’re not going to attract them by doing more of the shit we’re doing now. If 95% of the world doesn’t want to play Call of Duty, Fortnite, and Grand Theft Auto, is the industry just going to make more Call of Duty, Fortnite and Grand Theft Auto? That’s not going to get you anybody else.”
Again, these comments echo those from Moore, who said “the numbers don't lie” when it comes to the video game console business, adding that young people are less inclined to buy a console than older people.
For now, Microsoft has confirmed plans for four Xbox exclusives to hit rival consoles (Grounded, Sea of Thieves, Hi-Fi Rush, and Pentiment), but there are rumors the company is considering adding more. Sony has dipped its toe into multiplatform day-and-day releases, such as the aforementioned Helldivers 2’s launch on PS5 and PC, but it has yet to release its first-party games on Xbox or Nintendo Switch.
Image credit: Photo by Alberto E. Rodriguez/Getty Images
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
