Shawn Layden and Mark Cerny: from Icarus moment to managing 3,000 devs

Shawn Layden and Mark Cerny deserve a lot of the credit for why Sony’s PlayStation 4 is sitting at the top of the console war. While the Nintendo Switch is giving them a run for their money now, it went on sale much later, and it is still making up for Nintendo’s failure with the Wii U. The PS4 has sold more than 80 million units, and it is beating Microsoft’s Xbox One family by two-to-one.

That success was years in the making. Cerny was the architect of the PS4, a leader among developers who took back control of the console business. And Cerny has also led the development of Knack and Knack 2, two games that were meant to show off the PS4’s capabilities.

[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":2368995,"post_type":"story","post_chan":"none","tags":"category-computers-electronics-consumer-electronics,category-games-computer-video-games","ai":false,"category":"none","all_categories":"business,games,","session":"D"}']

Layden is chairman of the worldwide studios for Sony’s first-party game development — or titles that are internally produced as exclusives for the PS4. He is in charge of 2,500 to 3,000 developers at 13 Sony-owned studios making titles, such as God of War.

Layden and Cerny talked about their experiences — from stopping games in mid-development to Sony’s Icarus moment with the PlayStation 3 — in a fireside chat at the recent Gamelab event in Barcelona. Here’s an edited transcript of the fireside chat.

Mark Cerny: Most of you think of Shawn, perhaps, as the guy who gets on stage at E3 in a Crash Bandicoot t-shirt and talks about the upcoming games. Of course, Shawn does that in his role of chairman at Worldwide Studios. Perhaps 2,000 or 3,000 developers work for Shawn. But there’s this other story that hasn’t been told.

Shawn’s been at Sony for more than 30 years. He has an incredibly diverse background, perhaps the most diverse background at PlayStation. He’s worked in Europe, the states, and Japan. He’s been on the business side, the game side, the network side. To jump right into it, what was your first role at Sony? When was that? That was another century, I think?

Shawn Layden: Yes, it was, the last century. I began my career at Sony in 1987. I went to their corporate headquarters, directly to Tokyo, because the only saleable skill I learned in college was to speak Japanese. I was able to get a job in Tokyo, working in corporate communications for Sony when the company was transforming itself from a consumer electronics company and breaking into the entertainment business.

Shortly after joining, the company bought CBS Records out of New York. About 12 months later, it bought Columbia Pictures, trying to create a synergistic program around creating audio and video equipment and also holding audio and video content. It was a great move by Sony. I think Sony is still now the only company that’s deeply invested in both entertainment and in electronics. I stayed there for probably — I was in the corporate gig until 1996. In 1996, I was friends with the guy who was president of Sony Computer Entertainment. He was looking to build up his teams, and he asked me to jump over and get into the video game business.

I told him truthfully at the time, “I’ve been in corporate for nine years. I don’t know anything about video games, other than that I play them.” He says, “That’s OK. Nobody knows anything here.” Sony was just starting out in the game business at the time, with the PlayStation.

Cerny: When you started out, I believe you were working directly with the co-founder of Sony. Is that right?

[aditude-amp id="medium1" targeting='{"env":"staging","page_type":"article","post_id":2368995,"post_type":"story","post_chan":"none","tags":"category-computers-electronics-consumer-electronics,category-games-computer-video-games","ai":false,"category":"none","all_categories":"business,games,","session":"D"}']

Layden: Right. I did the corporate communications gig for about three years, and then, we bought the record and the movie companies. The founder of Sony, a gentleman named Akio Morita, asked me to be his secretary. He has 14 secretaries, so it wasn’t that special. But yes, I did work for him as his speechwriter and his international aide. I spent five years going around the world with him. It was a fantastic experience. That put me in a position, then, when the video game opportunity came around — Mr. Morita had sadly fallen ill. He was no longer the CEO of Sony, and it was time to transition to something else.

PlayStation provided that opportunity. I joined in May 1996. I’d been at PlayStation for about five days, and my boss at the time came over and said to me, “Are you going to E3? You need to go to E3. I’ll take care of that.” I turned to my colleagues and had to ask them, “Hey, what’s E3?” “It’s this big show in Los Angeles.” “When is that?” “Next Monday.” “How do I get a plane ticket?” I had to do all these things in a matter of about 48 hours to get myself to the 1996 E3. That’s when my roller coaster ride through gaming began. It was a crazy time.

Cerny: Your challenge, if I understand it, was to sell to Western games in Japan. What could go wrong?

Layden: [Laughs] Those of [you] who are old enough, or who read history, [know] there’s a platform called the PlayStation. At that time, Japanese developers were just crushing it. Games like Tekken and Ridge Racer and of course Final Fantasy VII. I had the job, in Tokyo, of taking Western games and bringing them to the Japanese market. Trying to say, “Forget Tekken! You want Mortal Kombat! Forget Ridge Racer! You want Destruction Derby!” It was a hard slog.

[aditude-amp id="medium2" targeting='{"env":"staging","page_type":"article","post_id":2368995,"post_type":"story","post_chan":"none","tags":"category-computers-electronics-consumer-electronics,category-games-computer-video-games","ai":false,"category":"none","all_categories":"business,games,","session":"D"}']

I say this with no offense to my European and American counterparts who made those games and made a fortune in their own countries, but bringing them to Japan was impossible. Western games just could not catch on. Probably the biggest-selling Western game I was able to work on in Japan was Formula One. Japan has a huge Formula One fan base. But even that was only about 500,000 units.

Cerny: What everybody said was that no Western title could sell more than 200,000 units in Japan.

Layden: Most of my Western titles couldn’t sell 30,000 units in Japan. So yes, you’re right. Except the most successful Western title on the PlayStation — it came through our shop. It was immediately taken away from my international software group and pulled into the standard Japanese production group. This one little title called Crash Bandicoot. We wanted to do that on my team, but this guy named Shu Yoshida snatched it off our desk and took it into the standard domestic production house.

Even today, a lot of Japanese gamers think Crash is made in Japan. The localization job was incredible. Naughty Dog were fantastic developers. Of course, my colleague here Mark Cerny was deeply involved in the original Crash. That’s where we met. You came to Japan to pick up an award.

[aditude-amp id="medium3" targeting='{"env":"staging","page_type":"article","post_id":2368995,"post_type":"story","post_chan":"none","tags":"category-computers-electronics-consumer-electronics,category-games-computer-video-games","ai":false,"category":"none","all_categories":"business,games,","session":"D"}']

Cerny: Right! And we met Hideo Kojima at that awards ceremony.

Layden: All these roads come back to Crash. But like I say, we’re not old. We’re vintage. Put that in all your stories.

Cerny: Another challenge was QA. Japanese QA was so tough. Some titles from the U.S. and Europe simply could not be released.

Layden: Right. PlayStation and PlayStation 2, remember, these were not network-enabled platforms. There’s no patching your game. It had to be perfect, rock solid, when you shipped. Of course, as in all things that you might imagine, Japanese QA is more rigorous, more intensive, more pedantic than the rest of the world. There was one bug on the PS2 — if the disc would accidentally engage the drive and the drive door would open, you might have a cup of coffee sitting there and it would fall over?

[aditude-amp id="medium4" targeting='{"env":"staging","page_type":"article","post_id":2368995,"post_type":"story","post_chan":"none","tags":"category-computers-electronics-consumer-electronics,category-games-computer-video-games","ai":false,"category":"none","all_categories":"business,games,","session":"D"}']

Cerny: And that was a bug.

Layden: Yeah. But no, those were crazy times for PlayStation and PlayStation 2.

Cerny: Nobody necessarily looks at you and thinks, here’s a man who can speak Japanese. Was that more of a thing when you were working in Tokyo, more of a thing after you went to Europe, and you’d be in meetings and the Japanese were talking freely?

Layden: In Japan, it was an expectation. I was working in a Japanese company in Japan, and so, everyone speaks Japanese. It was assumed that you could keep up. But when I moved to London in 1999, we’d just completed the purchase of a famous U.K. developer called Psygnosis. I went to London to work with their dev teams on coming into the Sony fold, so to speak. In Europe, I did the opposite thing to what I did in Japan, trying to bring Japanese games to the European market. A lot easier, trust me.

[aditude-amp id="medium5" targeting='{"env":"staging","page_type":"article","post_id":2368995,"post_type":"story","post_chan":"none","tags":"category-computers-electronics-consumer-electronics,category-games-computer-video-games","ai":false,"category":"none","all_categories":"business,games,","session":"D"}']

But still, some of these deals were hard. I won’t name the developer, the publisher we were dealing with, but we were trying to negotiate a royalty deal for a game, trying to get the percentages right. The two gentlemen on the other side of the table whispered to each other in Japanese. The translation would be, “Tell them 27. We’ll take 25 but take 27.” And so, we finally got them down to 25. As I walked into the elevator and it closed, I gave them a nice Japanese thank you for all their time and trouble. But you can only pull that trick once. It became widely known.

Cerny: That was a great time in the ‘90s. All of these teams and people that are household names today were just getting in the business. Andy and Jason at Naughty Dog, I think you met them when they were seven people. I met them when they were just two people.

Layden: Back when games only cost a million dollars to make.

Cerny: Well, we were making incredibly expensive games for under $2 million. Or your first meeting with Sucker Punch, when they had their little cabin in the woods.

Layden: Yeah, those crazy Microsoft refugees who created Sucker Punch. They were out in the woods. You had to drive down past the old mill and turn down a road with no name.

Cerny: Microsoft wasn’t in the games business at the time. It was Microsoft Office that they’d worked on. They decided to escape and found a little game developer.

Layden: They had this game about a thieving raccoon, which we jumped on, and it became part of that.

Cerny: Or Insomniac, when it was just Ted Price and the Hastings brothers.

Layden: Spyro, that’s when you worked with them, right? When you discovered them.

Cerny: Yes, and Disruptor, the shooter.

Layden: And now they’re working on Spider-Man. You may have heard of that. Or you’ll be hearing about it.

Cerny: Guerrilla, when you started working with them, were they already Guerrilla? Were they Lost Boys? They were working on a title called Kent or….

Layden: They were working on a title called Kim. Very charismatic, the Guerrilla people. I say that because one of them is here. It was a great challenge, to see their potential. They had a fantastic first-person shooter called Kim. We couldn’t get that trademark, so it became Killzone.

Cerny: Or a couple boys in Guildford, Craftworld. Not just boys, of course.

Layden: This little shop in Guildford, spun out of Peter Molyneux’s empire or something out of EA. They were working on this thing called Craftworld, which had yarn and foam technology. They could render that. We saw that. Honestly, couldn’t figure out what the demo was, but it looked awesome, and the teams were very inspiring. We got behind that project, and then, Media Molecule turned that into LittleBigPlanet, which is known and loved around the world. And Dreams, their latest title, which they’re making progress on, continues in that tradition of giving tools to gamers to make their own games.

I’ve had a chance to meet all different teams. I had a chance to work with Sega closely when they gave up on the Dreamcast and moved over to PlayStation 2.

Cerny: Were you on the business side then?

Layden: I was still on the development side. But for them, we became their publisher in Europe. That was interesting, the secret meetings we had to have that discussion and work out that announcement. It’s been a crazy ride. I spent the first third of my career in Japan. Then, I spent nine years in London, and then, went back to Japan.

In 2007, I’d been in Europe for about eight-and-a-half years. When you’re an expatriate working for a company like Sony, you usually get three-to-five years for an assignment. They don’t want you to go native. After three years, you fall in love with a place like the East End of London. After five years, you think, “Yeah, it’s going really well. I’ll call you if I need to come back.” You try to dip below the radar so no one finds you before you get called back.

Cerny: Worldwide Studios was getting started in those days. It’s difficult to believe, but we had completely separate game-creation operations in three territories, each with their own core philosophies, management structures, goals, and relationships with publishing groups. And then, we get a tap on the shoulder around 2005 or 2006. Things are changing.

Layden: That’s right. We started Worldwide Studios in 2005. We took our three regional structures and tied them all up. By 2005, we’d been in the game business about 10 years. The cost of production was escalating. Those $2 million game days were over.

Cerny: They were $10 million by then.

Layden: We realized we couldn’t maintain this tripartite division structure. No single region could get the critical mass to compete with EA and Square Enix and Sega. We created Worldwide Studios in 2005. We now have 13 studios worldwide. This kind of structure allows us to compete at a global level. It gives you games like Gran Turismo and God of War and [Horizon Zero Dawn].

I was still in London at the time. In 2007, that’s when I got the phone call from the CEO at [Sony Computer Entertainment Inc.]. I’m standing on the train platform in Liverpool when my cell phone goes off. “Please hold for the CEO.” Yeah, sure, who says no to that? Then, there was Kaz Hirai asking me, “Shawn, how are you?” “Great, thanks, good to hear from you Kaz, how’ve you been?” “How long have you been in England, anyway?”

When you’re CEO, you never ask a question unless you already know the answer. When he asked me that, I’m sure he had my file right in front of him. I said, “Eight years, nine months, about 46 days.” “Yeah, that’s accurate. Time for you to come back to Japan.” “Well, I think there’s a lot of good work for me to do here in the U.K. I think it’s important.” “No, I think it’s time for you to come back to Japan.” “But Kaz, what am I going to do?” I didn’t know what kind of job he wanted me to do. “Shawn, I want you to come back to Japan and be president of SCE in Japan, the business unit.”

I had been in game production up until this time. I just started laughing on the train platform, with the CEO on my phone. He says, “What are you laughing about?” “Kaz, you have to tell me. How bad is the situation if you think bringing a game producer from London back to Japan to run domestic sales and marketing sounds like a good idea to you?” Kaz was very honest. He said, “You can’t make it any worse.”

We had just launched PlayStation 3. Every territory was struggling to sell it, especially Japan, getting support for the platform and getting retailers behind it. We’d had a shakeup in culture at the SCE Japan offices. So, in October of 2007, I sadly left jolly olde England and moved back to Japan for my first job in sales and marketing in my entire life.

Cerny: And a job, as I understand it, that was retail. You were selling into retail. Drinks in the morning with the head of department store chains to get the latest games stocked. That’s Japanese business.

Layden: Then, you do the journos. Then, you sit with customer service in the afternoon. We’d work with third-party developers who’d always been competitors for me, and now, they’re partners on the platform. Making sure they supported PlayStation 3. It was going to the retailers that was the hard part. Going out to meet with the president of Yodobashi Camera or Yamada Denki. Having them beat up on me because they didn’t like the PS3 business bubble. I learned a lot about retail really fast. It was crazy.

But we did well. We were successful in my first 18 months of sales and marketing in Japan. I would like to say it was because of my success with PlayStation 3, but actually, it was because of [PlayStation Portable’s] success in Japan. That was almost entirely based on Monster Hunter. Monster Hunter was a great game for our PSP business in Japan. Capcom was an amazing partner for us. The beauty of Monster Hunter is that in order to complete the game, you had to do it with three friends. You needed teams of four. Every sale engendered three more sales to get your friends together to play.

Cerny: That’s a good model.

Layden: It was a great model, yeah. PSP was very good to me during my time at SCE in Japan.

Cerny: What was it like trying to sell PlayStation 3? It was tricky in every country. On the PlayStation, we were the spunky upstart. PlayStation 2 had a tremendous brand following. And then, PlayStation 3, a supercomputer on a chip….

Layden: Yeah, the supercomputer on a chip. In some ways, you can look at the rise of the PlayStation — sometimes, it reads like a Greek drama. PlayStation comes out of nowhere, a little kid from the forest who comes to the big city. There’s these two titans, Sega and Nintendo, running everything. PlayStation finds a way to be successful. It finds a way to get a lot of partners on the platform and bring out great games and really disrupt the gaming market.

Then, we launch into PlayStation 2, where we come in as leaders. We continue as leaders. Some players drop out of the marketplace, and some try to get in and don’t succeed. The PlayStation 2 sales just rocket. Still the biggest-selling platform of all time. And then, PlayStation 3, sometimes you can go back and look at it and say that was our Icarus moment. We flew too close to the sun. We took a bit of a dip in the business, to say the least, during the PlayStation 3 era. Only finally fighting it out to parity with Xbox 360 by the end of the life cycle.

PlayStation 4 is a story of redemption. I think we came back. We had the right hardware specs, thank you very much. And we had good support from our partners. I think we got back to our basis of PlayStation being a people’s platform. It’s there to provide something for our third-party partners to succeed with and reach out to their fans. We just try to keep an understanding, keep an appreciation of — we get here with our fans at the same time. We succeed in our business with our partners at the same time.

Cerny: Where are you today?

Layden: It’s hard to say. Technically speaking, I still kind of live in Japan. I’m there about half of my time.

Cerny: How many years running were you in Japan at that point?

Layden: Two or three years.

Cerny: And you’d still never worked in America for Sony?

Layden: I still hadn’t worked in America for Sony, yeah.

Cerny: And then, you got a call?

Layden: Right. There was another call. Same guy, Kaz, who says to me in late 2009, “Hey, Shawn, the PlayStation Network, we’re doing a lot of stuff around that. Remember how you told me that you need to focus on the Network business to make it grow? We’re going to start this new company called Sony Network Entertainment in the Bay Area. We’ve got this guy named Tim Schaaff, an Apple guy. He’ll be the president of that company. We want you to go over there and be the COO.” I said, “Sure, when is this happening?” “As soon as you can get there.”

The pattern you see here is that I built my credibility around always saying yes when they asked me to do something. But at the time, we’d just moved back from London three years earlier. My kids were still grieving that they had to leave all their friends in London to move to Tokyo. When I talked to my wife about it….

Cerny: It’s like being in the military, right? A base every year or two.

Layden: Right, except my wife’s the general, not me. She decided that I would go to the outpost in San Francisco and then come back to Tokyo about seven-to-10 days every month.

Cerny: Sony Network Entertainment, that was a little step outside games. That wasn’t just games, right? It was also movies and TV. It’s a more general service that you’re trying to build.

Layden: Right. The premise of Sony Network Entertainment at the get-go was really — at the time, every bit of Sony was spitting up its own online presence, its own network service. We put a burden on the user. Go here and create your PlayStation relationship. Now, go here and create your Bravia TV relationship. Now, go here and create your Cyber Shop relationship. The consumer had to create eight or nine relationships with Sony to enjoy our products and services. By creating Sony Network Entertainment, we wanted to capture all that activity into one place. You could create a Sony Network Entertainment presence, and we’d channel you through that into other bits of Sony.

That was the theory, anyway. But in the end, by and large, that relationship was built around PlayStation. At the time, we had our own streaming video services. We still do. We also had our own streaming music service, which we’ve dumped. We got out of that one. Music Unlimited. We did that for about three painful years. Trust me, they were really painful. Streaming music is a hard business. Ask the guys at Spotify. I think they only managed it by just growing all the time. We decided to partner with Spotify and bring them onto the platform. At the time, we were the exclusive console partner for Spotify. We helped them grow and bring music to our services.

We still like the PlayStation to be a place where you could realize all of your entertainment activities. We’d like to think people will game 24 hours a day, but we know that sometimes you watch TV or listen to music or watch a film. We just like to keep you in the world of PlayStation, so you can do all that.

Cerny: That was about three years?

Layden: 2010 to 2014. Four years.

Cerny: And then, you got a call that was different because it wasn’t Kaz.

Layden: Yeah, it’s not Kaz. It was Andrew House. It was a pitch. “Shawn, great work with the network stuff. We’ve got a new job for you.” “OK, what is it now?” “We want you to move over and be president at [Sony Computer Entertainment America].” Jack Tretton was stepping down. That’s what got me on the stage at E3 in 2014.

Cerny: That’s huge. That’s a business unit representing a pretty big piece of PlayStation.

Layden: Probably in excess of 40 percent, yeah. It’s a lot. It was only so different from Japan. American retailers are just as doggedly aggressive as Japanese retailers, so that was the same. Our partners in development across the platform — it was interesting. PlayStation 3 and PlayStation 4, that was a time when the Western development community really rose up in their quality standards.

In fact, a lot of the Japanese developers had a rough start in the transition from PlayStation 2 to PlayStation 3 and PlayStation 4. In just the last 18 months, we’re starting to see the Japanese development community come back strong on PlayStation 4. But the PS4 has been very good for American developers — Activision, EA, Take-Two, Warner Bros. Working with them as partners was part of that business as well. But that all came to an end in April.

Cerny: You got a call first in 2017? 2016?

Layden: 2016. “Can you take on another job? Can you also be the chairman of Worldwide Studios?” I asked if that came with two paychecks, but they said no. I did that for a couple of years. Now, we’ve changed the structure. We’ve globalized all sales and marketing under Jim Ryan, who works out of London. I’ve managed to focus my efforts and my attentions on growing Worldwide Studios.

Cerny: So, 22 years, ending up as chairman of Worldwide Studios.

Layden: In Japan, they have this thing called stamp rally. Do you know what that is? You go to a theme park or something like that, and at every tent, you get a stamp on your card. You want to collect them all. I think [I] was playing the PlayStation stamp rally. I’ve worked at every possible company inside PlayStation, some of which don’t exist anymore.

Cerny: Andrew House gave you a good run for your money before he resigned. He’d been to the States. He’d done Japan.

Layden: He hadn’t done the network company, though, and he hadn’t done Worldwide Studios.

Cerny: So, Worldwide Studios. Here’s a leading question. What makes the Worldwide Studios so special?

Layden: I think a lot of reasons. You may not know that my same studio structure that brings you Gran Turismo is the one that also brings you The Last of Us, Horizon Zero Dawn, and Detroit: Become Human, and soon this game called Spider-Man.

We have these 13 studios worldwide. One of the things that makes our structure a bit unique — I challenge anyone to argue my claim — is that we’re the only studio structure I know that can create triple-A content in three regions. We can make it in Japan, in Europe, and in America. I think that gives us a certain energy, a certain power. Certainly, it’s a wider viewpoint about the markets and gamers worldwide. That’s a benefit to all of the studios. We have probably 2,500, 3,000 people. We have a lot of external partners that we work with, whether it’s Insomniac — again, I’m pushing Spider-Man — or Quantic Dream or Supermassive. Our breadth is really wide.

Another thing that makes Worldwide Studios special is we put a lot of energy and time and dedication into storytelling. We like the big story. We like the narrative. We want to make people think and laugh and cry and get to know the characters and worlds we create. Hopefully, you want to live in those worlds for a long time and listen to the stories the characters have to tell.

For us, our entertainment medium is really about, can we move you? Can we get you to have a new thought, to see a new thing? I think that if you look at all of our games, that’s the one thing that knits it all together.

Cerny: That energy and connection helps you make a much better game. At the same time, all of that somehow, on a business level, needs to slot together with hardware. There’s a marketing organization that is at its most efficient when there’s a steady of series of products in the marketplace. Somehow, you have to have a portfolio and a philosophy about what games should be made beyond the next game that Naughty Dog is very excited about making.

Layden: You’re right. Every great game comes from someone’s passion, someone’s vision. You don’t make a great game based on the outcome of an eight-member committee when you don’t even know those people’s names. Worldwide Studios, running it globally, I thought for a long time, what kind of driving ethos could we create? How would we decide what games we wanted to do? Since we’re working at a global level, I had to make my message as simple as possible. I tried to boil it down to three things.

Cerny: Here are the constraints you operate under as a creator at Worldwide Studios.

Layden: First, best, or must. The game you’re working on has to fulfill at least one of the criteria, preferably too. First means creating a first-of-its-kind game — a genre that doesn’t exist, a market that hasn’t been actualized yet. Will your game do that?

That’s an obligation for us as first-party development. We’re not here to create games that steal market share from other publishers. Because we manage the platform, it’s not to steal pieces of the pie. It’s to grow the entire pie. If you create a new genre like Parappa the Rapper did — rhythm action gaming, who [knew] that would be a genre? Or SingStar, bringing in a microphone to your living room? And soon, coming out of our studios, a game called Concrete Genie, a new form of entertainment we haven’t seen before. If you can fulfill that, at a Worldwide Studios studios level, we’re interested in that project.

Best is probably the easiest one to explain. If you’re best, it means if you’re making an action-adventure, you’re making Uncharted or God of War. If you’re making a racing game, you’re making Gran Turismo. Or a golf game, Everybody’s Golf, my favorite golf game. You must be the best in class. If someone came up with a plan, did all the spreadsheets, and said, “Shawn, this is going to make money for us, and it’s going to be the fourth-best racing game ever,” I’m not interested in doing the fourth-best anything. That wouldn’t be something we’d get behind.

Must is probably the other thing that reflects our position as first-party development attached to the platform. There are some games we must do, even if initially the profitability might be hard to make. For example, an easy one for that is [PlayStation VR] games. When you’re trying to grow the PSVR installed base, how many units are in homes, it’s difficult for some third parties to look at that addressable market and get the business to work for them. But we need games to move the platform. It’s a chicken-and-egg thing. So, at Worldwide Studios, we took on a number of PSVR projects in order to support the launch of that platform and getting it off the ground.

So first, best, and must. We look at all of our games through that lens. It helps us make the right decisions, most of the time.

Cerny: What about risk taking? Is it possible to go out with — we don’t say what we spend on these titles.

Layden: A lot.

Cerny: Yes, well in excess of $50 million, I think everyone would agree on that. Is it possible to go ahead and spend that and not know the degree of market you’re going to have for that title?

Layden: It’s difficult. Back in the day, when games were costing $2 million or so, you could take 12 or 15 shots on goal to make five. But with the price of games going up two orders of magnitude, you’re looking at getting to take seven shots on goal to make five. You have to take smarter risks. You have to understand your market better. We do a lot of research about games before we create them — not only technically but market-wise. We have different stages throughout the production cycle where you have to decide to go or no-go.

Green-lighting is a tricky part of the business, but sometimes, red-lighting is the hardest part. You have to tell someone who’s spent a lot of time on something that it just isn’t working. You have to stand that down and do something else. We do, at Worldwide Studios, have a lot of scope for that kind of risk taking. It’s not one strike and you’re out. We’ll give you a chance to try new projects, too, even if the one you just had to stop working on wasn’t as successful as you’d like it to be. But it’s not for the faint of heart, that’s for sure.

Cerny: I think something like a quarter of the titles that you out there see, that isn’t the game that the team started making. Sometimes, at some point in the process, someone taps them on the shoulder and says, “Maybe you should think about whether or not you really want to take this to the end.”

Layden: Right. Because again, the cost of entry and the cost of continuation is so high. Sometimes, you have to take a huge write-off and move on quickly to the next thing. That’s true for all developers. That’s not specific to us. It’s everyone here. Every developer in this room knows what that’s like. We’re taking bigger bets. We’re spending a lot more money. It’s taking more time. More time just to get to proof of technology, proof of concept. You can get millions of dollars into the process before you prove that out. But still, games cost only $60. It’s a changing business model, certainly, for the games community.

Cerny: With 13 studios, how different is the process depending on the studio?

Layden: Well, how much time do you have [laughs]? It’s quite different, but I think as you work together as a collective — our studios follow the same trajectory in game development. Once we get it started and how we manage that, how we do milestones and prove deliverables. But certainly, in the ideation or the inception part, it’s different for different studios all around. The way we got to God of War is different from the way we got to Everybody’s Golf is different from the way we got to Spider-Man.

Cerny: Or how we’re getting to Dreams.

Layden: And how we’re getting to Dreams, yes. We’re cruising at altitude with that right now. I don’t think we have plans to announce around release dates, but I think we’ll hear more about that later.

Audience: Mark, how long have you been working at PlayStation?

Cerny: God, in one form or another — 24 years?

Layden: You’re vintage too.

Cerny: Yes, we say vintage. In games, this is year 37, which is pretty scary.

Audience: I was at E3 this year, and one thing that struck me is that you see very little of game creators talking about their games there. Do you think that maybe the industry can do more to spotlight the people who make games in connection with their projects?

Layden: In the States, I think, we do this thing in December called PlayStation Experience. PSX is more of a — we have some presentations, and then, we have a lot of panels where developers can come out and speak about their products and their games in more depth and detail. There’s more of this kind of activity happening as PSX. We were there last December, and it was amazing to see what was on stage. We had Cory Barlog from God of War. We had Hermen Hulst from Horizon. We had [Guillaume de Fondaumière] from Quantic Dream, and Shivam from Media Molecule. We had five, six, seven creators all there on stage, all coming from Worldwide Studios to talk about the triple-A games that they’re working on in more detail, more in this format.

I still think E3 is by and large a trade show. It’s there for the big sales and marketing push around your titles going into the holiday period. I agree with you, that we need to find more places. I think Gamelab is now one of the places where we can have these more human conversations.

Cerny: I think we’re seeing a bit of an evolution. When I started in games, in arcade games, back in 1982, not only were the creators not leading the story about the game, but we were forbidden to talk about our work. It was crazy. You’d work in a lab, and you’d create something like Asteroids, but you were forbidden by the company to ever mention publicly in any context — even to your family, if you read the contract — that you had anything to do with that game. As some consolation, you could put your initials in the credits. That was all you got.

That policy ended in 1983, thank God. I think we’re doing much better about bringing the creators forward. I think we still have a long way to go. It was wonderful to hear Ubisoft not only bringing their creators on stage at their press conference this year — I go every year. It’s a blast. But they’re even talking about involving gamers in the actual process of developing a game.

If you want to compose a piece of music for Beyond Good and Evil 2, if you want to create a character, they’re creating a pipeline for bringing gamers who want to be collaborative with their directors and their teams into the process. I think it’s going to be fun in the next 10 or 20 years as we figure out the logistics of how we can be more free and open about this process.

Layden: That was also one of the innovations when PlayStation entered the business in 1994. We put the developer logo on the front of the box. You had a Naughty Dog logo on the front of Crash.

Cerny: It’s really shifting toward developer-driven PR. But it’s still true that a game’s creation is somewhat of a black box until that first E3 or until it goes on sale. It’s going to be interesting to see how that all happens differently in the future.

Layden: Especially if you have this sort of collective consciousness of game lovers and game creators working together.

Cerny: Or Death Stranding. If you follow Mr. Kojima’s Twitter feed, you probably have a pretty good idea of what they’re doing on that project.

Audience: I wanted to reconcile the story about the numbers of developers with having the right developers. Ubisoft talks about how it has 12,000 developers. Once upon a time, Sony had twice as many developers as Microsoft, and you could predict a better outcome for Sony in the games business because of that. But you also make a big deal of having Hideo Kojima as a single developer on your side making a big difference in the overall business. How do you look at that, whether you need to have the most developers in order to win or just having the right set of developers?

Layden: For Worldwide Studios now, our output, the number of teams we have, I think it’s about the right size for what we need to do. We’re never going to be like Nintendo, holding the lion’s share of the Nintendo platform game business because that’s not the way we work. We want to make the PlayStation platform available to all of our third-partners. I think we build success for PlayStation by getting as many people inside the tent as possible that aren’t necessarily controlled by Worldwide Studios.

For Worldwide Studios, our road to success is not necessarily measured by how many studios or how many people I have. It’s if we’re creating significant, impactful, important content that’s either first, best, or must-have products. I don’t really think it’s a numbers game like that.

Audience: I thought it was fascinating that you talked about PlayStation 3 flying too close to the sun. And then, PlayStation 4 coming to be more back to basics, to be more about players. There seems to be an issue at the moment where Sony isn’t listening to its players, though, around cross play, with Fortnite in particular. Are there any plans to open that up?

Layden: I’ve got one short statement on that. We’re hearing it. We’re looking at a lot of the possibilities. You can imagine that the circumstances around that affect a lot more than just one game. I’m confident that we’ll get to a solution which will be understood and accepted by our gaming community and at the same time supporting our business.

Audience: Many publishers now have a bigger and bigger percentage of their revenue coming from games released in previous years. Have you thought about building toward backwards compatibility in services like PlayStation Now?

Layden: Finding a way to resurface previous content, older content, in ways that people can enjoy….

Cerny: Crash Bandicoot!

Layden: Crash Bandicoot, just to name one. I think that’s partly around our PlayStation Now service, which allows you to experience all the PS3 games that you want to relive again or experience for the first time. It also takes publishers like ourselves to look at — great games, truly great games, are still great, are always great. We’ve gone back in our catalog to find some of our great titles that we’d like to bring to a new audience on PS4. We did the Ratchet & Clank remaster or Shadow of the Colossus.

Ratchet & Clank is interesting to look at. A lot of the stuff we heard was, “Well, hasn’t everyone played Ratchet & Clank?” We did a survey and found something crazy. At least three-quarters of PS4 owners had never played Ratchet & Clank. They never knew it. It’s 16 years ago. It makes enough sense. They might not have even been playing games at the time. We look strategically. Ratchet was a new title to a lot of the PS4 community, and that’s why it saw such great success.

We announced MediEvil at PSX last year. We’re bringing that one back. Crash is doing great for our friends at Activision. So yes, great games are always great, and we do try to find ways to resurface that content and give people access to it.

Audience: Can you talk more about being the first because of innovating, and must, something like VR games? What’s the distinction between those projects?

Layden: Must is sometimes driven by technology. We decide to do VR. We have PSVR technology. We’ve been working on that for six years. We’re in a place where the technology is ready to come to market, and we need some games that can help explain why VR is important and what VR can do. We designed games around that technology. First is not technology-dependent, per se. You can just have a great idea, like Parappa or Concrete Genie, and come out with that. It’s not platform-dependent.

Audience: What can you say about your experience working with the PlayStation Vita?

Layden: The Vita business was very successful in Japan. Vita capitalized on that. The gaming culture in Japan is much more strongly focused around the handheld dedicated gaming machine than perhaps in the West.

Cerny: Everyone has a portable on the train.

Layden: And everyone just wants to play games in their room when they get home. That dynamic, and the Japanese developers, put a lot of energy into the Vita platform, which is why it continued to be successful in Japan. We just didn’t have that kind of support here in the West.

Audience: I’m a student doing a degree in game development. Can you talk about your process of milestones in making games? Each year we develop a game, a simple one, starting with a sort of shadow, a vertical slice, and then an alpha and gold. Do you follow [those] same sort of methods?

Layden: Those are some of the key milestones we track as well in game development. First of all, you have to have proof of concept. Is this a great idea? We have people that look at that and interrogate that, ask questions about that. Then, you need to be able to prove the technology or prove the mechanics around that. You build toward that vertical slice, trying to show what 80 or 90 percent of the game is going to be and whether you can go forward from there. Then, you start tracking alpha and beta, other milestones from there.

Now, with online gaming, there are other milestones around that, around network infrastructure. Can you build out the architecture? Do you have a back end that can support this going out? What’s your load level? It’s probably more milestones than the few you just mentioned, but it’s typically the same. Now, here’s the great game creator to field this one.

Cerny: If you look at it historically, that model got traction in the ‘90s. Even on some big titles like SOCOM, we had no vertical slice. This was not at all uncommon — if you get back to the ‘80s and early ‘90s, you’d figure out every asset you needed to make in the game, build the assets, put the assets in the game, and the game would be playable about a month before launch. There were some downsides to that. It did not work many times, so the whole model changed to what you’re describing today.

Layden: Again, that’s the [$2 million to $3 million] model, where you could do it that way.

Cerny: I don’t think it even worked for a lot of those because playability is quite low. If you don’t get to play the game for more than a month before you ship it, all of these things that would occur to you in natural development — without a vertical slice, you’re losing out.

Disclosure: The organizers of Gamelab paid my way to Barcelona. Our coverage remains objective.