Sony’s North American PlayStation chief on PS4’s dominance, 1-year anniversary, and GamerGate (interview)

Shawn Layden took over as president and CEO of Sony Computer Entertainment America seven months ago. Replacing longtime head Jack Tretton, Layden has been responsible for the sales of the PlayStation 4, which recently celebrated its one-year anniversary.

Sony said Friday that it has sold 13.5 million units of the PS4 in the past year, significantly more than the 10 million Xbox Ones claimed by Microsoft during the past year. Sony also released other interesting stats: PlayStation Plus, the subscription-based online program, now has 7.9 million paying members; Sony has more than 56 million unique active users; they’ve played a billion hours on the PS4 online; and they have pushed the Share button on the PS4 more than 530 million times.

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These numbers suggest that the console war is Sony’s to lose at this point, and that it is faring much better than it did in the PlayStation 3 generation. Layden’s job is to keep it going. He met with us at Sony’s U.S. PlayStation headquarters on Friday for a wide-ranging interview on everything from price cuts to the upcoming PlayStation Experience fan event (where Sony plans new game announcements) and the controversy around #GamerGate, which has included a range of issues from sexual harassment to game journalism ethics.

Here’s an edited transcript of our interview.

GamesBeat: Please tell us about your background at Sony.

Shawn Layden: I joined SCEA in April. What’s that, seven months now? I joined Sony in 1987, of course. I’ve been the Sony group for 27 years. I’ve been with PlayStation since 1996.

GamesBeat: What was the transfer into this job like?

Layden: As far as distance goes, it was cool. I was working in that building, because that building is the headquarters for Sony Network Entertainment. I came back from Tokyo to America about four years ago when we started that company here in the bay area. I joined as its COO. We pulled that together. It was crazy. The first day I started, we had 800 people as a startup company. That’s a different experience.

But then in April I was asked to take over the leadership role here at SCEA. That transition was just a walk across the park to come in here. Since I’ve been with the PlayStation group before, virtually everyone here is someone I’ve worked with before and known a long time. That transition was pretty smooth.

GamesBeat: Did you already have a close relationship with [worldwide Sony Computer Entertainment chief Andrew House and Sony CEO] Kaz Hirai?

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Layden: Sure. I’ve been working with Andy for more than 20 years. I’ve known Kaz my entire PlayStation career. We all grew up in the company at the same time. Kaz has gone on to great things, of course.

GamesBeat: You have this new data out today. That was interesting: the numbers on the year after PlayStation 4. 13.5 million sold and 530 million share button presses. Some of this data is pretty interesting. You haven’t released this kind of stuff before.

Layden: The share button press, people thought, “Wow, that’s pretty micro.” But it’s more an indication of a trend in what people are doing. That’s half a billion presses from people wanting to show their gameplay and share with their friends.

Making a physical button on the controller, as you can imagine, is not an easy decision to take at the time. Otherwise everyone would want a button on it to do something or other. But we felt sharing was the perfect thing to make physical on the controller. In that moment, you don’t want to start pulling down menus and finding out how to capture this or that. You just hit the button and pull it out. That was a definite win for us.

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GamesBeat: Is there a way you could put the 56 million unique active users in context? Activision talks about having 40 million monthly active users for Call of Duty. In some ways that number will seem small compared to some other big properties out there.

Layden: We used to talk about PlayStation accounts, PlayStation Network. That number got north of 100 million very quickly. It’s much further now. But we felt that it wasn’t a meaningful metric. I have five PlayStation Network accounts myself. I’m not the average user, but a lot of people will have two or more accounts.

Our metric for active is that it has had activity on the network in the last 30 days. These aren’t sleeping accounts: someone making an account and then putting their Vita in a closet.

GamesBeat: The time associated with those players is probably something worth talking about as well. Other people who have that kind of number might have them for a lot less time.

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Layden: Certainly. These people are spending hours on a regular basis across the service.

GamesBeat: What would you say you’re still working on? These are impressive numbers, but what do you really want to boost?

Layden: We’re working on everything. But we’re really happy with, in the PlayStation 4 era, the high percentage of network attachment we’re getting against the units. Some crazy number, like 95 percent of PlayStation 4s, has attached to the network. We could only dream of that with PlayStation 2 or PlayStation 3. Keeping that high attachment rate is something we’re pushing on. PlayStation Plus takeup has been very high with the advent of PlayStation 4. We want to continue to work on that to show value and benefit to our members who’ve joined that club, if you will.

Certainly the continued rollout of the platform—13.5 million is a pretty good achievement for us. As anyone else would say, the first 13.5 million is the easy 13.5 million. We need to continue to push that installed base. We’re in a strong position now. Black Friday is just around the corner. In my neighborhood we heard “Jingle Bells” in the department stores in September, but Black Friday is the real kickoff.

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GamesBeat: Does it seem accurate to say that you have about a two-to-one advantage over Xbox One?

Layden: The math seems to look like that.

GamesBeat: I see the bags under your eyes. The sweat rolling down your face. [Author’s note: I was joking here] Do you feel pressure from the $50 price cut that Microsoft has made (Haha)?

Layden: That’s from too much celebrating.

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GamesBeat: Hahaha.

Layden: No, not at all. It’s going to be a very competitive holiday season. Everyone’s going to move their numbers the best way they can. We’re going to be fully engaged in that battle.

GamesBeat: There are price cuts that are possible, but there are other things you could do to fight on that front, I suppose.

Layden: Benefit and value, I think, is what the customer will look for this holiday season. What kind of benefit does the platform bring to me? What added value? Those types of things. We were talking a couple of days ago when we made the announcements about the PlayStation Vue. That’s another way we’re showing the value of the platform. We’re still unveiling PSNow, but that should be coming to larger-scale rollout soon. That’s another way we show benefit and value to the platform.

GamesBeat: PS TV and so on, it seems like these are some of the things that PlayStation people mostly pooh-poohed at the very beginning when they were saying, “This is for gamers!”

Layden: A lot of gamers, our gaming audience, also watch television. We have the research to prove it. What we’re looking at with PlayStation View, I think you can look at music and say that things like iTunes or Spotify have changed and innovated across the music space. Whether it’s Netflix or Amazon or our own video service, that’s changed the whole paradigm around video, film, cinema, that sort of thing.

We haven’t seen a lot of innovation in the TV space, to the same degree. A lot of the stuff you experience on TV is pretty much the same way you experienced it 10 years ago. At 8:00 there’s this program and you want to watch it, but maybe now you can DVR it and watch it later. Still, a lot of it is centered around an old-style television. What we’re doing with PlayStation View is trying to disrupt that market.

GamesBeat: Do you want to help people multitask? Just watch a window of something while they’re doing something else?

Layden: I don’t think the research bears out that people want to have a P-in-P over here and something else over there. That only really happens when you try to watch the Cotton Bowl and the Rose Bowl at the same time. What we’re looking at is, there’s a lot of content out there. The airwaves are full of more stuff than you could watch if you lived to be 200. But it’s tricky to find it and get to it and assemble it the way you want it. Here are the channels I like to have close to me. Here are the things I only watch at certain times. PlayStation View gives you the chance to personalize your UI experience like that.

GamesBeat: What do you feel is going to get attention this holiday?

Layden: Next week we’re seeing GTA V coming out for PlayStation 4. We’re seeing Far Cry 4 from Ubisoft. It’s the best of the Far Cry series so far. I really love that game. My favorite for next week, though, is LittleBigPlanet 3. It’s a homegrown title, so I do have an affinity toward that. I was working in London when we discovered Media Molecule and signed them to the platform. But what I love about it is, we’re now seeing the catalog start to expand. I love my shooters too. I love action-adventure like everyone else. But LBP 3, we’re bringing the kind of content that draws the whole family to the gaming experience.

GamesBeat: Is PlayStation a little light on exclusives this season?

Layden: Well, obviously LittleBigPlanet is exclusive. We’re looking, early in the new year, at titles like Bloodborne and The Order. For the holiday season, the greatest games are the greatest games. I certainly understand when publishers wish to get their art in front of as many eyeballs as possible. But I like to think that the games look better and play better on PlayStation 4.

GamesBeat: It’s okay to spread the slate out across the whole year, do you think? So you can have some of these exclusives coming in the springtime or other times instead of always in the fall. The Last of Us came in the summer.

Layden: Artists create their own timeline. [laughs] There’s only so much we can do to affect that. But to the general point, we like to have good content appear on the platform year-round. We don’t just want a cluster in the summer and a cluster at the holidays. We’d like to fill the whole year.

GamesBeat: What were some challenges you faced in the past year?

Layden: Before I got here, we launched the PlayStation 4. The big challenge last Christmas was just getting supply into stores. You’ll have seen the NPD numbers from yesterday. We’ve been the leading next-gen console for the last 10 months. It would have been 12 months had we gotten enough product in the market in December 2013. Those challenges have all settled out. It’s a first-class problem to have, to be honest. But now Europe and Japan are lit up. We have a global PlayStation 4 presence, and that’s good.

At the start of any new platform, there’s a lot of energy and focus on that launch window for the hardware, getting the software in there. Then there’s the inevitable lull a few months after that. But we saw, starting late this summer with titles like Madden and Destiny coming out strong in September, it’s been snowballing into the holiday. The content pipeline is flush now.

GamesBeat: I thought you were going to mention the PlayStation 4 Update 2.0 issue as a challenge. Have you learned anything from that? Is it resolved?

Layden: Knock on wood, the issues have been ironed out. Sometimes, in our excitement to bring some great new innovation to market as quickly as we can, we move really fast. I like to think we can remediate very quickly as well.

GamesBeat: Do you think you’ll change the way some of your updates happen? Maybe just do a lot more smaller ones?

Layden: We’re looking at all these issues. Sometimes these updates get big because so many of the components are reliant on each other in some way. It naturally creates its own size effect. But I think we’ll look at the rollout going forward and see when we can get a discrete benefit or feature that can go out and go out now. You’ll still see some of the large ones, just because they’ll be packaged together.

GamesBeat: I am curious what kind of strategy you’d pursue going forward now that you have this market position. You’ve outsold the other guys two-to-one. It’s very different from the start of the last generation. Do you want to think about doing some things like grabbing back certain exclusives? The one I think of is that Microsoft was always perceived to have an advantage in Xbox Live. The Call of Duty exclusive they had with Xbox seemed to be one that matters.

Layden: Call of Duty Advanced Warfare is selling really well on the PlayStation 4, so–

GamesBeat: But with the map pack updates coming later, it’s still late.

Layden: There’s some of that going on, yes. We’re looking at 2015. Our concentration is going to be around continuing to provide two things. One is, from a hardware standpoint, we want to continue to innovate across the hardware. There are lots more features and benefits we can pull out of the PlayStation 4 hardware. It’s pretty well feature-proved to allow us to do that. We’ll continue to execute on that.

At the same time, we’ll continue to work with our publishing partners, and especially the independent developer community, to propel their excitement into an effective way to execute their vision for games across the new platform as well. The broadening of the demographic for the PlayStation 4 – and for any new platform – really begins in year two. My personal favorite, again, is LBP 3. That’s the harbinger of great things to come as far as lightening the palette of games we’ll be exploring.

GamesBeat: Have gamers been excited about anything related to the PS4 that’s really surprised you?

Layden: 530 million share button presses was not in my model. I did not see that number coming. That’s been exciting for us. That also belies the fact that everyone is getting connected across the PlayStation 4. It’s become its own social hub, which is so important. We all have our cell phone with us. We’re all ready to tweet or call or text someone at the drop of a hat. People are using the PS4, as we can see from that share button metric, to do just that, to stay connected with other people.

We’re also happy to see a lot of excitement around the PlayStation Experience in Las Vegas. One thing we’re doing this year that’s entirely new to us is hosting our own consumer event. When I was in Tokyo we did one, years ago, and in London we did it for a few years in the PS2 era. It effectively killed ECTS, the U.K. trade show. But we think that with the PlayStation birthday, December 3–

GamesBeat: 20 years now?

Layden: 20 years this year, yeah. December 3, 1994. Not only we have the birthday, but it’s almost exactly six months after E3. It’s good market for a lot of the game developers to come out and have something new to say, some secrets to reveal, some announcements to make. We can open that up to the wider gaming community, our fans.

GamesBeat: Did you plan it to also be the day after the new awards show that Geoff Keighley is putting on? Those game awards are on the Friday after you start.

Layden: It’s going to be a great three-day weekend in Vegas, is what I’d say.

GamesBeat: Is the strength of eSports becoming more evident? Are fan events related to that as well? Is it becoming something you have to think about?

Layden: eSports are interesting. It’s coming into its own now. You’ve been covering the sector for as long as I’ve been in the sector. We’ve been talking about that since the first PlayStation, Tekken tournaments and things like that. But now, with the networking power of the consoles—It’s still mostly a PC thing, the big eSports events. But the connectivity of the consoles and the fan base around that and the type of games we can experience, naturally that all leads into something. I don’t know if this will be year one for that. But there’s a lot of excitement and energy around that. We’re talking about tournament activities and things like that at PlayStation Experience.

GamesBeat: Here’s my million-dollar question: How does PlayStation compete with things like Clash of Clans and League of Legends?

Layden: We coexist. The world is a big place. We totally accept that, even if you’re a hardcore PlayStation gamer, you may wish to have different gaming experiences in different settings. That’s completely reasonable.

GamesBeat: But not only do you have to beat Smash Bros. or Sunset Overdrive, you have to beat these other platforms like Android and iOS.

Layden: We want to be successful. I don’t think it’s necessarily a zero-sum game. I don’t have to beat some other game in order for my game to succeed. I just have to make a great game.

GamesBeat: EA Access, I don’t know if you have much to say about how it is [available on the Xbox One and not PS4], but it seems like the publishers’ attempts to be creative to business models are an interesting space, one where things have yet to be resolved. Does EA Access make you think about anything on that front?

Layden: It may sound cliché, perhaps because I say it all the time, but we’re focused on what bring the benefit and the value to the PlayStation user. We’re looking at something like PlayStation Now, a streaming gaming service, being able to reactivate the entire PlayStation 3 catalog for the PlayStation 4 community.

One of the things that we don’t manage very well in our industry—You can still buy Bob Dylan’s Blonde on Blonde album. You can download it, buy a CD, buy vinyl. You can still get a copy of The Maltese Falcon on DVD or blu-ray or some download service. But in gaming, every time we change platforms, we take this wonderful vault of IP and we put it in the garage. We never get to see it again. We’re hoping that streaming technology will give us a way to fix that. We can begin to re-open those vaults of valuable IP that we’ve had for years and haven’t found a way to get in front of the eyes of new gamers.

We’re looking at all kinds of different ways to bring those benefits and values to consumers. I’m not surprised that the publishing community is also trying to develop their own.

GamesBeat: The early users on PlayStation Now felt like the frame rate and quality for the graphics could be better. It was the latency. Is that a solvable problem?

Layden: Most of it’s been solved already. If you get on the PlayStation Now beta currently—I’m amazed that we got the tech up and running and tweaked as fast as we did. It came together really strong. At the same time, what we’re also seeing is that everyone is getting better net connections in their homes – to varying degrees, depending on where you live, but that’s also improving. Those two improvement ramps are only going in positive directions.

GamesBeat: How is your view of the indie situation on the platform?

Layden: It’s great. Maybe in the last generation we lost some of our mojo or focus around creating opportunities for new developers to get into the game. I remember back on PlayStation one, we had something called—Did you ever hear of the Net Yaroze? It was a program we had. You would sign up as an independent developer and you got this dev kit, a matte black PSX. You would code using a form of Linux and some other tools we’d give you and we let people tinker around and try to build games.

It’s something that’s been in the DNA of the PlayStation group for 20 years now. Maybe we lost that at some point in the middle. But I’m so happy that we’ve come back to that. Vita provides a good opportunity platform for people to come up with more modest game opportunities. I was in Latin America just three months ago meeting with a bunch of developers to see what they’re working on down there. There’s some crazy stuff being made in Peru and Chile. Hopefully we can give them a chance to reach an audience in North America as well.

It’s super important to us. I know you’ve spoken to Adam Boyes. Adam is the poster boy/mascot for the whole indie movement.

GamesBeat: How are markets like that looking to you? These are emerging markets that the last generation never reached. I wonder if more of them could be opened up.

Layden: Certainly under our remit, where we handle all the markets from Nova Scotia to Tierra del Fuego—We put a lot of energy into Latin America and South America. Year on year, we have a special Destination PlayStation for Latin America, to meet with the retailers and the development community. It’s growing.

There’s a lot of complexity around working in those markets, but the complexities aren’t around the customer understanding what the gaming opportunity is. It’s more the complexity around government regulations on customs and duties and taxation, which can make it cost prohibitive, in some markets, for a wider audience to get to that. But we keep working with the government agencies to find the most effective way to bring the right product at the right price into South America.

GamesBeat: The business models seem to be interesting. The PlayStation Plus subscription service seems to have worked out. I don’t know about free-to-play. When you get a larger installed base at some point, free-to-play starts to make sense too. Are you interested in any new business models?

Layden: Absolutely. I hate to keep banging on the benefit and value story, but I think our PlayStation fans have the expectation – and they’re right to do so – that PlayStation is somewhere new things will continue to be served to them. New opportunities, new ideas, new ways of solving old problems, new ways to experience content.

Free-to-play is an interesting market. It’s quicker to understand how that works on a mobile phone, or on tablet, because the development costs going in to build the application are different. When you bring it to a 75” TV, the development cost of creating that is pretty high. If it’s completely free-to-play, you’re looking at business models where 99 percent of people don’t pay for anything, one percent pay for everything, and that’s how you build it out. It’s tricky. We’re working with a lot of different developers on what’s the best route to market for that.

GamesBeat: Part of this last year has seen a lot of craziness happening. Gamergate has been going nuts. The industry has been kind of quiet about it. I wonder why, and whether or not there’s much to say about it.

Layden: I think the industry has spoken with one voice on this one, through the ESA. All of us are members of that trade body, including me and Phil Spencer and Reggie and all the big publishers.

GamesBeat: They issued a statement, but they didn’t really say much about it. It seems coordinated, but there hasn’t been as much speaking out as I might have expected. People could still individually have something to say. Mike Morhaime did at BlizzCon. The message hasn’t been repeated as much. It just seems uncharacteristically quiet to me.

Layden: I did see your piece about your favorite women characters in games. Ellie was an excellent choice. I don’t think there is one statement or one position on it, or one answer to whatever this very broadly-defined #GamerGate really means. A lot of things are getting swept into that. I’ll be very clear about my view of harassment or bullying. It’s completely unacceptable. Completely unacceptable. I will not be vague or equivocate about that.

The question about women in the gaming industry, that’s something we all take on board as individual corporations. We are best in class — or close to it, certainly – in this industry. In the development group we have Shannon Studstill, who runs our whole Santa Monica operation. She’s going to bring the next big franchise out from there. We have Connie Booth, the studio head up here in San Mateo. Women executives up and down the [organization chart], and in the production teams. We make our statement just by executing to that plan.