Former PlayStation boss says Amazon, Netflix pose huge threat to the game industry

Former Sony Interactive Entertainment president Shawn Layden has described the rising cost of game development as an "existential threat" and claims companies like Netflix and Amazon, which are attempting to make inroads into the game industry, are the "barbarians at the gate."

Outlining what he perceives to be the biggest threats to the industry at the GamesIndustry.biz Investment Summit in Seattle, Layden said consolidation is the "enemy of creativity," referring to the recent spate of major acquisitions and subsequent wave of layoffs and studio closures.

He also suggested the intrusion of non-endemic companies into the video game market could negatively impact the current status quo, and believes spiraling development costs will spell disaster.

"Right now we see all the big players going, 'Oh, gaming? It's bringing in billions of dollars a year? I want a piece of that.' And so we have Google, Netflix, Apple and Amazon wanting to get piece and trying to disrupt our industry," he said.

Layden noted how other industries were irrevocably changed by similar interlopers, pointing to how Netflix ushered in the steaming age and reshaped how we engage with movies and television shows by "getting some content, getting some licenses, and nailing it to your house."

"I'm hoping gaming will be the first industry where we disrupt ourselves. Where it doesn’t take a Google or an Amazon to completely flip the table. We should be smart enough to see these changes coming and prepare ourselves for that eventuality," he continued.

Referencing the dawn and rapid demise of Google Stadia, Layden said some disruptors have realized you need more than technology to establish a solid foothold in games. 

Harking back to his Sony days, Layden said the PlayStation maker knew "entertainment was its own beast," and suggested the company understood that the original PlayStation would've been dead on arrival without a compelling software line-up. 

"In the initial stages of the company, it was a joint venture between Sony Electronics and Sony Music Japan. They knew they had to bring the entertainment [...] right from the beginning," he added.

"We had to be the third-party platform, so we had to get Namco, Square, EA, Activision. Those Sony Music guys are the ones that got Square to move Final Fantasy 7 off of Nintendo and onto PlayStation, probably the biggest sea change move."

You can hear more from Layden by checking out the full write-up on GamesIndustry.biz.