Is the industry heading for a crash? And, if so, who’s going to do something about it?

The start of a new year is generally a time for optimism. But after 2023 brought unprecedented layoffs to the videogame industry, in spite of some huge commercial and critical successes, and with the release calendar looking a little bare, 2024 begins in more existential fashion. Clearly, something has gone wrong. Is it sustainable to keep making games the way they are today, or is a reckoning on the cards?

It’s a question that feels pressing in light of triple-A development budgets. Last June, poorly redacted court documents revealed that Sony’s budgets for Horizon Forbidden West and The Last Of Us Part II were in the region of $212 million and $220 million respectively. Following a ransomware attack against Insomniac Games in December, meanwhile, an image of an internal document suggested a budget of $315 million for Marvel’s Spider-Man 2, with similar amounts earmarked for the studio’s future titles.

One person who knows all about these spiralling budgets is Shawn Layden, who was chairman of Sony Interactive Entertainment Worldwide Studios until 2019, and now works as an advisor to Tencent and Streamline Media Group. Layden says he remembers getting “night sweats” ahead of a budget meeting where he planned to ask for $3 million – a paltry amount by today’s standards. “That has now accelerated to triple-digit millions,” he says, estimating that budgets have doubled since the PS4 era. “At what point do chief financial officers just slam their calculator on the tabletop and say, ‘I can’t greenlight $300 million – there’s no way I can pencil out the math’?”

Former SIE studios boss Shawn Layden and Stuart Dinsey, chairman of Curve