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.
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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.