According to IGN, former PlayStation executive Shawn Layden says the global video game industry, while worth $250 billion, has a core problem: console sales per generation cap out at around 250 million units. He noted the only spike to nearly 300 million was during the Wii era, which he calls an anomaly. Layden argues the industry must “crack that cap” by studying the 1970s/80s videotape format war, where VHS beat Sony’s Betamax because it licensed its format widely to other manufacturers. His radical solution is for Sony, Microsoft, and Nintendo to form a consortium around a single, universal gaming format, allowing any company to build compatible hardware and ending the era of exclusive platforms.
The Betamax Lesson for Gaming
Layden’s analogy is pretty sharp, honestly. He’s basically saying the console business is stuck in the Betamax phase. Sony kept its tech locked down, and VHS won by letting everyone and their uncle make a VCR. The key insight? People need to share stuff. If your neighbor has a VHS tape of a movie, you need a VHS player to watch it. That network effect is everything.
And he’s right that the industry learned this lesson for later formats like CD, DVD, and Blu-ray. They created a standard and then competed on the hardware. You could buy a fancy Blu-ray player or a cheap one, but they all played the same discs. So why are games different? Well, the console is</em the platform. The exclusives are</em the reason you pick one box over another. Unbundling that is the trillion-dollar question.
The Consortium Fantasy (And Reality)
Here’s the thing: Layden’s proposal would require the three giants to voluntarily give up their walled gardens. Microsoft might be the closest, with its “Xbox everywhere” software push. Sony is dipping a toe with PC ports. But Nintendo? The idea of The Legend of Zelda launching day-one on a non-Nintendo device is pure fantasy. As Layden himself joked, “If Mario starts showing up on PlayStation, that’s the apocalypse, right?”
He’s not even advocating for that extreme. He still sees value in strong exclusives to “make the platform sing.” But he’s pointing to a fundamental ceiling. We’re all fighting over the same 250 million core customers. To get to a billion, you need the ubiquity of a toaster—a simple, standardized appliance. That’s a vision of gaming as a pure service, with hardware becoming a low-margin, commoditized window into it. Sounds a lot like the cloud gaming future we’ve been hearing about for a decade, doesn’t it?
What It Means For Players (And Makers)
For gamers, a universal format would be a dream. No more choosing a console based on which friends have it or which exclusive you can’t live without. You’d buy the hardware you like, from any brand, and play everything. Competition would shift to hardware features, services, and storefronts.
But for developers, it’s a double-edged sword. On one hand, a single, massive addressable market is easier. On the other, they’d lose the lucrative platform-holder funding for exclusives. And for the console makers themselves, it guts their business model. They’d become like PC manufacturers, competing on thin margins. The real money would be in controlling the store, the subscription service, or the format license itself. It’s a complete reinvention, and the current kings have very little incentive to start that revolution.
Maybe the path forward isn’t a grand consortium, but a slow erosion. More games going multiplatform, more hardware becoming PC-like. Microsoft’s rumored next-gen hybrid device points that way. But a true, universal “gaming format”? We’re a long, long way from that. For now, we’re still firmly in the containment field, as Layden puts it. You can watch his full discussion on the Pause for Thought and Naomi Kyle YouTube channel.
