Xbox's decline could give PlayStation greater leverage.
As Xbox continues to implement a comprehensive restructuring plan that will lead to thousands of layoffs and the closing of several studios, Shawn Layden, the former president of PlayStation Studios, expressed hope that Microsoft can regain its footing, stressing that the absence of strong competition will not serve the gaming industry.
In an interview with Kotaku, Layden recalled what he described as the “golden age” during the PlayStation 3 and Xbox 360 era, when the competition between Sony and Microsoft was at its peak, likening it to the legendary matchup between boxers Muhammad Ali and Joe Frazier.
He explained that this competition was not merely a struggle for sales but was a major reason for the flourishing of the entire gaming industry.
“Everyone was either on team blue or team green, depending on which platform they supported. The competition was vibrant and elevated the entire gaming industry.”
He added that each platform was pushing the other to continuously improve, which reflected in the innovation and quality of the experiences players received.
“Each platform pushed the other to get better. The spirit of innovation and the desire to offer something different declines when there is one dominant player in the market.”
That’s why Layden emphasized that he hopes to see Xbox regain its strength, adding:
“I hope Xbox can shine again.”
The report noted that direct competition in the gaming console market has always been between PlayStation and Xbox, while Nintendo has taken a different path in recent years.
Although Nintendo was the major competitor in the early days of the industry, particularly during the Nintendo 64 and GameCube era, it has since adopted a different strategy, primarily focusing on its exclusive games and uniquely designed consoles.
Thus, the Switch 2 does not directly compete with the PS5 and Xbox Series X|S in the same way, and the competition with the anticipated PS6 and Project Helix also appears different.
Despite the technical limitations that restrict some third-party games on Nintendo consoles, the company continues to attract many games and recently secured The Duskbloods as an exclusive from FromSoftware.
The report also cited veteran analyst Mat Piscatella, who explained that Nintendo does indeed follow a different model, with players tending to own a Nintendo device alongside a PlayStation or Xbox or PC, rather than considering it a direct substitute.
However, Piscatella believes that Nintendo may not be as different as it thinks, especially with the growing influence of massive mainstream games like Minecraft and Fortnite that have become impactful across all platforms.
This wasn’t the first time Layden spoke about the importance of competition and exclusives.
Last year, he stated that Mario appearing on PlayStation consoles would be akin to the “end of the world,” emphasizing the importance of exclusive games in maintaining the identity of each platform.
The report suggests that Xbox’s decline is not just a problem for Microsoft, but it may reflect on the future of the entire gaming industry.
With Sony recently announcing it will cease physical discs beginning in 2028, and following a generation many describe as lacking in major releases, an increased dominance of PlayStation in the home console market could give Sony greater leverage in shaping the future of the sector, a scenario many gamers may not want to see.
In separate remarks, Layden reiterates that Xbox needs to clarify its identity, explaining that Microsoft must choose between being a gaming platform or a game publisher, once again stressing that exclusive games have always been the primary engine for expanding the gaming market, not just a means of capturing market share from competitors.
“My goal was not to create games to capture market share from EA or Activision, but to create games that expand the entire gaming market, because the real opportunity has always been in growing this market, not in tak…