Former PlayStation Studios boss Shawn Layden has shared his thoughts about the games industry’s current state. He is concerned that consolidation will make it “moribund.” He is also skeptical about the Xbox Game Pass subscription model.

On July 27, published an interview with Shawn Layden in the wake of his joining Streamline Media Group’s advisory board. Here are some key points from the conversation.

On subscription services and cloud gaming

While Xbox head Phil Spencer believes that services like Game Pass and xCloud will help increase consoles’ audience, which is now around 250 million people, Layden disagrees with this point of view.

He noted that people buy consoles to have access to the content. On the one hand, cloud gaming services might eliminate the need to buy hardware to play games. On the other hand, there is no decent infrastructure for this type of services.

“It’s very hard to launch a $120m game on a subscription service charging $9.99 a month,” Layden explained. “You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment. That’s why right now you need to take a loss-leading position to try to grow that base. But still, if you have only 250 million consoles out there, you’re not going to get to half a billion subscribers. So how do you circle that square? Nobody has figured that out yet.”

On consolidation and growing competition

According to Layden, development costs double with each generation of consoles. When new consoles hit their prime, games budgets might surpass $200 million, so it will be hard for most studios to produce AAA games.

That’s why many companies are now moving towards consolidation. However, Layden thinks that this process has many downsides.

“Consolidation is the enemy of diversity in some ways. It takes a lot of playing pieces off the table as they grow into these larger conglomerates,” Layden said, adding that it takes the variety out of the marketplace, which is “going to make the industry moribund, and it’s going to create a world of sameness.”

In order to compete and survive, game companies have to produce endless sequels and make titles of only certain genres. According to Layden, experimental games don’t have a chance to come out on stage in this era.

“That’s bad for the industry and for fans,” he said. “Over time, that leads to a crumbling of the games industry if we just keep talking to the same people and telling the same stories in the same way.”

You can read Shawn Layden’s full interview here.