Shawn Layden, former PlayStation Studios boss, is building a financing vehicle for stranded AA games. The teams keep their IP. The hard part is that nobody knows how to underwrite a video game.

Early last year, former PlayStation Studios boss Shawn Layden walked into one of the largest investment banks in the country with six partially built games and asked for a triple-digit-million-dollar financing package to finish them.

Instead of saying yes, the bank offered to double the investment. So Layden turned them down. He told them that extra money wouldn’t buy a better outcome.

That refusal is the thinking behind Layden’s latest venture, and at first blush, it seems like a simple idea: Completion financing for video games. But it comes with a big ask from both financiers and game makers: More discipline.

The COVID fattening

In the three and a half years before Layden started building this, more than 40,000 people lost their jobs in the video game industry. Many came alongside studio closures that stranded games deep in production.

Layden's idea was born of how unusually deep those layoffs cut, and how many of them hit people in the process of making a game, not just when a shipped game didn't do well. (Recently, the quality of a shipped game seems to have done little to dissuade layoffs.)

Hellblade: Senua’s Sacrifice (2017) by Ninja Theory

But that seemed to change after what Layden calls the "COVID fattening," a period of time when the game industry was seeing double-digit year-on-year growth, and developers were going on hiring sprees. But once the peak impact of COVID passed, people were playing fewer games and, Layden said, the companies that had fattened up had to slim back down.

The result is entire teams, some of them with access to the source or being granted control of the source for their in-development games as part of their separation agreement.

Clair Obscur: Expedition 33 (2025) by Sandfall Interactive

The proposed solution

Around the time the video game industry layoffs were hitting a peak in 2024, Layden and a friend got into a discussion about the issue.

And Layden's hope is that this new endeavor would fall in line more closely with the old publisher-developer relationship, where a publisher would give money to a studio to finish the game, and then anything made after the game hits break-even is split with the publisher. The publisher supplies a milestone calendar, and the developer keeps control of its IP.

A big part of what Layden expects his team would be doing is not just finding financing but reeducating both financiers and game development studios about what to expect from the relationship.

That lesson comes, in part, from a pitch he made to a large investment bank early last year. The slate was in flux, with games moving in and out. Eight was the maximum. He pitched six.

He went in believing the hardest question was already answered.

Pillars of Eternity II: Deadfire (2018) by Obsidian Entertainment

The bank’s response was to offer twice what he asked for. Layden turned it down.

The idea has a lot going for it, starting with Layden himself, who spent more than three decades working his way up Sony's corporate ladder from communications to chairman of Sony Interactive Entertainment Worldwide Studios. He left in 2019, and went on to serve as a strategic advisor for Tencent Games for nearly two years.

He also notes that the team working on this idea has more than 100 years of combined video game experience. And, of course, there's the current state of the industry. An industry that could use some help picking up the pieces.

While Layden isn't ready to discuss most of the details of this new endeavor, he did name one partner: Gabriel Pessah, who spent five years at PlayStation as senior director of strategy and corporate development and as Layden's chief of staff.

Building a portfolio

Layden is also being selective about the kinds of games he wants to help find financing for. Specifically, they're mostly single-player narrative games. And Layden has a lot of experience judging a game's potential or seeing it judged by some of the best in the business.

In his mind, having discipline during the evaluation processes is key to the success of a game.

He saw that firsthand while working under Akira Sato, who helped form Sony Computer Entertainment Inc. in 1993. Layden said Sato had a rule not to speak during the monthly producer presentations so he wouldn't sway the room. He listened, and at the end he said one of three things.

Those three responses were "OK," "But where's the fun?" and "It's OK, but it doesn't smell like money."

When Layden started running Worldwide Studios, he also had a very straightforward rubric.

PaRappa the Rapper (1996) by NanaOn-Sha

That means all games under Layden had to tick one of those boxes. Under that rubric, PaRappa the Rapper was a first, God of War was a best, and a must was supporting PlayStation's hardware decisions, like creating games for the PlayStation VR headset. "Because we support the platform," Layden said.

Nowadays, when Layden judges a game, he relies on three things that are super important to him: Character, story, and world.

While the game industry is packed with live-service titles that can rack up millions of gameplay hours, Layden said his sweet spot is maybe 22 to 28 hours per game.

"They are quality hours," he said. "They are hours that you don't put the controller down. You're completely absorbed, and that's the kind of market I'm looking to go back to."

And while Layden calls himself a "console boy" and says he always goes back to the living room to have his gaming experience, he would like the games he finances to ship on PC too. Mobile is the only "pond" he doesn't swim in, he said.

Psychonauts 2 (2021) by Double Fine Productions

The underwriting problem

The harder question is how you underwrite any of it.

In film, the late-stage money used to close the gap between what a production has raised and what it needs to finish is called completion financing. The concept is a good match for gaming, but structurally, film production differs significantly from video game production.

Film's version works because of a second instrument, one that is standard practice in the movie industry: the completion bond. 

A guarantor sells the lender a promise that the movie gets finished and delivered, typically for three to five percent of the budget, backed by a contingency in the budget itself. In exchange, the guarantor gets daily production reports and the contractual right to take the film over, including firing the director. 

The bond is underwritable because a film has a locked script, contracted pre-sales that pay on delivery, and decades of performance history on the people running the set. Games have none of that. There is no locked script, no pre-sale that pays on delivery, and no meaningful way to take over a half-finished game and have anyone want to ship what comes out.

Layden knows it isn't a clean fit.

Ultimately, the success of this endeavor will also come down to Layden and his team striking the right balance between a financier's need to control the timeline and a game developer's need for creative autonomy.

Gravity Rush 2 (2017) by Japan Studio

What’s next?

Details about Layden’s venture remain scarce. "I don't have a name, date, place, financial amount, those sorts of things," Layden said.

And when the official announcement for the venture will happen is not entirely clear, though Layden does have a self-imposed deadline of sorts.

It also hinges on creating something for video games that currently doesn’t exist.

Shawn Layden is a games industry veteran who spent more than 30 years at Sony, holding leadership roles across PlayStation in North America, Japan, and Europe before serving as Chairman of Worldwide Studios. He now works as an independent advisor, helping companies navigate the evolving global games and entertainment technology businesses.

Interviews, copywriting, editing, and article publication prepared by Brian Crecente, Kirill Tokarev, Lisa Sirlin-Hall, Viktoria Steshina, and David Jagneaux.