With a straight face they responded to my objection that i would get access to all their PC game catalog and a limited-discount for consoles.
I still laugh when i remember that conversation.
So my answer to HR's answer is:
If we offer industry standard pay for games companies, we get industry standard hiring crisis and candidate quality, as seen at other games companies. Have you researched hiring success at other companies and not just salaries?
Experience suggests the answer to that from HR would be cultural inertia though, so it's not really them you'd need to persuade. It's a strategic decision for the company leaders, whether they think it's worth spending more to attract hires of the type who get better offers elsewhere.
Individual HR people may not all be critical thinkers, but HR people do salary research and keep up with trends in hiring. They have their own professional communities where they discuss this stuff. Even if they aren't all individually doing it, some within the HR communities look at such things and talk about it with others. They use this to advise each other and their execs if nothing else.
HR industry groups could, as a body, look into whether "the industry standard" is getting hiring results as well as employee churn, satisfaction, and company-reported satisfaction with their hiring outcomes and make that information available to HR people and then to whomever needs to take it into account in strategic decisions.
I think that statement is almost certainly false.
Offer better pay, conditions and interesting work that has career prospects for the people when they leave, and make it known you are doing this, and I think you will have plenty of interested, good candidates.
(Unless you make crappy games infested with 15s gameplay alternating with 30s brain-polluting ads, and that's for the people who paid for the "ad-free" feature. I jest not - I just turned down a recruiter for a games company looking for someone in a senior role, after I researched the company and the first few reviews I looked at showed the games fit the above description. I copied the reviews over to the recruiter and said this this is why I could not imagine myself working there in a salaried role.)
No, the main and only problem is pay, and it all stems from the fact that there are hundreds of applicants willing to apply for junior positions, some of which I am certain would literally chop their own leg off for the opportunity to work in video games - if it was legal they would literally agree to work for free. So they all start on some extremely low salary(especially considering that actually, our standard for hiring programmers seems extremely high and I have no doubts that those people could find much better paid jobs elsewhere), but obviously that leads to problems further down the line.
But, just because we have thousands of applicants for junior positions, that doesn't mean we have as many for say Senior roles - those see barely anyone applying, and yes, I'm 100% convinced it's purely because of pay. And the pay is what it is, because HR considers it unacceptable to pay new hires more than what we pay people who have advanced through the ranks naturally(which obviously cannot be a lot, seeing as your starting salary as a junior was so low, even if you somehow through some miracle managed 10% increase every year that's still not a lot by the time you get promoted to senior).