Are we just reverting to the mean after years of zero interest rate policy? Would love for folks with experience working in tech in the 90s and 00s especially to chime in.
I assume a similar analysis exists somewhere for the big names in gaming that financial engineers have similarly destroyed other formerly-great companies; ZA/UM comes to mind as one example.
Blizzard
The others are all well-known acquisitions or acquirers, but I’m not seeing a clear link to my point. Certainly they’re stellar examples of ‘greed minmaxers’ but not so much of ‘profitable incompetence through financial engineer takeover’ like happened to, say, Toys R Us or Wizards of the Coast. Perhaps you could explain in more detail?
It's not all the studio head's fault in some of these situations. It was larger studios/publishers like Microsoft Studios coming in and buying them out. The consolidation of these studios is what burned them.
> I remember having a call with a business partner just before Monument Valley came out. And they couldn't get their head around it. They're like, 'Right, so it lasts two hours, it doesn't have in-app purchases, it doesn't have leaderboards, it doesn't have adverts... Well, why are you making this again?' No one could get their head around it.
That their unicorn became real is in sharp contrast to how their business leadership thought it would go, and then they launched two sequels that were no more successful than the second and third Matrix movies. We were lucky that MV escaped containment. The studio was not threatened by mergers or by AI; it was threatened by bad management, who wanted to engineer the most financial profit rather than simply shipping a good game.
Yes, Ubisoft will fuck over everyone they buy. But that’s because Ubisoft is badly managed; consider the Crystal Dynamics Tomb Raider trilogy, widely considered excellent and preceded by their acquisition. Yes, it’s easier to place the blame on AI. But that’s because bad management is often greedy and miserly, and AI fits those desires like a glove.
This is no defense of Ubisoft or AI fucking over everyone, and I sure do loathe them both, but consider my point about Bungie in these terms: They took their own reins and mismanaged themselves into the ground, with a merger halfway through their decade that did not noticeably alter how they mismanaged their business. Bungie spent ten years doing strange financial engineering with multiple funding sources (Sony was merely the last one), locking the color palette picker behind cosmetic transactions, selling season passes and DLC, launching an entire sequel that bombed in year one because it removed the addictive loot box mechanism, and going so far as to delete one entire half of their world-class game rather than just refactoring it.
That’s bad management, and they’re a poster child for the entire gaming industry as a result. The financial engineering I’m blaming for this collapse, for these shambling monsters we’ve created — well, some would call it profiteering, but fintech has finops and findev, just like any other tech industry, and they engineered this outcome, so I’m simply giving them the courtesy of name that they deserve.
The thing to realize about the SV executive class is that they have constructed a closed ecosystem around them where they only talk amongst themselves and a small number of supporting actors who say what the execs need to hear. A CEO will talk to other CEOs he will not talk to his skip reports. Alternative viewpoints or dissent are not part of this social circle, and despite their 'conterarian' self-image, there's an immense amount of social pressure to conform.
You can can see hints of this outside - for example this site used to see YC folks as regular commenters, but no more. Twitter was changed so that only views favoured by Musk show up prominently in replies. These people certainly do not encounter normal people in their day-to-day lives.
In this information environment you see extremely rapid horizontal spread of weird, stupid and esoteric ideas - one CEO does a layoff, all of them will do layoffs. One turns MAGA, they all turn MAGA, etc. One guy starts yapping about some snake oil, they all yap about snake oil. There no negative feedback loop there.
As for the layoffs, that one was to be expected, a correction after the insane hiring sprees during the ZIRP phase.
As for MAGA... well, Trump made it clear. Either you walk the line with him, or you get screwed.
My point is that its hard to ignore just how in-tune and well-coordinated all these people are, and I don't think it's a coincidence. If CEOs were responding to actual political, economic and company developments, you'd see far more diversity of opinion. Some you see their companies are growing and profitable and wouldn't jump on the layoff bandwagon. Others may ask "Don't we need rule of law? What happens when the other party gets in power?" and fight the administration in courts etc.
The overhire during ZIRP was insane though - in total it was a good nine years of zero interest rates, and between the first period (2008-2015) and the second period (2020-2022) interest rates weren't that high either. Companies battled each other hard even for people who just went through a few weeks worth of bootcamp, just to make sure the competition didn't have access to them, even if there was not much productive work that could be assigned.
And that group is where the layoffs really hit hard: people with basic training, relatively little investment both of the company into the workers and from the workers to the company and, most importantly, a skillset / allocation that just lends itself heavily to being replaced or at the very least heavily augmented by AI.
On top of that... "good financial performance" doesn't mean the balance sheets can't look even better. With C-level boni being tied to stock performance or "efficiency gains" KPIs, it's no surprise that many just look at their paycheck first, the long-term health of the company second.
> You see this in what people say about AI as well - one year everybody will be jobless in 5 years, next year "actually jobs are gonna be ok".
I don't have much hope left for anything in the field of "knowledge work" and for most of "creative work" either. Let's be real, the wide masses don't care they're being force fed with AI slop, as long as they have some brainrot to doomscroll in the evening. The only jobs relatively secure for now IMHO are the trades and wiping the arses of dying boomers in care homes. For the former, robots lack the required dexterity and force feedback, and for the latter, maybe the Japanese are willing to accept arse-wiping robots, but I heavily doubt this will be the case in Western countries any time soon.
> Some you see their companies are growing and profitable and wouldn't jump on the layoff bandwagon.
There are companies left that are actively growing and not making shovels for the AI gold diggers? Huh?
> Others may ask "Don't we need rule of law? What happens when the other party gets in power?" and fight the administration in courts etc.
A rare few, yes. But most have given up and went for appeasement instead after the first ones got mergers disrupted or otherwise punished.
This doesn't happen anymore, it's actually relatively good at sorting bad comments to the bottom now. The current problem is it's full of wannabe LinkedIn influencers with "Building for AI agents in business in public" in their profile using LLMs to reply to everything.
It didn’t used to be this way - say circa 2006-2015 you had so much more diversity in the style and ideas of leadership. Eg early Dorsey, early zuck, all these other ceos at that time trying all kinds of wild and whacky ideas of how to run their companies. I’m not sure why this convergence happened, but now everyone’s singing from the same hymn sheet, it’s anti-innovation, and I hate it.
If you mean the games industry, it was always poorly run. I worked in games in the 90s and 00s it was a cottage industry of nerds, many of whom had success with an 8bit game in the 80s (where they did everything: a one person team), to then have to run large teams of devs/artists/designers/etc without any leadership experience and more complex hardware.
Happy days :D
I was just recently reading about the history of the Ultima series and you’re describing Richard Garriott. As games were pressured to be bigger and prettier and use 3D graphics, suddenly the lack of managerial experience (partly) caused the later games to spin out of control and they were forced to release a series of bad titles that brought the whole franchise down.
It’s busy really interesting how fast that industry changed, and the massive scale involved compared to just 10-15 years prior, depending on where you measure from.
This generalizes to the industry, not just Origin.
Corporate game dev uniquely seems to attract incompetent middle and upper management with extreme egos.
I guess because the people who scramble to the top of the pile in an industry with an endless incoming supply of naive new workers tend to be those who spend most of their time networking and sharpening their knives.
I replied in the comments [2]
It says 1997, but dev started in ‘95, I joined in ‘96.
I was pretty gutted at the time, I was just 21 years old and had the big dreams of working in games. It soon becomes clear that very few titles succeed. Luckily I had a few wins on the way, but the lack of professionalism really did get tiring.
[1] https://www.unseen64.net/2020/11/16/lunatik-pure-entertainme...
[2] https://www.unseen64.net/2020/11/16/lunatik-pure-entertainme...
We don't have leaders, or people that can make hard decisions, or think for themselves. They all follow the same book of the day business trends. If you do think outside the box you aren't a team player and are rocking the boat.
BYD will dominate, not GM.
I did tech consulting early in my career, so got to see a large number of companies as I was working for them. Some good, some bad.
There were a few reliable characteristics about the good ones though:
- Distilled corporate culture into learnable points, ensured everyone learned those, and then reliably used and referenced them in the context of everyday business decisions
- Centralized strategy, decentralized tactics. Execs cane up with strategic targets, then implementers were free to design their own solutions to deliver those
- Had an expectation of employee-initiated internal mobility (team switching) and used it as a management evaluation signal
- Had a strong internal process for recognizing when they promoted / hired a bad manager (i.e. they made sure a bad manager with a good team didn't look good)And it comes from the top: the CEOs are not caring anymore, so their lieutenants are not interested in doing any work either. So the companies get turned into fiefdoms without any central guiding direction.
One startup didn't go too far (folded after 3 years), one grew to ~20 people, lasted for maybe 20 years total, I left after 2 years during the dot com crash.
Both of the medium companies are bigger now (I'm still working for one), and have generally positive outlook. I mean, you can't consistently be #1 in your industry when there are 2 companies with combined > 50 or 60% market share and roughly equal - some quarters, your competitor's 2-3 year plan will finish and deliver better for that quarter than your previous (now "old") product that is in the middle of a 2-3 plan, etc..
So they are out there, but it's RARELY in the "high profile" (FAANG/whatever) "move fast, break things" companies that you hear about a lot or that everyone wants to work for.
A friend said <ride sharing company> was like Game of Thrones come to life in a corporate setting, for example. Yet, some people got rich off it, I'm sure.
Companies will do what Wall Street wants (Wall Street likes layoffs), and at a certain level, they don't want unemployment to get too low, lest their workers gain too much leverage.
So, the game development industry really hasn’t changed that much. But the way we talk about things certainly has changed.
Generation X had a lot of bad things written about us, but we could write and we could think. We were also significantly tougher than the modern generation.
Things weren’t easy and running companies had always been hard. We didn’t think in terms of ‘employees just collapse’ because we were tough enough that that would have been silly. A few may collapse and that sucked for them, but for the most part we did our shit and lived our lives. We didn’t expect lives of leisure or for companies to speak to our personal missions. We had jobs and we had lives.
There were massive layoffs back in the day too. They sucked. But employees didn’t collapse, the world kept spinning and honestly, having been through those years it’s very very hard to relate to the young now. Younger generations do not have a monopoly on struggling or on shitty bosses, but you sure talk about them too much.
So I think decision-makers are seeing layoffs as win/win.
There has been a growing trend over the past couple of decades to outsource more and more game development to cheaper parts of the world, trending towards keeping only a small core team in the home country, supported by for-hire remote developers in Eastern Europe and Asia.
The other big advantage to work for hire is not needing to keep a large team of specialists employed throughout development, when they may not be required for all of that time. Keeping everyone fully utilised has always been one of the big challenges for game studios.
Ironically, AI may actually reduce the amount of outsourcing that a core team needs to do (though a lot of it is content and AI is still pretty bad at generating content).
It's honestly disgusting that governments don't protect their citizens from this. Companies do this because it saves them money. Tax the hell out of them for every outsourced worker and this will all go away.
What happens next (eventually...) is the bubble popping, which for AI will mostly look like established companies pulling back on AI hiring and especially cutting AI SaaS solutions unless they are clearly providing value and improving the bottom line.
What we think of as quality will come in the next phase, once the infrastructure woes get sorted out. Web 1.0 was pre-cloud and websites crashed all the time, no one could handle traffic spikes, etc. After a crash, stability becomes a market advantage, i.e. why Facebook won and Friendster died.
There is an insatiable appetite for increasing profits. Eventually that means raising prices and/or cutting costs and the most significant cost is labor.
Game studios can only sruvive and keep excelling as long as they can maintain their culture and key talent and avoid getting finance people and accountants in charge. This is one reason why acquisitions usually mark the beginning of the end.
We're coming up on the much-ancitipcated release of GTA6. People might say that Rockstar has thus far avoided this rot but I kinda disagree. What made GTA magic for me was the social commentary and satire. I personally thought GTA5 lost its soul. Every previous GTA game I'd replay just to have fun, even if it's to do dumb stuff like causing mass pileups and explosions on the freeway in GTA:SA. I can honestly say that I never once played GTA5 again after finishing the main story and I also almost quit before I did. I have zero interest in the online crap but it's a huge cash cow for Rockstar.
So I imagine GTA6 is going to be visually stunning and I'm sure many will enjoy the new era of online gameply but I am fearful it will be even more soulless.
So, back to your point, I think the real problem is that the game devs need to own the studio. That's the only sustainable model. One could even call that the workers owning the means of production.
They've never been well-ran, but the laws of physics and economics put hard limits on the amount of stupid bullshit that they could produce.
Now that those limits have been largely removed, an exec at the head of a company in the post-AI age is a chimp with a machinegun.
Anything they ask for can and will be built.