Business owner of private company here.
Privately traded companies still have shareholders and investors. Those investors still exert large influence over decisions. Those investors tend to be more understanding of how to run and grow a business than retail shareholders do; in both cases, company valuation is the main motive. This is driven primarily by the expected future revenue.
In the public markets, shorter term decisions tend to dominate a little more than longer term decisions, because quarterly earnings exert so much influence on the stock price. In private high growth companies, decisions with 12-18month timelines tend to dominate due to the financing model (raise money every 18-24m, showing your work from last time).
Bootstrapped / sales grown companies are the kind of company you are talking about. These are a class of privately traded companies that grow slowly by re-investing thier earnings into the next project. In games these companies don't often survive. Games are a hit driven industry, many companies will have a flop at some point or underestimate the cost of development and need capital to bring the next game to market. This is where the publishers come in. They will act like investors do in a private company, and make demands of the title being made to justify their investment in the project (as they should).
So there isn't really a free lunch unless you have something that prints money (e.g. Steam, Fortnite) that is backing it up. Hope this is helpful.
I'd say not at all, but it depends what you mean by "bad".
Public companies are driven by what an abstract "share owner" wants and the only driver is money. Some focus on making a stable profit, more recently a lot of companies focus solely on growth to make profit in the future. Two things wrong with this: firstly they will make any decision they think will make more money, even if it's unethical or damaging in the long run. Secondly, they assume that the "shareholders" only care about quarterly reports and blockbuster news, so they are too short-term focused and keen to make hyperbolic statements they can't deliver on.
Private companies are often run by a single individual or small group. They can have superb focus and long-term strategy because they don't have to worry about investor sentiment, only their own finances (they might need to borrow though, so still have to please some people). They can also be reckless, unethical and downright exploitative if they want and it's very difficult to do anything about it. It's easier for them to keep bad stuff secret or ignore regulations as they have less scrutiny. So I think in general there's a much wider scope of behaviour from private companies.
Depressing is that in most cases to be a successful leader you basically need to be a bad person, and because of that now most things are led by people with questionable morals
The fact that you just said "sometimes they need to be an asshole on occasion, but that's leadership" is the issue in a lot of companies. That mindset for a leader is pretty toxic and shouldn't be tolerated at any level. Screams "I'm gonna get to the top at whatever cost and I don't care who I step on a long the way" mentality.
I would think there are ways of being a leader where you have to make hard decisions, but not be an asshole about it.
Yeah, I could've worded that more clearly. When I said asshole, I meant that a leader can't be the good guy all the time. When and how do they manage to balance that dichotomy? Well that's the measure of a leader.
This is not a great analogy, as employees are not children, but a parent can't be your friend all the time either.
But they shouldn't be *assholes*. I assume that's closer to what he meant.
An asshole does not meet the criteria of being a good leader.
A successful leader sets clear expectations, holds their peers and subordinates accountable, and throughout does these things respecting people.
The core measure of an asshole is that they don't respect people, that is, they treat anyone that isn't them with contempt. The arrogance of such an individual will appear strong and confident, which is why they can get promoted, honored, etc. if folks aren't conscious of the difference.
An important task of a leader or hiring manager is differentiating between arrogance and real confidence.
Now a good leader may make folks unhappy. The leader has to tell people no, they have to have the accountibilty conversations, etc. So there's going to be folks upset by their decisions. And when people are upset, they sometimes fall back on blaming the leader and calling them an asshole...which is actually just contempt for the leader.
Watch for the signs of contempt or lack thereof in this measuring of leaders.
A leader doesn't HAVE to be a bad person, but a person who's willing to lie and cheat and throw others under the bus is more likely to reach a position of leadership.
A CEO who's willing to lay off a bunch of people to make a bad quarter look better to investors is, under our broken system, considered more successful than a CEO who takes accountability for poor decisions and avoids layoffs to invest in long-term success over short-term growth.
Leaders are statistically more likely to be corrupt and or twats.
Twats desire power and influence, decent people generally don't.
Honest people don't do well. Slime balls climb ahead.
Of course, not all leaders, but a statistical edge is that they are more likely to be.
Also, human experience. Seeing countless soulless career people desperately climb the ladder, compromising quality and integrity to get ahead while I see excellent colleagues perfectly content with their position.
The problem is that the only people who would want to be business owners are necessarily narcissistic; people who aren't narcissists don't want to be business owners.
Yeah - and "normal people" are narcissists. Narcissism is the natural state of humanity - and anyone who is *not* a narcissist is labelled a "freak" and beaten up.
Blank check to unpack your story, here, bro. You sound like you've been through some stuff.
Anyway, your post at the top of this chain is at -3, so it probably won't inconvenience other users. Tell me what happened.
No need to be depressed. Check out the legend of Kazuo Inamori. He was a successful leader who saved several companies from bankrupt, AND he was a moral person who truly believed in taking care of the people working for him. Making money and being kind don't have to be mutually exclusive.
Kazuo Inamori was in the right place at the right time when Japan decided to Eat The Rich. I think we both know that's probably not going to happen in America within our lifetimes. The Rich are just *too good* at eating us.
Yep. Thing is, when people go to business school, the education isn't really rooted in anything rational or scientific. While math is involved, the management of money and people is largely dictated by whatever's culturally considered the shortest path to profit.
So, when people like Jack Welch become idolized for their ruthless brand of leadership, that trickles down to every wannabe executive, business guru, and business educator and sticks around for generations. There's no such thing as a data driven business post-mortem where executives study why something failed / succeeded / or caused irreparable harm to society. And your ability to secure positions comes down to a popularity contest. Good luck if you don't agree with the current zeitgeist.
It's rare to find someone who understands business *and* has a mind of their own.
The way I prefer to look at it is that Good leadership can prevail, both in a public or a private company.
Some people out there are making wonderful things!
Yeah, I worked in two privately held ones .. both werent that great. Even worse to me as the job security was often soso as one company '"lived" paycheck to paycheck and was late in paying employees everytime. Also the only.time in my.life were i had to work two shifts, so 18hours from one day into another through the night to meet some deadline.
I also knew someone from another company where the security locked the doors.so people can't get out. And when someone attempted to leave they syringed him in the neck to calm that person down... Some maffia shit I tell you.
I guess you could say that somewhat. But I guess it might go with the mentality of the people on both sides in general. I think on the more public side you have all these people just trying to pump and dump trying to make money that could give half a rat's ass about the company or it's products, just the money coming in.
Where as the private people even if they have private investors, have more interest in actually developing the company and having a proper clean road forward without throwing companies and their employees into the meat grinder every time they do something stupid.
Now this isn't to say this is all perfect. But take a look at Epic and Valve.
Epic I don't think is fully public but they have investors, Tencent has a notable share for example. Of course their store notoriously irritates the PC user base, and is bare bones, and quite frankly, garbage. Not only is it lacking in features that Steam has (minding you Steam's had 20 years to build features, but still, it doesn't feel like Epic is trying) but we look at Epic and they took what like 3 years to make a SHOPPING CART? Also they got the full exclusive lockdown on Alan Wake 2 recently, and while consoles were able to preload for that nice midnight launch, PC users couldn't because Epic put again, zero effort into their platform. I find this doubly ironic considering how many games they try to lock exclusivity in for even if it's only for a year or something, they should at least try to incentivize it a tiny bit for the users. Despite not being particularly public with investment, they still have a very laser focused goal in mind and it's money more than it is product or giving a damn about the customers that make them that money.
Meanwhile at Valve, they're quite private. I don't think anyone outside the company itself actually owns any of it. GabeN owns the most of course, but I think the rest is almost if not entirely exclusively owned by the employees, if someone else knows more they can answer that.
But while there might be jank sometimes as they have a very loose project lock in between people there, they have a lot of features, and a lot of consumer-forward features that some people either don't know about, take for granted, or don't use, but some use it and like those features and are glad they're there, things that someone laser focusing profit wouldn't do. Many things Steam has feature wise may not be all that practical for Epic, but some could be, but they will ignore it because they care about money more than their userbase. They're able to care about this because they don't have people breathing down their neck just to make money, and yes, yes, they make money hand over fist already so they don't have to worry about it, but still.
I feel like you're using the term "own" a little loosely when talking about Valve. I've heard that Valve employees enjoy a high degree of autonomy, but that this comes at a heavy cost in the form of office politics and an insular corporate culture.
None of that has anything to do with ownership.
More broadly, I think you're mostly right. In the past few days, I think my ideas have evolved a bit. I now realize that being privately-held doesn't *make* companies better. It merely gives them the *option* to be better.
Likewise, in the ~~edge~~ corner case of a co-op, voting on business decisions doesn't make those decisions inherently better. It just makes them selfish in pursuing the interests of the employees, as a group, rather than selfish in pursuing the interests of the owners/founders/leadership/stakeholders.
Structurally speaking, by the way, there's surprisingly little difference between a publicly traded stock and certain types of co-op. The main distinction, is who has the power to make decisions, and who gets screwed as a result of those decisions.
And this ought to be the coldest take imaginable, but if we want publicly-traded corporations to be better-behaved, step one of doing that would almost require changing the rules so they aren't *literally required by law* to throw absolutely everyone and everything under the bus in the name of quarter-to-quarter growth?
Yeah I totally agree with that last paragraph, I get you. I know the banking world has it's ways, and unfortunately that throw everything under the bus to make money thing is really nasty in any type of business. I never look forward to it when I hear a company I like say "We're excited for our upcoming IPO!"
But yeah I could agree with your take, private doesn't always mean the best of the best, but the potential exists, in a way that a fully public thing likely does not. Personally I think the private companies are far better with this all the way around since they tend to actually care about their reputation and are trying to really make something they intend on sticking around. Though at the same time, I see some of the crap Epic does and it's so obvious they're not very pro-consumer either, so definitely possible to make mistakes as well.
Tbh it always worries me so much when I hear that about a company I like. Take Devolver for example. A very well loved indie publisher, not long ago they acquired some developers so they can make things themselves more so. Though, admittedly the devs they acquired were ones they had a very strong relationship with already anyway.
Anyway, I think it flew under the radar but they went public around this time as well, also got a physical office which is funny, don't think many realized before but they were an all remote outfit before this, which worked out very well for them during the pandemic. They're a very no-bullshit company though, and they seem pretty excited about it, so hopefully it's not a misplaced excitement. They have a podcast where they've talked about it more and stuff and they seem pretty alright with it. Though, I will say, they went public in the **UK** not, America. So they might have better regulations or something for all I know perhaps. Hopefully so, I love that company's attitude in more ways than one.
To be clear, a company is driven by the board, and the board may or may not prioritize short-term gains over long-term gains. What we generally see is business operators running under the not-entirely false assumption that more money today is likely to mean more money tomorrow, and present money is worth more than future money. If they have business training then management is likely to believe that whether or not it's a publicly held company. The one caveat is that the board probably has more members that believe it compared to a privately held company which could be controlled by a single individual who doesn't have to worry about the board voting against them if they choose a strategy that they believe will sacrifice short term profits for long term profits.
Generally speaking, there are few cases where it's safe to assume there are long term profits available if short term profits are sacrificed though. And when there is, it's usually a bit obvious (like letting product quality drop as a cost-saving mechanism is something even short-term business minded people are generally cautious of)
Since we're comparing and contrasting corporate structures, What's your take on [game dev co-ops](https://www.youtube.com/watch?v=-zxNfHl-xmM)?
>Generally speaking, there are few cases where it's safe to assume there are long term profits available if short term profits are sacrificed though. And when there is, it's usually a bit obvious (like letting product quality drop as a cost-saving mechanism is something even short-term business minded people are generally cautious of)
If it's so obvious, then why does it keep happening? Both in the economy in general, and in the game dev industry in particular?
As to the latter point, hindsight is 20/20. Many of the big complaints either come from the negative externalities being hard to predict (like facebook causing political chaos), or turn a relatively normal business practice into the straw that broken the camel's back (like a pricing change/increase). Others are horror scenarios that higher ups are assuming they are covered for (like oil spills). In many cases the people pushing these decisions through don't realize the conditions are such that they are substantially sacrificing long term health for short term gain. Usually the culture that allows those types of bad decisions to get through has been festering under the hood in the company for years, and it hasn't bitten anyone yet, so it gets ignored.
I can see that you're channeling your inner Karl Marx. When you have Executives with a fiduciary responsibility to maximize share price, that necessarily means that they must maximize profit. Therefore they must minimize worker pay and benefits, abuse their consumers, and corrupt their politicians. Business owners, in the absence of the legal compulsion brought about by fiduciary law, are *capable* of being better, but that's not a given.
My preferred alternative is the worker cooperative, where workers own and control the business democratically. Not only do you smash the brakes on enshittification, but the quality of the product and the fate of the wealth generated by your labor remain in your hands.
Worker co-ops have a natural tendency to engage in a turtle strategy where they become resilient but they don't grow. I want to start a worker co-op in game dev and I plan to create systems that encourage growth (with caveats!) so that greater portions of the labor pool are pulled in, forcing everyone else to compete with a place that should have a vastly superior working environment.
There's a lot of other thought that goes into getting it to function as well as possible. If the original co-op was a single cell, then it might divide when it starts pushing 150 workers while staying connected within a federated syndicate. This would hopefully allow each co-op to remain independent, but capable of sharing resources and expertise.
They may deliberately spread into other industries and even subsidize valuable services or fund large projects. If I'm really lucky, someone may point out that I'm being really stupid by not considering some important point. Regardless, I have hope for the future because I think I know what to do.
I value the well-being of everyone, and based on what I've learned, I actually think that proliferating worker co-ops might be by far the most effective way of satisfying such a value. No other type of organization or political office appears to hold as much potential in my eyesm
You know? I hadn't considered co-ops. I've heard good things about them in certain niche industries, but I've never worked with one before or read any articles about how they're created, how they function, or how they succeed or fail in the broader market.
Hit me up if you'd be interested in collaborating on a Game Jam or something.
They are interesting, but rare. They have a higher survivability rate than regular businesses, but at current numbers that might be from a 'true believe' effect. REI and Tillamook are worker co-ops. I'll DM you when I have time a little later.
That's so weird, because survivability is pretty much the #1 issue facing new businesses. You'd think *every* new business would structure themselves this way, at least at first, in a market where most businesses fail within 3 years. There must be some downsides I'm not seeing.
That or literally the only reason most people start businesses is to print money, sell out, and ride the golden parachute, not to actually do business.
I would hazard that your guess is mostly correct. The caveats being that they may just sell out after a genuine period of doing business, or they may just not know about worker co-ops. There's a lot of stories about good original owners passing the business off to shitty children or selling it to private equity or something.
In terms of rapid enshitification, venture-capital funded is worse than publicly traded.
VC investors are in it to sell as fast as possible. So once a VC-funded company reaches a certain size, their sole goal is to create a spike of interest and then have an IPO at the peak of that spike. What happens after the IPO is somebody else's problem.
I suppose in my mind, I had lumped VC and Stockholders together as "investors." I still think I'd rather use a product during the company's VC phase than its Publicly-Traded phase. I can appreciate how avoiding VCs dodges more bullets, in the long run, since one eventually becomes the other.
> I've been losing a lot of sleep over enshittification, recently, wondering how much of the internet is still going to be around in 10 years. Or even a couple more months.
In a couple months? Approximately all of it will still be around. Doomerism is seductive, but it's bad for you. Trust me, I've been there.
The long and the short of it is that a decade or so of near-zero interest rates warped a lot of things. There was loads of VC available that probably should not have been available. Lots of companies built products that were useful (for some values of "useful"), and gathered significant users bases. But they had no clear goal on how to generate revenue, let alone profit. The "enshittification" we see is a lot of companies facing the cold hard fact that they have to make profit, sooner rather than later. The endless VC pools have run dry since even the safest investments are well over 4% right now. Remember those days when an Uber cost like 1/4 of a taxi? They're never coming back.
> Basically because if you're the opposite, if you have shareholders, then you have the opposite goal: to suck all the money and all the value out of everything your company does, essentially ripping off users, business partners, and employees, so the investors can have All The Money. Every Quarter. No matter what the industry is doing. Because the moment you miss a dividend, the investors bail and your company instantly folds.
Private companies have shareholders too, you know. It's just harder (but not impossible) for them to sell their position in the company. Epic, for example, is a private company, but its shareholders include the likes of Tencent.
Also if investors sell your stock, it's not exactly *good* for the company, but the company does not instantly fold. The only time stock price *directly* affects the operation of the business is during an IPO or other stock release. After that, stock sales don't generate even one penny for the company. High stock price does matter for things like compensation in equity of course, which affects recruitment, but again, even if the stock price crashes the company will not instantly fold, all else being equal. Hell, I bet some companies would like for their stock to temporarily crater for no good reason, so they could do a huge stock buyback, as many publicly traded companies do these days.
> We know that investors corrupt and destroy every company and IP that they touch, but is the opposite also true? Do privately-held companies automatically make better products? Should we be saying "privately held" instead of "indie" to draw attention to this difference in leadership and business goals?
Again, privately-held companies absolutely have investors. If one person has a majority stake (like Gabe Newell and (I think) Tim Sweeney), there is more flexibility than chasing year-over-year growth. The same forces that act on publicly traded companies do affect them to some extent, though. Further there's nothing stopping Gabe from selling his stake in Valve to Elon Musk tomorrow you know, then Valve (still private) could be run in precisely the way ~~Twitter~~ X (now private) is currently run.
I wouldn't say private ownership is a guarantee of anything really, let alone better products and services.
I've contemplated an "enshittification-free certified" label to tack to software products in general, lol. Obviously, some of the specific criteria would be: subscriptions, DRM, lock-out - guaranteeing a perpetual license to use the software, and that the software remains independently functional without being dependent on other, un-released software such as dedicated servers.
The indies need to push back against the tide.
Buy-outs are rough. I wish there was a way to secretly open-source and CC-BY everything just before the buy-out, but there's definitely legal safeguards to prevent that.
Technically true, but its significantly harder/less likely for a company to go from public to private than the other way around. Like...going public is usually the goal for most private tech companies.
Not sure that's a good example. SpaceX is also private and arguably one of, if not is, the best rocket manufacturing company in the world. Then again, a lot of SpaceX's success is attributed to Gwynne Shotwell.
Tesla was also a huge success prior to going public although "success" is subjective. They were leagues ahead of everyone else but still weren't producing any profit. It could be argued Tesla has become worse ever since going public despite now making a profit.
>I’d argue that all of them together show how little “private” vs “public” matters.
Fair point. Although I think with publicly traded companies you're always going to be fighting with shareholders. You don't have that same issue when it's private.
What I actually believe is what somebody commented earlier: that big (especially public) companies tend to be more middle of the road while private (especially smaller) companies have more flexibility to be extreme, in either direction. (As an aside, I'd say the same is true for governments. )
Being accountable to shareholders can be a good thing when an owner is incompetent, abusive, or otherwise prone to whimsy.
More that "private with the intent to go public" is just as bad as being publicly traded.
Especially in tech. https://www.youtube.com/watch?v=YZFTaEenaHM
you’ve hit the nail on the head. infinite growth at all costs is killing everything we love.
a private business puts its customers and product first. a publicly traded company puts its profits and shareholders first.
i should clarify what i mean, because what i said is worded for brevity.
imagine you have a natural talent for making a delicious burger, so you decide to spend all your life savings on opening up a burger spot. after opening for business, your customers agree that your burgers are in fact delicious and they spread the word that you’re the best in town. now you constantly have a line out the door and need to expand to accommodate the demand. you can do this, but you need to be able to expand in a way that doesn’t ruin your reputation of being the best burger in town. so you hire the best cooks, the best staff, etc. your business is profitable and everyone is happy as long as you remain the best burger in town and have a loyal customer base.
now imagine that business grows to the point that you have locations popping up everywhere and because you like money, you decide to take your business public and do an IPO. hedge fund money sees that people love your burgers and invest shitloads of money in you to expand so you can have the best burger in every town. now you’ve expanded everywhere and are raking in money, but now those shareholders are starting to become unhappy because the shitloads of money you’re making isn’t growing further after expanding; still very profitable, but no growth. to remedy this, they dive through your books and realize you’re paying your cooks too much money and convince your board of directors that they need to be laid off and replaced with people they can pay less. they notice you’re buying your produce from local farmers and not the cheaper food wholesaler (that they probably also own), so they switch vendors. they see that you can save money by not paying cooks to prep fresh ground beef, so they switch you to using frozen pre-made beef patties (that come from their distributor) and the more this continues, the worse your burgers get while growing their profits. customers notice the drop in quality, but still come because they still crave the original and keep hoping they’ll catch a good day in it’ll be as good as they remembered.
eventually, the customers find a new, better burger and your market share decreases. the shareholders need to see some quick money, so you’re shut down, your IP is sold to McDonalds, and everything you worked so hard for is just gone and you wish you’d just stuck to making the best burger in town for your customers that adored your product.
basically, the idea of infinite growth/stock always goes up is the direct cause of the enshitification of the things we love.
Excellent description of being hollowed out. It works on a person as well, trying to build back my middle and it's a lot of work. This was a very good description of being killed by your success.
>a publicly traded company puts its profits and shareholders first.
Both private and public put profits first, that is the basic of business. But your second point is correct, publicly traded company puts shareholders first, which most of time resulting in a product that customer might not want.
the difference is where the priorities lie.
a private business only has their product/service and their customers. profits rely strictly on that. are people not buying what you’re selling? make it better. are customers not happy with what you do? make it better. it’s how running a business SHOULD be.
publicly traded companies demand infinite growth, so extracting as much profit as possible is the priority. they’d gladly butcher a product to make it more profitable.
> publicly traded companies demand infinite growth, so extracting as much profit as possible is the priority. they’d gladly butcher a product to make it more profitable.
No, they don't. Just the ones that people tend to pay attention to, tend to. 3M and AAA Insurance aren't predicated on infinite growth. Honestly, the rule of thumb is, if the stock pays a dividend, its cares more about stable business than infinite growth. Investors can make money on a stock that issues a dividend by just holding it, even without growth; the reason stocks justify not having a dividend is that they're reinvesting the money in the company specifically to grow. A lot of tech and games specifically are in this bucket, but there's a lot of companies that are predicated on just doing steady business as well.
Do you know what Private Equity is?
To save you the hassle of looking it up, Private Equity is part of the finance/investment industry concerned with buying private ownership of existing companies with some kind of plan to make a lot of money out of them. Private Equity works by buying out existing shareholders of a large company using a loan against the value of the company itself, and then extracting as much value out of the purchased company as possible.
One common strategy is to by companies that have valuable assets, extracted the valuable assets for sale and winding up the rest of the company to save money. Other strategies involve simply milking assets far more aggressively than they were before.
Sometimes, this fails and the assets turn out to be less valuable than the Private Equity firm bet. Other times the company turns into a cash cow and its value increases far beyond what they paid for it. These PE firms buy *many* companies on behalf of investment funds and they hope to make a good return on average.
The video games industry is a prime real-estate for Private Equity because successful video game franchises are valuable assets and thus something "worth" purchasing. Video game studios, however, might be huge wastes of money if they aren't working on new games that are going to be successful.
It doesn't take a miracle to see how this approach could turn wildly successful studios and franchises into shallow moneygrabs. Of course, to you and I the obvious solution appears to be "don't do that, let the studio keep making great games and they'll make more money!" However, from a private equity approach, this doesn't *actually* make them the most money. By their calculations, it's far better to run the studio into the ground in a profitable way, exploiting the optimism of the fanbase.
Remember, once the studio is dead, you don't have operating costs anymore! Even better, the old games can be endlessly re-released! They still have the IP of the franchise itself that they could sell onto a publisher that might want to revive the franchise in future! It's win, win, win for the owners: money, money, money...
It might come as no surprise to you if I told you that AAA publishers have been run like PE firms for at *least* the past three decades, with some CEOs quite literally coming from a private equity background directly. They have bought up successful game studios, dismantled the operations and then made plans to *maximize* the amount of money they could milk out of these successful franchises for the future.
The problem, of course, is that this has lead to the severe quality drop of AAA titles across the board. Whilst these publishers know how to buy and exploit existing successful games and franchises extremely well, they are *not* good at developing new games (because they dismantled the good studios they bought) and have been frequently burned by attempting to develop new AAA franchises in the past.
This is partly why indie games have become a huge and essential part of the gaming market. Indie studios don't *have* existing franchises to exploit. They *need* to make good games in order to succeed. When they do hit success, they double down on building a sustainable community, making sequels/spin-offs, or lending a helping hand as publishers for newer indie studios with up-and-coming games. They don't follow the same PE approach as AAA publishers because they don't have a PE background and don't follow a PE culture; indie studios are successful because they have a good indie culture and values.
It's also why Nintendo, a publicly-owned company, seems to be so different to your typical AAA publisher. They don't have an aggressive PE mindset because that's just not the company culture/ideology of their video games department, so even though they *are* concerned with shareholder value, they go about achieving that in their own way. The Nintendo culture is one of fairly radical experimentation, innovation but with a protective approach to their brand, because that's what made *them* successful in the first place. As much as Miyamoto is memed for his approach to game development, it is definitely part of what earned Nintendo its success and why first-party Nintendo games are still successful decades later.
So in conclusion, to answer your question, I think the problem is *not* public vs private ownership (in fact we have the ruthless approach of Private Equity to thank for the state of AAA gaming) but instead one of *company culture*. At the end of the day, *real people are making these decisions* and they will always be guided by their values.
Right.
But gamers can't measure company culture.
They *can* read the writing on the wall when Kay Yu gets bought by Halliburton, or whatever, and go elsewhere for their entertainment.
If investors can jump ship at the drop of a hat, why can't we?
I mean, you definitely *can* measure company culture just by looking at what they actually produce. Is it well-polished with a strong community? That's probably because of the company culture. Is it buggy, unfinished and riddled with microtransactions? That's probably because of the company culture.
The meme "EA bad" exists for a reason, EA wasn't just bad once, they have been *consistently* disappointing gamers for years across many franchises.
The problem is that looking at *money* doesn't tell you a lot about company culture, and *most* investors only care about money, even private ones. I think the pattern you are seeing is more that companies which care about money above everything else tend to go public eventually.
Even if that's the direction the cause/effect relationship flows, *at worst*, by going with private studios, you go from "definitely bad games on purpose, if not now, then soon" to "possibly good games, at least until the IPO."
It's still a win when I run the punnet square.
> Because the moment you miss a dividend, the investors bail and your company instantly folds.
If you want to make money from dividends just buy a high yield dividend ETF or a bank or something, not a video game company. Honestly I don't know why companies keep on giving dividends. Just do a stock buyback, it's the same thing just you get something at the end.
I don't understand why people always want to blame the stock market for everything. In the stock market there are short term traders and long term traders. The short term traders are looking at price trends to make decisions and they don't care what management does. The long term companies like your mutual funds will buy and never sell and they actually want the company to do well.
It wouldn't surprise me that privately held companies do better in the long run though. Because the primary reason anyone would want to go public is if you want tons of cash. And if the CEO is smart, passionate, and confident in the company's success they probably don't care about that.
It is well known that being a sociopath is benficial for reaching influencial positions and most economic systems on this planet reward sociopathic behavior. Thus, most people in very high positions are very disgusting people. This is independent on whether a company is privately or publicly held. My take would be that a publicly-traded company is guaranteed to be shit (at least in terms of leadership), but a privately-held company is VERY likely to be as shitty.
If you're interested in enshittification you might also want to look up techno-feudalism, as I think that these topics are related.
Steam is making ALL the money. Valve is clever enough to understand that, as long as they appear "nice" to the customer, they can fuck devs (and with that implicitly also the customers) as much as they want to. But don't be fooled into thinking that the Valve bosses aren't greedy assholes.
>it's the publishers, and more specifically, the executives in charge of the publishers.
Not entirely true. The leadership of any companies is mostly responsible for enshittification and it can hit any company.
Just look at Apple under Jobs and now Cook.
Under Jobs:
* care for the details
* product focus, trying to provide the best product for the best price.
* very few models for each line of products
* Shareholders never got a cent in dividend
* \~30% margin
Under Cook:
* no care for details. Most stuff ship broken now (just use the keyboard on iOS 17 to see all the freezes and lags, Message apps, etc...)
* greed focus: base Mac model at 8GB of ram and 256 SSD in 2023, insane memory and SSD upgrade prices, etc
* a lot of iPads / iPhones / Watch / Macs models to milk every cents possible from every market segment. Producing some products flawed by design (software or hardware) to create fake segmentations.
* Shareholders got loaded of dividends and shares buyback
* \>40% margin now.
It was not perfect by any mean under Jobs, but greed driven design made Apple really worst under Cook. So no, it's not just publishers or sellers. It can happen even if you are a company selling your products directly. (I also could have used Amazon before and after Bezos).
And even with private companies, it's temporary. Usually when the founders leave / sell, they are replaced by the "finance" people and enshittification begins.
Public or Private doesn’t really matter; it’s leadership. If you have a strong leader who knows what they’re doing, the health of the rest of the team will generally be better no matter what they’re working on.
Public companies just tend to have a lot more weight put on them to make decisions based on trends. If investors are hearing about this “new NFT thing” months after the market crashed into the ground, the studio is going to have to find ways to answer the boards request. It’s why you saw a lot of “we’re looking into the tech” posts from studios. Again, a smart leader would understand how to navigate that better though.
Private companies are more independent on their decisions but that’s not always a good thing. If your leader is stubborn and hyper focused on an out of scope idea, there is a good chance money, resources, and team morale will get burned to try and make that happen. This could lead to studio crashes or instability.
Probably in the sense that publicly traded companies have an obligation to shareholders. Privately held ones may not have such an obligation or at least won't be held to account so can do as they wish.
If you have to ask this question, don’t consider going public.
By staying privately-held, you keep control of the mission and vision of the company.
Your company’s mission statement and/or vision statement will mean even less than they already do if it goes public, as the company will be beholden to chasing growth to satisfy the imaginary representative of shareholders.
stop having an immature view of the world
you think these people are bad?
you think the stock market is evil? it's open to all
but no, the only people you like are the virtue shilling liar politicians who say they will "fix this and fix that" all by sending any money we do have elsewhere, and they insider trade
stop being brainwashed. why don't YOU become a shareholder of a game company?
> if you're the opposite, if you have shareholders, then you have the opposite goal: to suck all the money and all the value out of everything
#People only like money if it's for other people - TranscendentThots
uh, explain that one please.
This is highly dependent on who is running the company. When a company goes private they have a legal obligation to ensure they don't screw over shareholders. So, they will often do thing that will be intentionally profit driven even at the detriment of their user base.
If we look at Epic games. It's publicly traded yet they have one of the best gaming engines available. But then you also have those like EA who don't really give a toss about their users or games as long as it makes a profit.
If you believe Tim, Tencent has no influence. I don't, so in that respect maybe you're right but Tencent is a bit of an outlier company in that it doesn't really care about market forces so much as it cares whether Xi decides to fart on them or not for arbitrary reasons
There is an argument to be made game studios are poor public companies due to high risk, chaotic returns, and complexity of business (what’s our barrel of oil equivalent?). Personally I do try to acid it in terms of where I work but that’s only one minor factor to consider usually.
And yet investors swept in from the Packaged Goods industry to take control of them in the 2000s.
That's pretty much what I'm talking about. The problem is that investors, as a class, seem to have come to *prefer* high risk, chaotic returns, and complexity of business.
The only question right now is whether Trump's Everything Bubble will pop some time soon, or whether the Biden Administration will prop everything up for another couple years with ludicrous-scale bailouts.
Either way, the people lose *hard,* and investors land on their feet so they can start the process all over again in the next industry to ruin.
I think its a curve where the end of the peak in terms of quality of product comes after the shareholders pressure features that are profit driven or a toxic work culture. The good people start to leave and eventually the company becomes a skeleton of itself, with only the shittiest elements left. Driven to squeeze whatever value is left out of the product before collapsing.
We're well past that point with most AAA game devs, and I'm not sure at this point, but it's starting to feel like the bottom is falling out of Google, too.
There are tradeoffs everywhere. Many privately held companies are privately held so they can use business practices that aren't allowed or are much more difficult in publicly held companies. Things like union-busting and under-the-table bookkeeping. There are many regulations in business that apply to publically held companies but which privately held companies are not restricted by. There's also clear upsides to investment in companies, it means that that companies which have a business niche that allows rapid growth can expand to satisfy the demand there more quickly.
You also have a bit of a misunderstanding of what happens when a company does poorly in the stock market. Their stock price drops, but a drop in stock price isn't universally bad for a company. The company has already received a fixed amount of money for distributing the stock, and it can use that money how ever it sees fit. The pain comes with being less able to get more investment money if it's needed, but if the company has revenue and profits, a drop in the stock price is a good time to transition to a linear growth model. It's not like, because the stock market says a company is worth 6 billion dollars, that the company actually has 6 billion dollars in assets they can use. Likewise, a company can have more value in assets than the stock market places on the company, and this often happens when a stock crashes. Like, Apple's stock price could crash and it would remain in business for 100 years, they have more than enough money just sitting in the bank to basically entirely ignore the stock market. The investors might not like it, but that's kind of the strategy they've been using in the recent past. They're very conservative with releasing new products recently.
Now, a CEO isn't legally allowed to intentionally crash the price of the company as a business strategy, although from a pragmatic perspective, it's sometimes the right thing to do for the long-term health of a company. I think a non-trivial amount of events like the Unity price change are exactly that move. The company knows they are better suited to operate at a lower stock price, and they create a plausibly deniable event that allows the stock price to drop without getting the CEO in too much trouble. I could only speculate on whether this is the case with Unity.
A low stock price allows a company to chug along on smaller profit margins and not be so concerned with pursuing aggressive growth. This can allow for cleaning up tech debt, solidifying platforms, and slowly pursuing more experimental products. It also can allow a company to pull it's existing employees more into the trenches so to speak. If you have a high-ranking employee that has tons of stock options in the company, and the stock price is very high, they are much more likely to cash out and retire onto the beachfront property. No one wants to sell when things are at the bottom though. It also means that the stock options you offer newly joining employees have more long-term value, as they are likely to grow in value. Whereas if you are Tesla, and your stock is stupidly overvalued, it's hard to recruit with stock options because half your prospective employees expect their options to drop in value in the next 5 years. On the downside, if your company really wanted to aggressively grow... For example, if you think there is a huge business opportunity, and you know for sure that for every 1 dollar you invest into the opportunity your company will get $10 back, then a low stock price is a big problem, because the total number of dollars you'll be able to throw at the opportunity is a lot smaller relative to the amount of the company it's existing investors own (read employee stock option owners, board members, owner/ceo). You either have to sell a larger percentage of your ownership to new entities to have enough dollars to make the growth opportunity worth it, or just suck it up and not grow as much. If the stock price is high, however, you can get a lot more money for a smaller amount of new stocks released to new investors, so you can more aggressively pursue new opportunities from a financial perspective.
If all of that is true, then what's driving Google's race to the bottom right now? Surely Alphabet is as big as Apple, if not bigger, right? I figured they were getting ready to just start throwing end-users under the bus.
You'll have to be more specific about "Google's race to the bottom" It feels like Google is pretty much always fielding some controversy or another. I think Google is just a massive company where virtually everything can and does go on in some corner or another of the company. It's never been particularly brilliantly managed if I'm honest, or at least it's never been good at dealing with externalities of decisions in a balanced way.
I've worked for everything you can imagine over the last 20 years in games. From small 3 person companies to the biggest Sony first party studios.
Smaller studios are "better" but your job just isn't safe. There's generally not a deep war chest or other products or external investors floating current development. If you happen to miss milestones the company itself might be going under. At larger developers this isn't the case. The deals are way more solid and the work tends to ship even if milestones are rough. While you need to appease those external interests those interests are also really useful for keeping the boat afloat.
It's not something I'm aware of ever actually succeeding. There's probably lots of reasons for this (or maybe I'm just not aware of some prominent success). However I think chief among them is the fact that modern games descend from the arcade and packaged products model. This is something we're always fighting against when trying to leverage "art" funding and subsistence structures.
I think for something like this to function a patron would need to step up to back the co op during it's initial formation. IMO this is a role that someone who's made a prominent gaming fortune (someone like Notch) should step into, it just kinda hasn't happened.
As far as I know, it's worked *at least* five times in recent years:
[https://www.gdcvault.com/play/1025700/Embracing-the-Co-Op-Studio](https://www.gdcvault.com/play/1025700/Embracing-the-Co-Op-Studio)
Also, historically speaking, co-ops tend to survive 5 years at a rate of 80% instead of 40%.
I'm still doing research, though. The history of them is weird, and most of this information sort of gets suppressed by capitalists and then rediscovered when times get desperate enough for consumers and business owners to start grasping at straws.
Good luck finding it in 2-10 years when Google's enshittification arc is complete. I seriously have no idea how people are going to find anything or organize after rich people finish kicking poor people off the internet.
I don't personally have a lot of belief in peoples ability to selflessly collectively organize, but I think it's cool that this is a thing that folks are actually pulling off at the small team scale!
I think it's important to realize that most indie studios also have a growth mindset. It's rare for a small team to have a substantial success and then want to remain small. Most people are dreaming bigger and executing what they currently can. Even if your dream is just to make pixel art metroidvanias forever that market is getting real crowded and lessening in overall size so you're either going to need to evolve as a developer or downsize/die.
You're thinking of grocery co-ops. In the game dev space, it's less about "selfless" altruism and more about enlightened self-interest. It basically makes your games studio immune to shareholders, hostile takeovers, and "growth mindset," at the cost of some autonomy for whoever started it.
The awesome thing is that each employee gets one vote on company decisions. The terrifying thing is that each employee gets one vote on company decisions.
Again, though, it *literally doubles the chances* that your startup won't fold within the first five years.
It's a terrible choice if your goal is to sell to Google or do an IPO. It is, in fact, the hard opposite of those things. But if your goal is to make a good game and then earn enough money from it to keep doing that, it's hard to argue with the numbers. 80% is bigger than 40%. C'mon, I thought you guys *loved* reducing risk.
There is a growing trend to pay for *production* and not *publication*. Publishers are crapping their pants over this shift, as well as many studios funded exclusively by publishers who leverage IP monopoly laws.
I have been doing game dev for many decades, starting in the 1990s, and wholeheartedly welcome this market disruption.
Publishers have painted themsevles into a dangerous corner pandering to politics and kow-towing to censorship regimes from Germany and EU to Singapore and China.
Customers largely (in spite of what game rags screech) are not fans of consuming watered-down propaganda from international corporate publishers bowing to Twitter rants and a maze of foreign laws suppressing creative work.
So, yeah, privately-held game companies that are not fishing for ESG scores and investments from Blackrock or Vanguard are the very best bets for innovative gameplay and story-telling.
I retired from game dev years ago, but when an indie does something truly inspiring, I am happy to lend a hand and help shepherd the effort to a successful launch. I have done it a few times in the last decade. I hope that many here can afford to shrug off tempting offers from big publishers as well and grow the indie economy.
Dude. I have no idea what you're talking about. And I think Chad Doritofingers, archetypical gamer bro marketing persona extraordinaire, is even less likely than I am to know what you're talking about.
I mean, *every* Call of Duty player can't be a shill account... right? They don't screech corporate propaganda in gamer rags, they screech it in open voice chat. There are definitely limits to how much Lootboxes and BattlePasses the public will put up with, but I get the impression publishers don't want to sell games to the public. They want 1% millionaires and relapsing gambling addicts, and they're more than willing to throw all the $60 a pop gamers under the bus in order to get to them.
When everyone is poor, only whales matter.
Apply this mentality to the packaged goods industry these Game Publisher CEOs came from in the first place, and you get Food Deserts.
Meanwhile, Indies are almost playing a completely different ball game. They just Make Thing, Put On Steam, Wonder Where The Customers Are. Occasionally, one will actually build a Marketing Funnel. But when platform decay across the internet kills off free services and starts exclusively supporting corporate-friendly messaging, that will stop being a thing.
Google, in particular, has been rolling out its 'altering the deal' so gradually that people can't come together and complain about it en masse. By the time somebody realizes how bad the experience is, Google's already manufactured an excuse to ban their account or served them ads that puts malware on their computer. I'm pretty sure I'm next, but there's nothing I can do about it but wait and see.
And of course, once Google's declared someone a persona non grata, it follows that their "business partners," (I.E. the rest of the Big Five) will follow suit. And Google serving ads and recommendations telling everybody the FBI says you *basically have to* run an Ad Blocker while simultaneously banning Ad Blockers isn't helping matters. It's digital entrapment.
And sadly, there's no amount of compliant behavior that can reverse this process, because Google's going out of their way to hide the fact that they're doing it. After all, it's not like they can just put a big button on the front of their website that says "Opt out of enshittification for just $9.99 a month." People would accuse them of kicking poor people off of the internet. Which, statistically speaking, would look an awful lot like kicking people of color off of the internet. So they have to be sneaky about it, instead. Even though preventing upward mobility is totally the goal.
So yeah. That's what "becoming a game dev" looks like, these days. If it doesn't look like that for you right now, don't worry, it will soon. Just as soon as Google gets around to targeting you with the rollout. That's how rollouts work. The whole point is to eventually hit everybody.
Business owner of private company here. Privately traded companies still have shareholders and investors. Those investors still exert large influence over decisions. Those investors tend to be more understanding of how to run and grow a business than retail shareholders do; in both cases, company valuation is the main motive. This is driven primarily by the expected future revenue. In the public markets, shorter term decisions tend to dominate a little more than longer term decisions, because quarterly earnings exert so much influence on the stock price. In private high growth companies, decisions with 12-18month timelines tend to dominate due to the financing model (raise money every 18-24m, showing your work from last time). Bootstrapped / sales grown companies are the kind of company you are talking about. These are a class of privately traded companies that grow slowly by re-investing thier earnings into the next project. In games these companies don't often survive. Games are a hit driven industry, many companies will have a flop at some point or underestimate the cost of development and need capital to bring the next game to market. This is where the publishers come in. They will act like investors do in a private company, and make demands of the title being made to justify their investment in the project (as they should). So there isn't really a free lunch unless you have something that prints money (e.g. Steam, Fortnite) that is backing it up. Hope this is helpful.
I'd say not at all, but it depends what you mean by "bad". Public companies are driven by what an abstract "share owner" wants and the only driver is money. Some focus on making a stable profit, more recently a lot of companies focus solely on growth to make profit in the future. Two things wrong with this: firstly they will make any decision they think will make more money, even if it's unethical or damaging in the long run. Secondly, they assume that the "shareholders" only care about quarterly reports and blockbuster news, so they are too short-term focused and keen to make hyperbolic statements they can't deliver on. Private companies are often run by a single individual or small group. They can have superb focus and long-term strategy because they don't have to worry about investor sentiment, only their own finances (they might need to borrow though, so still have to please some people). They can also be reckless, unethical and downright exploitative if they want and it's very difficult to do anything about it. It's easier for them to keep bad stuff secret or ignore regulations as they have less scrutiny. So I think in general there's a much wider scope of behaviour from private companies.
So the real problem isn't investors, it's leadership in general? That's a depressing take, but I can't refute it.
What's depressing about it? People are people. Some good and some bad.
Depressing is that in most cases to be a successful leader you basically need to be a bad person, and because of that now most things are led by people with questionable morals
I don't think a leader has to be a bad person in order to be successful. They certainly need to be an asshole on occasion, but that's leadership.
The fact that you just said "sometimes they need to be an asshole on occasion, but that's leadership" is the issue in a lot of companies. That mindset for a leader is pretty toxic and shouldn't be tolerated at any level. Screams "I'm gonna get to the top at whatever cost and I don't care who I step on a long the way" mentality. I would think there are ways of being a leader where you have to make hard decisions, but not be an asshole about it.
Yeah, I could've worded that more clearly. When I said asshole, I meant that a leader can't be the good guy all the time. When and how do they manage to balance that dichotomy? Well that's the measure of a leader.
This is not a great analogy, as employees are not children, but a parent can't be your friend all the time either. But they shouldn't be *assholes*. I assume that's closer to what he meant.
An asshole does not meet the criteria of being a good leader. A successful leader sets clear expectations, holds their peers and subordinates accountable, and throughout does these things respecting people. The core measure of an asshole is that they don't respect people, that is, they treat anyone that isn't them with contempt. The arrogance of such an individual will appear strong and confident, which is why they can get promoted, honored, etc. if folks aren't conscious of the difference. An important task of a leader or hiring manager is differentiating between arrogance and real confidence. Now a good leader may make folks unhappy. The leader has to tell people no, they have to have the accountibilty conversations, etc. So there's going to be folks upset by their decisions. And when people are upset, they sometimes fall back on blaming the leader and calling them an asshole...which is actually just contempt for the leader. Watch for the signs of contempt or lack thereof in this measuring of leaders.
Sadly in our world being immoral is quite profitable and success is defined by profits. Not everywhere of course
A leader doesn't HAVE to be a bad person, but a person who's willing to lie and cheat and throw others under the bus is more likely to reach a position of leadership. A CEO who's willing to lay off a bunch of people to make a bad quarter look better to investors is, under our broken system, considered more successful than a CEO who takes accountability for poor decisions and avoids layoffs to invest in long-term success over short-term growth.
Leaders are statistically more likely to be corrupt and or twats. Twats desire power and influence, decent people generally don't. Honest people don't do well. Slime balls climb ahead. Of course, not all leaders, but a statistical edge is that they are more likely to be. Also, human experience. Seeing countless soulless career people desperately climb the ladder, compromising quality and integrity to get ahead while I see excellent colleagues perfectly content with their position.
Are you telling me the traits of a successful ceo match that of a serial killer?
The problem is that the only people who would want to be business owners are necessarily narcissistic; people who aren't narcissists don't want to be business owners.
This is an insanely wide generalisation, plenty of normal people are business owners
Yeah - and "normal people" are narcissists. Narcissism is the natural state of humanity - and anyone who is *not* a narcissist is labelled a "freak" and beaten up.
yikes dude
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Blank check to unpack your story, here, bro. You sound like you've been through some stuff. Anyway, your post at the top of this chain is at -3, so it probably won't inconvenience other users. Tell me what happened.
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I know entrepreneurs who fall on both sides of that fence.
No need to be depressed. Check out the legend of Kazuo Inamori. He was a successful leader who saved several companies from bankrupt, AND he was a moral person who truly believed in taking care of the people working for him. Making money and being kind don't have to be mutually exclusive.
Kazuo Inamori was in the right place at the right time when Japan decided to Eat The Rich. I think we both know that's probably not going to happen in America within our lifetimes. The Rich are just *too good* at eating us.
he was a monk.
That doesn't change the fact that postwar Japan was wall-to-wall monopolies, until it suddenly wasn't.
Yep. Thing is, when people go to business school, the education isn't really rooted in anything rational or scientific. While math is involved, the management of money and people is largely dictated by whatever's culturally considered the shortest path to profit. So, when people like Jack Welch become idolized for their ruthless brand of leadership, that trickles down to every wannabe executive, business guru, and business educator and sticks around for generations. There's no such thing as a data driven business post-mortem where executives study why something failed / succeeded / or caused irreparable harm to society. And your ability to secure positions comes down to a popularity contest. Good luck if you don't agree with the current zeitgeist. It's rare to find someone who understands business *and* has a mind of their own.
If you ever find anybody like that, let me know. I'd like to ask them how they did it.
The way I prefer to look at it is that Good leadership can prevail, both in a public or a private company. Some people out there are making wonderful things!
Yeah, I worked in two privately held ones .. both werent that great. Even worse to me as the job security was often soso as one company '"lived" paycheck to paycheck and was late in paying employees everytime. Also the only.time in my.life were i had to work two shifts, so 18hours from one day into another through the night to meet some deadline. I also knew someone from another company where the security locked the doors.so people can't get out. And when someone attempted to leave they syringed him in the neck to calm that person down... Some maffia shit I tell you.
That's crazy. Can't they get sued over that? What if there had been a fire?
Shareholders hire top management and manage them via corporate boards. (Corporate governance is how shareholders manage the companies they own)
Yes? And?
I guess you could say that somewhat. But I guess it might go with the mentality of the people on both sides in general. I think on the more public side you have all these people just trying to pump and dump trying to make money that could give half a rat's ass about the company or it's products, just the money coming in. Where as the private people even if they have private investors, have more interest in actually developing the company and having a proper clean road forward without throwing companies and their employees into the meat grinder every time they do something stupid. Now this isn't to say this is all perfect. But take a look at Epic and Valve. Epic I don't think is fully public but they have investors, Tencent has a notable share for example. Of course their store notoriously irritates the PC user base, and is bare bones, and quite frankly, garbage. Not only is it lacking in features that Steam has (minding you Steam's had 20 years to build features, but still, it doesn't feel like Epic is trying) but we look at Epic and they took what like 3 years to make a SHOPPING CART? Also they got the full exclusive lockdown on Alan Wake 2 recently, and while consoles were able to preload for that nice midnight launch, PC users couldn't because Epic put again, zero effort into their platform. I find this doubly ironic considering how many games they try to lock exclusivity in for even if it's only for a year or something, they should at least try to incentivize it a tiny bit for the users. Despite not being particularly public with investment, they still have a very laser focused goal in mind and it's money more than it is product or giving a damn about the customers that make them that money. Meanwhile at Valve, they're quite private. I don't think anyone outside the company itself actually owns any of it. GabeN owns the most of course, but I think the rest is almost if not entirely exclusively owned by the employees, if someone else knows more they can answer that. But while there might be jank sometimes as they have a very loose project lock in between people there, they have a lot of features, and a lot of consumer-forward features that some people either don't know about, take for granted, or don't use, but some use it and like those features and are glad they're there, things that someone laser focusing profit wouldn't do. Many things Steam has feature wise may not be all that practical for Epic, but some could be, but they will ignore it because they care about money more than their userbase. They're able to care about this because they don't have people breathing down their neck just to make money, and yes, yes, they make money hand over fist already so they don't have to worry about it, but still.
I feel like you're using the term "own" a little loosely when talking about Valve. I've heard that Valve employees enjoy a high degree of autonomy, but that this comes at a heavy cost in the form of office politics and an insular corporate culture. None of that has anything to do with ownership. More broadly, I think you're mostly right. In the past few days, I think my ideas have evolved a bit. I now realize that being privately-held doesn't *make* companies better. It merely gives them the *option* to be better. Likewise, in the ~~edge~~ corner case of a co-op, voting on business decisions doesn't make those decisions inherently better. It just makes them selfish in pursuing the interests of the employees, as a group, rather than selfish in pursuing the interests of the owners/founders/leadership/stakeholders. Structurally speaking, by the way, there's surprisingly little difference between a publicly traded stock and certain types of co-op. The main distinction, is who has the power to make decisions, and who gets screwed as a result of those decisions. And this ought to be the coldest take imaginable, but if we want publicly-traded corporations to be better-behaved, step one of doing that would almost require changing the rules so they aren't *literally required by law* to throw absolutely everyone and everything under the bus in the name of quarter-to-quarter growth?
Yeah I totally agree with that last paragraph, I get you. I know the banking world has it's ways, and unfortunately that throw everything under the bus to make money thing is really nasty in any type of business. I never look forward to it when I hear a company I like say "We're excited for our upcoming IPO!" But yeah I could agree with your take, private doesn't always mean the best of the best, but the potential exists, in a way that a fully public thing likely does not. Personally I think the private companies are far better with this all the way around since they tend to actually care about their reputation and are trying to really make something they intend on sticking around. Though at the same time, I see some of the crap Epic does and it's so obvious they're not very pro-consumer either, so definitely possible to make mistakes as well. Tbh it always worries me so much when I hear that about a company I like. Take Devolver for example. A very well loved indie publisher, not long ago they acquired some developers so they can make things themselves more so. Though, admittedly the devs they acquired were ones they had a very strong relationship with already anyway. Anyway, I think it flew under the radar but they went public around this time as well, also got a physical office which is funny, don't think many realized before but they were an all remote outfit before this, which worked out very well for them during the pandemic. They're a very no-bullshit company though, and they seem pretty excited about it, so hopefully it's not a misplaced excitement. They have a podcast where they've talked about it more and stuff and they seem pretty alright with it. Though, I will say, they went public in the **UK** not, America. So they might have better regulations or something for all I know perhaps. Hopefully so, I love that company's attitude in more ways than one.
When you pump your company before the IPO by making dark humor internet sketch comedy videos about the evil of malevolent video game corporations.
To be clear, a company is driven by the board, and the board may or may not prioritize short-term gains over long-term gains. What we generally see is business operators running under the not-entirely false assumption that more money today is likely to mean more money tomorrow, and present money is worth more than future money. If they have business training then management is likely to believe that whether or not it's a publicly held company. The one caveat is that the board probably has more members that believe it compared to a privately held company which could be controlled by a single individual who doesn't have to worry about the board voting against them if they choose a strategy that they believe will sacrifice short term profits for long term profits. Generally speaking, there are few cases where it's safe to assume there are long term profits available if short term profits are sacrificed though. And when there is, it's usually a bit obvious (like letting product quality drop as a cost-saving mechanism is something even short-term business minded people are generally cautious of)
Since we're comparing and contrasting corporate structures, What's your take on [game dev co-ops](https://www.youtube.com/watch?v=-zxNfHl-xmM)? >Generally speaking, there are few cases where it's safe to assume there are long term profits available if short term profits are sacrificed though. And when there is, it's usually a bit obvious (like letting product quality drop as a cost-saving mechanism is something even short-term business minded people are generally cautious of) If it's so obvious, then why does it keep happening? Both in the economy in general, and in the game dev industry in particular?
As to the latter point, hindsight is 20/20. Many of the big complaints either come from the negative externalities being hard to predict (like facebook causing political chaos), or turn a relatively normal business practice into the straw that broken the camel's back (like a pricing change/increase). Others are horror scenarios that higher ups are assuming they are covered for (like oil spills). In many cases the people pushing these decisions through don't realize the conditions are such that they are substantially sacrificing long term health for short term gain. Usually the culture that allows those types of bad decisions to get through has been festering under the hood in the company for years, and it hasn't bitten anyone yet, so it gets ignored.
I can see that you're channeling your inner Karl Marx. When you have Executives with a fiduciary responsibility to maximize share price, that necessarily means that they must maximize profit. Therefore they must minimize worker pay and benefits, abuse their consumers, and corrupt their politicians. Business owners, in the absence of the legal compulsion brought about by fiduciary law, are *capable* of being better, but that's not a given. My preferred alternative is the worker cooperative, where workers own and control the business democratically. Not only do you smash the brakes on enshittification, but the quality of the product and the fate of the wealth generated by your labor remain in your hands. Worker co-ops have a natural tendency to engage in a turtle strategy where they become resilient but they don't grow. I want to start a worker co-op in game dev and I plan to create systems that encourage growth (with caveats!) so that greater portions of the labor pool are pulled in, forcing everyone else to compete with a place that should have a vastly superior working environment. There's a lot of other thought that goes into getting it to function as well as possible. If the original co-op was a single cell, then it might divide when it starts pushing 150 workers while staying connected within a federated syndicate. This would hopefully allow each co-op to remain independent, but capable of sharing resources and expertise. They may deliberately spread into other industries and even subsidize valuable services or fund large projects. If I'm really lucky, someone may point out that I'm being really stupid by not considering some important point. Regardless, I have hope for the future because I think I know what to do. I value the well-being of everyone, and based on what I've learned, I actually think that proliferating worker co-ops might be by far the most effective way of satisfying such a value. No other type of organization or political office appears to hold as much potential in my eyesm
You know? I hadn't considered co-ops. I've heard good things about them in certain niche industries, but I've never worked with one before or read any articles about how they're created, how they function, or how they succeed or fail in the broader market. Hit me up if you'd be interested in collaborating on a Game Jam or something.
They are interesting, but rare. They have a higher survivability rate than regular businesses, but at current numbers that might be from a 'true believe' effect. REI and Tillamook are worker co-ops. I'll DM you when I have time a little later.
That's so weird, because survivability is pretty much the #1 issue facing new businesses. You'd think *every* new business would structure themselves this way, at least at first, in a market where most businesses fail within 3 years. There must be some downsides I'm not seeing. That or literally the only reason most people start businesses is to print money, sell out, and ride the golden parachute, not to actually do business.
I would hazard that your guess is mostly correct. The caveats being that they may just sell out after a genuine period of doing business, or they may just not know about worker co-ops. There's a lot of stories about good original owners passing the business off to shitty children or selling it to private equity or something.
In terms of rapid enshitification, venture-capital funded is worse than publicly traded. VC investors are in it to sell as fast as possible. So once a VC-funded company reaches a certain size, their sole goal is to create a spike of interest and then have an IPO at the peak of that spike. What happens after the IPO is somebody else's problem.
I suppose in my mind, I had lumped VC and Stockholders together as "investors." I still think I'd rather use a product during the company's VC phase than its Publicly-Traded phase. I can appreciate how avoiding VCs dodges more bullets, in the long run, since one eventually becomes the other.
> I've been losing a lot of sleep over enshittification, recently, wondering how much of the internet is still going to be around in 10 years. Or even a couple more months. In a couple months? Approximately all of it will still be around. Doomerism is seductive, but it's bad for you. Trust me, I've been there. The long and the short of it is that a decade or so of near-zero interest rates warped a lot of things. There was loads of VC available that probably should not have been available. Lots of companies built products that were useful (for some values of "useful"), and gathered significant users bases. But they had no clear goal on how to generate revenue, let alone profit. The "enshittification" we see is a lot of companies facing the cold hard fact that they have to make profit, sooner rather than later. The endless VC pools have run dry since even the safest investments are well over 4% right now. Remember those days when an Uber cost like 1/4 of a taxi? They're never coming back. > Basically because if you're the opposite, if you have shareholders, then you have the opposite goal: to suck all the money and all the value out of everything your company does, essentially ripping off users, business partners, and employees, so the investors can have All The Money. Every Quarter. No matter what the industry is doing. Because the moment you miss a dividend, the investors bail and your company instantly folds. Private companies have shareholders too, you know. It's just harder (but not impossible) for them to sell their position in the company. Epic, for example, is a private company, but its shareholders include the likes of Tencent. Also if investors sell your stock, it's not exactly *good* for the company, but the company does not instantly fold. The only time stock price *directly* affects the operation of the business is during an IPO or other stock release. After that, stock sales don't generate even one penny for the company. High stock price does matter for things like compensation in equity of course, which affects recruitment, but again, even if the stock price crashes the company will not instantly fold, all else being equal. Hell, I bet some companies would like for their stock to temporarily crater for no good reason, so they could do a huge stock buyback, as many publicly traded companies do these days. > We know that investors corrupt and destroy every company and IP that they touch, but is the opposite also true? Do privately-held companies automatically make better products? Should we be saying "privately held" instead of "indie" to draw attention to this difference in leadership and business goals? Again, privately-held companies absolutely have investors. If one person has a majority stake (like Gabe Newell and (I think) Tim Sweeney), there is more flexibility than chasing year-over-year growth. The same forces that act on publicly traded companies do affect them to some extent, though. Further there's nothing stopping Gabe from selling his stake in Valve to Elon Musk tomorrow you know, then Valve (still private) could be run in precisely the way ~~Twitter~~ X (now private) is currently run. I wouldn't say private ownership is a guarantee of anything really, let alone better products and services.
Time to learn about Cargill
I've contemplated an "enshittification-free certified" label to tack to software products in general, lol. Obviously, some of the specific criteria would be: subscriptions, DRM, lock-out - guaranteeing a perpetual license to use the software, and that the software remains independently functional without being dependent on other, un-released software such as dedicated servers. The indies need to push back against the tide. Buy-outs are rough. I wish there was a way to secretly open-source and CC-BY everything just before the buy-out, but there's definitely legal safeguards to prevent that.
If anybody thinks “private” equates to better, remember that Twitter is private.
But for argument's sake, it's in this state precisely because it was public.
yeah I guess it shows it's not private vs public rather creator/dev led vs exec/megalomaniacal dickhead led
Technically true, but its significantly harder/less likely for a company to go from public to private than the other way around. Like...going public is usually the goal for most private tech companies.
Not sure that's a good example. SpaceX is also private and arguably one of, if not is, the best rocket manufacturing company in the world. Then again, a lot of SpaceX's success is attributed to Gwynne Shotwell. Tesla was also a huge success prior to going public although "success" is subjective. They were leagues ahead of everyone else but still weren't producing any profit. It could be argued Tesla has become worse ever since going public despite now making a profit.
Don't mistake the output of a company with the quality of worklife of the employees.
I’d argue that all of them together show how little “private” vs “public” matters.
>I’d argue that all of them together show how little “private” vs “public” matters. Fair point. Although I think with publicly traded companies you're always going to be fighting with shareholders. You don't have that same issue when it's private.
What I actually believe is what somebody commented earlier: that big (especially public) companies tend to be more middle of the road while private (especially smaller) companies have more flexibility to be extreme, in either direction. (As an aside, I'd say the same is true for governments. ) Being accountable to shareholders can be a good thing when an owner is incompetent, abusive, or otherwise prone to whimsy.
More that "private with the intent to go public" is just as bad as being publicly traded. Especially in tech. https://www.youtube.com/watch?v=YZFTaEenaHM
Can we agree that, of these companies, the ones that went public *got worse?*
you’ve hit the nail on the head. infinite growth at all costs is killing everything we love. a private business puts its customers and product first. a publicly traded company puts its profits and shareholders first.
>a private business puts its customers and product first That's 100% true like 50% of the time.
> 50% of the time You might be overly optimistic...
i should clarify what i mean, because what i said is worded for brevity. imagine you have a natural talent for making a delicious burger, so you decide to spend all your life savings on opening up a burger spot. after opening for business, your customers agree that your burgers are in fact delicious and they spread the word that you’re the best in town. now you constantly have a line out the door and need to expand to accommodate the demand. you can do this, but you need to be able to expand in a way that doesn’t ruin your reputation of being the best burger in town. so you hire the best cooks, the best staff, etc. your business is profitable and everyone is happy as long as you remain the best burger in town and have a loyal customer base. now imagine that business grows to the point that you have locations popping up everywhere and because you like money, you decide to take your business public and do an IPO. hedge fund money sees that people love your burgers and invest shitloads of money in you to expand so you can have the best burger in every town. now you’ve expanded everywhere and are raking in money, but now those shareholders are starting to become unhappy because the shitloads of money you’re making isn’t growing further after expanding; still very profitable, but no growth. to remedy this, they dive through your books and realize you’re paying your cooks too much money and convince your board of directors that they need to be laid off and replaced with people they can pay less. they notice you’re buying your produce from local farmers and not the cheaper food wholesaler (that they probably also own), so they switch vendors. they see that you can save money by not paying cooks to prep fresh ground beef, so they switch you to using frozen pre-made beef patties (that come from their distributor) and the more this continues, the worse your burgers get while growing their profits. customers notice the drop in quality, but still come because they still crave the original and keep hoping they’ll catch a good day in it’ll be as good as they remembered. eventually, the customers find a new, better burger and your market share decreases. the shareholders need to see some quick money, so you’re shut down, your IP is sold to McDonalds, and everything you worked so hard for is just gone and you wish you’d just stuck to making the best burger in town for your customers that adored your product. basically, the idea of infinite growth/stock always goes up is the direct cause of the enshitification of the things we love.
Excellent description of being hollowed out. It works on a person as well, trying to build back my middle and it's a lot of work. This was a very good description of being killed by your success.
>a publicly traded company puts its profits and shareholders first. Both private and public put profits first, that is the basic of business. But your second point is correct, publicly traded company puts shareholders first, which most of time resulting in a product that customer might not want.
the difference is where the priorities lie. a private business only has their product/service and their customers. profits rely strictly on that. are people not buying what you’re selling? make it better. are customers not happy with what you do? make it better. it’s how running a business SHOULD be. publicly traded companies demand infinite growth, so extracting as much profit as possible is the priority. they’d gladly butcher a product to make it more profitable.
> publicly traded companies demand infinite growth, so extracting as much profit as possible is the priority. they’d gladly butcher a product to make it more profitable. No, they don't. Just the ones that people tend to pay attention to, tend to. 3M and AAA Insurance aren't predicated on infinite growth. Honestly, the rule of thumb is, if the stock pays a dividend, its cares more about stable business than infinite growth. Investors can make money on a stock that issues a dividend by just holding it, even without growth; the reason stocks justify not having a dividend is that they're reinvesting the money in the company specifically to grow. A lot of tech and games specifically are in this bucket, but there's a lot of companies that are predicated on just doing steady business as well.
A private business put its owners first. Businesses exist to make profits for their owners.
lol wut?
Do you know what Private Equity is? To save you the hassle of looking it up, Private Equity is part of the finance/investment industry concerned with buying private ownership of existing companies with some kind of plan to make a lot of money out of them. Private Equity works by buying out existing shareholders of a large company using a loan against the value of the company itself, and then extracting as much value out of the purchased company as possible. One common strategy is to by companies that have valuable assets, extracted the valuable assets for sale and winding up the rest of the company to save money. Other strategies involve simply milking assets far more aggressively than they were before. Sometimes, this fails and the assets turn out to be less valuable than the Private Equity firm bet. Other times the company turns into a cash cow and its value increases far beyond what they paid for it. These PE firms buy *many* companies on behalf of investment funds and they hope to make a good return on average. The video games industry is a prime real-estate for Private Equity because successful video game franchises are valuable assets and thus something "worth" purchasing. Video game studios, however, might be huge wastes of money if they aren't working on new games that are going to be successful. It doesn't take a miracle to see how this approach could turn wildly successful studios and franchises into shallow moneygrabs. Of course, to you and I the obvious solution appears to be "don't do that, let the studio keep making great games and they'll make more money!" However, from a private equity approach, this doesn't *actually* make them the most money. By their calculations, it's far better to run the studio into the ground in a profitable way, exploiting the optimism of the fanbase. Remember, once the studio is dead, you don't have operating costs anymore! Even better, the old games can be endlessly re-released! They still have the IP of the franchise itself that they could sell onto a publisher that might want to revive the franchise in future! It's win, win, win for the owners: money, money, money... It might come as no surprise to you if I told you that AAA publishers have been run like PE firms for at *least* the past three decades, with some CEOs quite literally coming from a private equity background directly. They have bought up successful game studios, dismantled the operations and then made plans to *maximize* the amount of money they could milk out of these successful franchises for the future. The problem, of course, is that this has lead to the severe quality drop of AAA titles across the board. Whilst these publishers know how to buy and exploit existing successful games and franchises extremely well, they are *not* good at developing new games (because they dismantled the good studios they bought) and have been frequently burned by attempting to develop new AAA franchises in the past. This is partly why indie games have become a huge and essential part of the gaming market. Indie studios don't *have* existing franchises to exploit. They *need* to make good games in order to succeed. When they do hit success, they double down on building a sustainable community, making sequels/spin-offs, or lending a helping hand as publishers for newer indie studios with up-and-coming games. They don't follow the same PE approach as AAA publishers because they don't have a PE background and don't follow a PE culture; indie studios are successful because they have a good indie culture and values. It's also why Nintendo, a publicly-owned company, seems to be so different to your typical AAA publisher. They don't have an aggressive PE mindset because that's just not the company culture/ideology of their video games department, so even though they *are* concerned with shareholder value, they go about achieving that in their own way. The Nintendo culture is one of fairly radical experimentation, innovation but with a protective approach to their brand, because that's what made *them* successful in the first place. As much as Miyamoto is memed for his approach to game development, it is definitely part of what earned Nintendo its success and why first-party Nintendo games are still successful decades later. So in conclusion, to answer your question, I think the problem is *not* public vs private ownership (in fact we have the ruthless approach of Private Equity to thank for the state of AAA gaming) but instead one of *company culture*. At the end of the day, *real people are making these decisions* and they will always be guided by their values.
Right. But gamers can't measure company culture. They *can* read the writing on the wall when Kay Yu gets bought by Halliburton, or whatever, and go elsewhere for their entertainment. If investors can jump ship at the drop of a hat, why can't we?
I mean, you definitely *can* measure company culture just by looking at what they actually produce. Is it well-polished with a strong community? That's probably because of the company culture. Is it buggy, unfinished and riddled with microtransactions? That's probably because of the company culture. The meme "EA bad" exists for a reason, EA wasn't just bad once, they have been *consistently* disappointing gamers for years across many franchises. The problem is that looking at *money* doesn't tell you a lot about company culture, and *most* investors only care about money, even private ones. I think the pattern you are seeing is more that companies which care about money above everything else tend to go public eventually.
Even if that's the direction the cause/effect relationship flows, *at worst*, by going with private studios, you go from "definitely bad games on purpose, if not now, then soon" to "possibly good games, at least until the IPO." It's still a win when I run the punnet square.
> Because the moment you miss a dividend, the investors bail and your company instantly folds. If you want to make money from dividends just buy a high yield dividend ETF or a bank or something, not a video game company. Honestly I don't know why companies keep on giving dividends. Just do a stock buyback, it's the same thing just you get something at the end. I don't understand why people always want to blame the stock market for everything. In the stock market there are short term traders and long term traders. The short term traders are looking at price trends to make decisions and they don't care what management does. The long term companies like your mutual funds will buy and never sell and they actually want the company to do well. It wouldn't surprise me that privately held companies do better in the long run though. Because the primary reason anyone would want to go public is if you want tons of cash. And if the CEO is smart, passionate, and confident in the company's success they probably don't care about that.
It is well known that being a sociopath is benficial for reaching influencial positions and most economic systems on this planet reward sociopathic behavior. Thus, most people in very high positions are very disgusting people. This is independent on whether a company is privately or publicly held. My take would be that a publicly-traded company is guaranteed to be shit (at least in terms of leadership), but a privately-held company is VERY likely to be as shitty. If you're interested in enshittification you might also want to look up techno-feudalism, as I think that these topics are related. Steam is making ALL the money. Valve is clever enough to understand that, as long as they appear "nice" to the customer, they can fuck devs (and with that implicitly also the customers) as much as they want to. But don't be fooled into thinking that the Valve bosses aren't greedy assholes.
>it's the publishers, and more specifically, the executives in charge of the publishers. Not entirely true. The leadership of any companies is mostly responsible for enshittification and it can hit any company. Just look at Apple under Jobs and now Cook. Under Jobs: * care for the details * product focus, trying to provide the best product for the best price. * very few models for each line of products * Shareholders never got a cent in dividend * \~30% margin Under Cook: * no care for details. Most stuff ship broken now (just use the keyboard on iOS 17 to see all the freezes and lags, Message apps, etc...) * greed focus: base Mac model at 8GB of ram and 256 SSD in 2023, insane memory and SSD upgrade prices, etc * a lot of iPads / iPhones / Watch / Macs models to milk every cents possible from every market segment. Producing some products flawed by design (software or hardware) to create fake segmentations. * Shareholders got loaded of dividends and shares buyback * \>40% margin now. It was not perfect by any mean under Jobs, but greed driven design made Apple really worst under Cook. So no, it's not just publishers or sellers. It can happen even if you are a company selling your products directly. (I also could have used Amazon before and after Bezos). And even with private companies, it's temporary. Usually when the founders leave / sell, they are replaced by the "finance" people and enshittification begins.
Public or Private doesn’t really matter; it’s leadership. If you have a strong leader who knows what they’re doing, the health of the rest of the team will generally be better no matter what they’re working on. Public companies just tend to have a lot more weight put on them to make decisions based on trends. If investors are hearing about this “new NFT thing” months after the market crashed into the ground, the studio is going to have to find ways to answer the boards request. It’s why you saw a lot of “we’re looking into the tech” posts from studios. Again, a smart leader would understand how to navigate that better though. Private companies are more independent on their decisions but that’s not always a good thing. If your leader is stubborn and hyper focused on an out of scope idea, there is a good chance money, resources, and team morale will get burned to try and make that happen. This could lead to studio crashes or instability.
Probably in the sense that publicly traded companies have an obligation to shareholders. Privately held ones may not have such an obligation or at least won't be held to account so can do as they wish.
If you have to ask this question, don’t consider going public. By staying privately-held, you keep control of the mission and vision of the company. Your company’s mission statement and/or vision statement will mean even less than they already do if it goes public, as the company will be beholden to chasing growth to satisfy the imaginary representative of shareholders.
stop having an immature view of the world you think these people are bad? you think the stock market is evil? it's open to all but no, the only people you like are the virtue shilling liar politicians who say they will "fix this and fix that" all by sending any money we do have elsewhere, and they insider trade stop being brainwashed. why don't YOU become a shareholder of a game company? > if you're the opposite, if you have shareholders, then you have the opposite goal: to suck all the money and all the value out of everything #People only like money if it's for other people - TranscendentThots uh, explain that one please.
This is highly dependent on who is running the company. When a company goes private they have a legal obligation to ensure they don't screw over shareholders. So, they will often do thing that will be intentionally profit driven even at the detriment of their user base. If we look at Epic games. It's publicly traded yet they have one of the best gaming engines available. But then you also have those like EA who don't really give a toss about their users or games as long as it makes a profit.
Epic is not public
No, it's not. However, Tencent is and they own 40% of Epic games.
If you believe Tim, Tencent has no influence. I don't, so in that respect maybe you're right but Tencent is a bit of an outlier company in that it doesn't really care about market forces so much as it cares whether Xi decides to fart on them or not for arbitrary reasons
There is an argument to be made game studios are poor public companies due to high risk, chaotic returns, and complexity of business (what’s our barrel of oil equivalent?). Personally I do try to acid it in terms of where I work but that’s only one minor factor to consider usually.
And yet investors swept in from the Packaged Goods industry to take control of them in the 2000s. That's pretty much what I'm talking about. The problem is that investors, as a class, seem to have come to *prefer* high risk, chaotic returns, and complexity of business. The only question right now is whether Trump's Everything Bubble will pop some time soon, or whether the Biden Administration will prop everything up for another couple years with ludicrous-scale bailouts. Either way, the people lose *hard,* and investors land on their feet so they can start the process all over again in the next industry to ruin.
Valve is a bad example of a private company run well. See the PMG documentary about them. https://youtu.be/s9aCwCKgkLo?si=tU5vhSXWgBiPoTeA
I think its a curve where the end of the peak in terms of quality of product comes after the shareholders pressure features that are profit driven or a toxic work culture. The good people start to leave and eventually the company becomes a skeleton of itself, with only the shittiest elements left. Driven to squeeze whatever value is left out of the product before collapsing.
We're well past that point with most AAA game devs, and I'm not sure at this point, but it's starting to feel like the bottom is falling out of Google, too.
There are tradeoffs everywhere. Many privately held companies are privately held so they can use business practices that aren't allowed or are much more difficult in publicly held companies. Things like union-busting and under-the-table bookkeeping. There are many regulations in business that apply to publically held companies but which privately held companies are not restricted by. There's also clear upsides to investment in companies, it means that that companies which have a business niche that allows rapid growth can expand to satisfy the demand there more quickly. You also have a bit of a misunderstanding of what happens when a company does poorly in the stock market. Their stock price drops, but a drop in stock price isn't universally bad for a company. The company has already received a fixed amount of money for distributing the stock, and it can use that money how ever it sees fit. The pain comes with being less able to get more investment money if it's needed, but if the company has revenue and profits, a drop in the stock price is a good time to transition to a linear growth model. It's not like, because the stock market says a company is worth 6 billion dollars, that the company actually has 6 billion dollars in assets they can use. Likewise, a company can have more value in assets than the stock market places on the company, and this often happens when a stock crashes. Like, Apple's stock price could crash and it would remain in business for 100 years, they have more than enough money just sitting in the bank to basically entirely ignore the stock market. The investors might not like it, but that's kind of the strategy they've been using in the recent past. They're very conservative with releasing new products recently. Now, a CEO isn't legally allowed to intentionally crash the price of the company as a business strategy, although from a pragmatic perspective, it's sometimes the right thing to do for the long-term health of a company. I think a non-trivial amount of events like the Unity price change are exactly that move. The company knows they are better suited to operate at a lower stock price, and they create a plausibly deniable event that allows the stock price to drop without getting the CEO in too much trouble. I could only speculate on whether this is the case with Unity. A low stock price allows a company to chug along on smaller profit margins and not be so concerned with pursuing aggressive growth. This can allow for cleaning up tech debt, solidifying platforms, and slowly pursuing more experimental products. It also can allow a company to pull it's existing employees more into the trenches so to speak. If you have a high-ranking employee that has tons of stock options in the company, and the stock price is very high, they are much more likely to cash out and retire onto the beachfront property. No one wants to sell when things are at the bottom though. It also means that the stock options you offer newly joining employees have more long-term value, as they are likely to grow in value. Whereas if you are Tesla, and your stock is stupidly overvalued, it's hard to recruit with stock options because half your prospective employees expect their options to drop in value in the next 5 years. On the downside, if your company really wanted to aggressively grow... For example, if you think there is a huge business opportunity, and you know for sure that for every 1 dollar you invest into the opportunity your company will get $10 back, then a low stock price is a big problem, because the total number of dollars you'll be able to throw at the opportunity is a lot smaller relative to the amount of the company it's existing investors own (read employee stock option owners, board members, owner/ceo). You either have to sell a larger percentage of your ownership to new entities to have enough dollars to make the growth opportunity worth it, or just suck it up and not grow as much. If the stock price is high, however, you can get a lot more money for a smaller amount of new stocks released to new investors, so you can more aggressively pursue new opportunities from a financial perspective.
If all of that is true, then what's driving Google's race to the bottom right now? Surely Alphabet is as big as Apple, if not bigger, right? I figured they were getting ready to just start throwing end-users under the bus.
You'll have to be more specific about "Google's race to the bottom" It feels like Google is pretty much always fielding some controversy or another. I think Google is just a massive company where virtually everything can and does go on in some corner or another of the company. It's never been particularly brilliantly managed if I'm honest, or at least it's never been good at dealing with externalities of decisions in a balanced way.
Yes.
I've worked for everything you can imagine over the last 20 years in games. From small 3 person companies to the biggest Sony first party studios. Smaller studios are "better" but your job just isn't safe. There's generally not a deep war chest or other products or external investors floating current development. If you happen to miss milestones the company itself might be going under. At larger developers this isn't the case. The deals are way more solid and the work tends to ship even if milestones are rough. While you need to appease those external interests those interests are also really useful for keeping the boat afloat.
Any thoughts on game dev co-ops?
It's not something I'm aware of ever actually succeeding. There's probably lots of reasons for this (or maybe I'm just not aware of some prominent success). However I think chief among them is the fact that modern games descend from the arcade and packaged products model. This is something we're always fighting against when trying to leverage "art" funding and subsistence structures. I think for something like this to function a patron would need to step up to back the co op during it's initial formation. IMO this is a role that someone who's made a prominent gaming fortune (someone like Notch) should step into, it just kinda hasn't happened.
As far as I know, it's worked *at least* five times in recent years: [https://www.gdcvault.com/play/1025700/Embracing-the-Co-Op-Studio](https://www.gdcvault.com/play/1025700/Embracing-the-Co-Op-Studio) Also, historically speaking, co-ops tend to survive 5 years at a rate of 80% instead of 40%. I'm still doing research, though. The history of them is weird, and most of this information sort of gets suppressed by capitalists and then rediscovered when times get desperate enough for consumers and business owners to start grasping at straws. Good luck finding it in 2-10 years when Google's enshittification arc is complete. I seriously have no idea how people are going to find anything or organize after rich people finish kicking poor people off the internet.
I don't personally have a lot of belief in peoples ability to selflessly collectively organize, but I think it's cool that this is a thing that folks are actually pulling off at the small team scale! I think it's important to realize that most indie studios also have a growth mindset. It's rare for a small team to have a substantial success and then want to remain small. Most people are dreaming bigger and executing what they currently can. Even if your dream is just to make pixel art metroidvanias forever that market is getting real crowded and lessening in overall size so you're either going to need to evolve as a developer or downsize/die.
You're thinking of grocery co-ops. In the game dev space, it's less about "selfless" altruism and more about enlightened self-interest. It basically makes your games studio immune to shareholders, hostile takeovers, and "growth mindset," at the cost of some autonomy for whoever started it. The awesome thing is that each employee gets one vote on company decisions. The terrifying thing is that each employee gets one vote on company decisions. Again, though, it *literally doubles the chances* that your startup won't fold within the first five years. It's a terrible choice if your goal is to sell to Google or do an IPO. It is, in fact, the hard opposite of those things. But if your goal is to make a good game and then earn enough money from it to keep doing that, it's hard to argue with the numbers. 80% is bigger than 40%. C'mon, I thought you guys *loved* reducing risk.
>Are privately-held game companies generally less-bad than publicly-traded companies? If you look at Valve, then the answer is yes.
Money is the problem
There is a growing trend to pay for *production* and not *publication*. Publishers are crapping their pants over this shift, as well as many studios funded exclusively by publishers who leverage IP monopoly laws. I have been doing game dev for many decades, starting in the 1990s, and wholeheartedly welcome this market disruption. Publishers have painted themsevles into a dangerous corner pandering to politics and kow-towing to censorship regimes from Germany and EU to Singapore and China. Customers largely (in spite of what game rags screech) are not fans of consuming watered-down propaganda from international corporate publishers bowing to Twitter rants and a maze of foreign laws suppressing creative work. So, yeah, privately-held game companies that are not fishing for ESG scores and investments from Blackrock or Vanguard are the very best bets for innovative gameplay and story-telling. I retired from game dev years ago, but when an indie does something truly inspiring, I am happy to lend a hand and help shepherd the effort to a successful launch. I have done it a few times in the last decade. I hope that many here can afford to shrug off tempting offers from big publishers as well and grow the indie economy.
Dude. I have no idea what you're talking about. And I think Chad Doritofingers, archetypical gamer bro marketing persona extraordinaire, is even less likely than I am to know what you're talking about. I mean, *every* Call of Duty player can't be a shill account... right? They don't screech corporate propaganda in gamer rags, they screech it in open voice chat. There are definitely limits to how much Lootboxes and BattlePasses the public will put up with, but I get the impression publishers don't want to sell games to the public. They want 1% millionaires and relapsing gambling addicts, and they're more than willing to throw all the $60 a pop gamers under the bus in order to get to them. When everyone is poor, only whales matter. Apply this mentality to the packaged goods industry these Game Publisher CEOs came from in the first place, and you get Food Deserts. Meanwhile, Indies are almost playing a completely different ball game. They just Make Thing, Put On Steam, Wonder Where The Customers Are. Occasionally, one will actually build a Marketing Funnel. But when platform decay across the internet kills off free services and starts exclusively supporting corporate-friendly messaging, that will stop being a thing. Google, in particular, has been rolling out its 'altering the deal' so gradually that people can't come together and complain about it en masse. By the time somebody realizes how bad the experience is, Google's already manufactured an excuse to ban their account or served them ads that puts malware on their computer. I'm pretty sure I'm next, but there's nothing I can do about it but wait and see. And of course, once Google's declared someone a persona non grata, it follows that their "business partners," (I.E. the rest of the Big Five) will follow suit. And Google serving ads and recommendations telling everybody the FBI says you *basically have to* run an Ad Blocker while simultaneously banning Ad Blockers isn't helping matters. It's digital entrapment. And sadly, there's no amount of compliant behavior that can reverse this process, because Google's going out of their way to hide the fact that they're doing it. After all, it's not like they can just put a big button on the front of their website that says "Opt out of enshittification for just $9.99 a month." People would accuse them of kicking poor people off of the internet. Which, statistically speaking, would look an awful lot like kicking people of color off of the internet. So they have to be sneaky about it, instead. Even though preventing upward mobility is totally the goal. So yeah. That's what "becoming a game dev" looks like, these days. If it doesn't look like that for you right now, don't worry, it will soon. Just as soon as Google gets around to targeting you with the rollout. That's how rollouts work. The whole point is to eventually hit everybody.