9 ms·

In the interest of driving conversation away from nostalgia-ism let's talk about the economics of a high-tier game career. Morhaime has now left the company he

In the interest of driving conversation away from nostalgia-ism let's talk about the economics of a high-tier game career. Morhaime has now left the company he helped found, and one he sold off eons ago. Now stepping into a new vessel he gets to sell a bit less equity this time around and bring along the cream of his leadership team. No doubt he funded the initial paperwork out of his own pocket, but soon accepted one of the flood of investment offers. It is an old play book yet no one talks about it when the play succeeds. Remember that falling out Martin O'Donnell had with Bungie? Did you notice how Martin moved on to found his own studio, one which successfully shipped a non-trivial game? Now not only does he get all the creative control he wanted, but even all of the financial upside. Video games are so successful even those people getting pushed out of the "golden castle" have the skills and connections to build their own castle. No doubt this would change if games were not such a quick growing industry, but we've maintained that growth for a couple decades now. This I think leads back to a fan favorite topic: unionization in games. For the opposite reason one might think: those successful enough to be "too important too lose" for studios are more likely setup new studios before they ever spend their political capital on unionization. This leaves the suits, who by definition are incapable of setting a studio, and the "bulk of the creative team". Hollywood could unionize because no matter how famous no star alone is capable of walking out the door to make a new studio. Thus the stars and more importantly directors saw the studios as overlords, not future peers. Games does not have that, and it is a core problem the games unionization movement needs to figure out a solution to.

WarChortle 6y ago
Actors make their own production studios all the time. That's why Hollywood unionized the way it did. A specific studio couldn't unionize because they would just get dissolved and reformed under a new LLC. No actor or famous game designer is capable of creating a AAA movie/game by themselves. They need a lot of people to work on it. The only difference is Hollywood the entire pool of workers unionized they have no choice but to hire a union worker. Game designers/programmers need to follow the same formula. The two industries have exactly the same problem, Hollywood workers have been around long enough to figure out the solution.
- germinalphrase 6y ago
  As a former member of Local 600 - saying “the entire pool of workers unionized” is inaccurate. A significant number of feature films are produced ever year with non-union crews. They may or may not know what they’re doing, but they exist. I worked on them prior to joining the Cinematographer’s Guild (you have to start somewhere). Also of note, the various film industry unions were largely created back in the day when unionization was generally more popular in society. They have remained strong - like steelworkers - because the protections are worth joining, apprenticeship and training is available/valuable, and the working conditions are often potentially hazardous. People Don’t realize, but industry workers get injured/die every year on movie sets (though it is better than it used to be).
  - phaus 6y ago
    >People Don’t realize, but industry workers get injured/die every year on movie sets (though it is better than it used to be). Is this largely due to construction projects like sets and the use of heavy equipment, or is it more from stunts or something else I haven't considered? Also, since you're an insider, when they build sets and props and stuff, do they still have to follow OSHA requirements and get safety inspections and stuff?
    - germinalphrase 6y ago
      Q1: all of the above. Moving vehicles and equipment. Stunts/practical effects/etc. High power lighting and electrical cords strung everywhere. Tripping hazards. Falling hazards. Oh, and as a rule, never get in the helicopter. Q2: I don’t know. I imagine it depends on how much is being built and how controlled the environment would be. Edit: I should also stress the impact of sleep deprivation on accidents and mistakes. Filmmaking hours are often pegged at 12+ as a standard day, and a well financed production won’t bat an eye at paying the penalties to push a crew.
      - walshemj 6y ago
        I was talking with some one in Prospect/BECTU (IATSE) and she mentioned her first job was on Coronation Street helping the older actors onto set and making sure they didn't trip over any thing. I was/am on the same committe (SOC)
objclxt 6y ago
> Hollywood could unionize because no matter how famous no star alone is capable of walking out the door to make a new studio. I don't think that's quite true: United Artists was founded specifically by stars that walked out of the door, hence its name. And today lots of stars have their own production companies, and the studio simply acts as the distributor. They handle getting the movie into cinemas, but otherwise don't have a financial stake. Some examples that come to mind: * Will Ferrell: Gary Sanchez Productions * Tom Cruise: Cruise/Wagner * Adam Sandler: Happy Madison * Brad Pitt: Plan B * Shonda Rhimes: Shondaland Both Shondaland and Happy Madison aren't beholden to regular studios at all, they simply have multi-picture deals with the highest bidder (in both cases, Netflix).
rmah 6y ago
Well... first, the "studio system" where actors were tied to a single studio by contract hasn't held sway for half a century. Talent (stars and especially directors) have been founding their own studios off and on for a century now. Examples: United Artists was started in 1919 by W.D. Griffith, Charlie Chaplin, Mary Pickford and Douglas Fairbanks. Or Mercury Theater, founded by Orson Wells and Houseman. Dreamworks, founded by Spielberg (and Katzenberg and Geffen). And there are dozens of production companies owned by actors and directors. Many of these firms eventually get acquired by major studios. While it may be easier to find success with an indie game than an indie film, I don't see why one is easier than the other assuming the team has the appropriate skillset. The parallels between film making and game making are quite substantial, IMO. Both the business and process.
yread 6y ago
Let's hope it turns out as well as Dan Vavra's founding Warhorse and making Kingdom Come: Deliverance after making Mafia.
brundolf 6y ago
You're missing a big factor: money. It takes significant capital to start your own studio. In games, only the founders are making real cash, and only if they're actually successful the first time around. Programmers make significantly less than they do in other fields, for example. And then in terms of reputation, very few people in games - usually designers - are household names. I'm talking maybe a dozen or two people in the entire industry (vs hundreds in film). And I would assume that it's very hard to get outside investment without that star power. Finally, games is an enormously crowded space. Thanks in part to the massive influx of indies, improvement in tools, etc there's an insane amount of oversaturation on platforms like Steam. This means that thousands of high-quality games go completely unnoticed and die a quiet death. Unless you have that star power to get people paying attention in the first place, or you win the social media lottery and go viral, you're probably toast. So yes, the market is huge and growing, but despite that it remains a really brutal industry to be in. Big studios know this, and they take full advantage of it, knowing that their employees would likely have it even worse if they left.
- echelon 6y ago
  What can fix this? If everyone adopts the same game engines and assets become cheap and easy to produce, could there be a renaissance of small gaming studios that are sustainable and pay competitive wages? What's the blocker? Why aren't things better?
  - manfredo 6y ago
    There's no way to "fix" the laws of supply and demand. Making games is a lot of people's dream jobs. People are willing to take a pay cut and worker longer hours to have a job in the game development industry. Same reason why you have aspiring actors working tables to make ends meet.
  - RadiateMate 6y ago
    Platforms like Steam giving 20% to everyone.
  - imtringued 6y ago
toby 6y ago
From Wikipedia: "Many high-profile actors refused to join SAG initially. This changed when the producers made an agreement amongst themselves not to bid competitively for talent." Tech companies have tried this in the past, now this would typically be met with an antitrust suit rather than creating a guild. Not sure which is preferable.
- gamblor956 6y ago
  With an antitrust suit: grievances are addressed years after the fact, if at all, with little meaningful compensation for the aggrieved employees. With a guild/union: grievances are addressed immediately or before they occur (depending on the structure of work contracts), minimizing the economic suffering to employees. Generally, from the perspective of employees, guilds/unions are better. EDIT: a "guild" is a union for independent contractors.
  - smogcutter 6y ago
    For a similar reason, it seems to me that unionizing is the answer for uber/lyft drivers to get protections they want without being tied down as permanent employees. The list of reasons unionizing drivers would be difficult to impossible is long and obvious, but the outcome would surely be better than some hamfisted state law. Also, right now uber is framing the issue as drivers vs the state. A union push would make it uber vs the drivers, much harder to spin.
    - gamblor956 6y ago
      Technically, non-wage workers (i.e., independent contractors), would form a guild rather than a union.
      - walshemj 6y ago
        Are sure about that you can call your self a guild or the BMA but you are a union.
    - naravara 6y ago
ChuckMcM 6y ago
As others have pointed out this is a very old design pattern. In tech, it is this: Stage 1: Graduate college and get hired by a growing company. Observe all you can about what works and what doesn't while networking with the best people. Ideally a public company so that you can participate in its growth through equity ownership (stock options, employee purchase plans, Etc.) Stage 2: Found (or join as founder) startup composed of good engineers you know, that is funded by VC money. Build it up to an exit to get a bigger slice of the pie given your greater equity. Stage 3: Found a new company where it is primarily funded by your founders and not VC. Build that company up to an exit and you and your friends collect the big bucks as you still own most of the equity. At this point you're independently wealthy and can do what ever you want with your life[1] It has been the "silicon valley dream" for a lot of people over the last 30 years. And since each stage is typically 4 - 6 years that is really a 15 to 20 year plan. Doesn't work for everyone though, and I have observed that people who are on this trajectory and recognize they are unlikely to reach orbit (so to speak), can get pretty vicious. You have a relatively short window to decide if the current stage is going to meet your goals for that stage or not, and if a stage doesn't provide the necessary lift, you probably only get one additional shot at making it work. As a result this path also leads to a place of depression for some. [1] Assuming along the way you've learned to manage your wealth in a sustainable fashion.
- markus_zhang 6y ago
  Nicely summarized.
- stingraycharles 6y ago
  > Doesn't work for everyone though I’d say that there is an extremely small portion of people that are able to complete Stage 2. “Doesn’t work for everyone” seems like an understatement. Stage 3 is probably easier to do once you completed stage 2, but still is very difficult. Really, how many people can you count that would have successfully pulled this off? 100 maybe?
  - ChuckMcM 6y ago
    My guess would be a few thousand in the Bay Area. Crunchbase could probably give you a better number by doing a bit of data mining on their database to find former Sun, Yahoo, Amazon, Facebook, Tesla, Apple, and Google employees who have gone on to create startups and exited those startups. Those companies alone have minted > 10,000 multi-millionaires who were simply employees at the company either prior to an IPO or prior to a large run up in value (like Apple). Of people I know who have stepped off at stage 2, they pocket enough wealth that they no longer have to work to maintain a moderate lifestyle, and then move to a place that interests them and work on other pursuits.
thisalreadyiss 6y ago
Well, the physical engineering world already has an alternative to unionization: contracting firms. The best mechanical, electrical, and chemical engineers in the world work for big engineering firms (and make mega bucks). We have a few relatively small contracting firms in software right now, but there is no reason why we could not have large Software Engineering firms that can handle entire design and engineering for any game studio far better and more efficiently than the studios could ever do themselves. For example, if the top 1000 game designers and developers started their own firm, then I imagine every studio would be forced to use them at whatever price for competitive reasons. Are you a VC? Invest in that. Insta-monopoly. Top talent (especially in bulk) is very much the most difficult thing to replicate in any market.
asdasfasdfasdf 6y ago
oy, if I had a dollar for every creative team that got left behind... I'd start my own studio.
megameter 6y ago
One of the issues that has made it difficult to discuss labor in games generally is a lack of any role standardization. This has calmed down somewhat as more and more games turn towards standardized content creation systems, but the whole endeavor historically has been completely upended on four year cycles, with games made by solo teenagers usurped by those made by teams, and then by teams with marketing and sales backing, and then by teams with increasingly higher specialization, with new waves of hardware at each turn. The people in these high profile roles that gather as "founding core members" often found themselves in the position of right-place-right-time and afterwards just tried to keep up with the changes, and so, to some extent, they end up branded as creative and business talents, when the thing being tested most often in their career was their ability to sufficiently manage and delegate to get the project over the finish line. So every time I see a story of a AAA vet starting something new I think to myself "prepare for some hard knocks", cause they are now being retested on their scrappy start-up abilities, but often get burdened by the expectations of an established studio, and entrenched in a particular approach. They can raise a lot but very often it means they fail big, too.

WarChortle 6y ago

Actors make their own production studios all the time. That's why Hollywood unionized the way it did. A specific studio couldn't unionize because they would just get dissolved and reformed under a new LLC. No actor or famous game designer is capable of creating a AAA movie/game by themselves. They need a lot of people to work on it. The only difference is Hollywood the entire pool of workers unionized they have no choice but to hire a union worker. Game designers/programmers need to follow the same formula. The two industries have exactly the same problem, Hollywood workers have been around long enough to figure out the solution.

germinalphrase 6y ago
As a former member of Local 600 - saying “the entire pool of workers unionized” is inaccurate. A significant number of feature films are produced ever year with non-union crews. They may or may not know what they’re doing, but they exist. I worked on them prior to joining the Cinematographer’s Guild (you have to start somewhere). Also of note, the various film industry unions were largely created back in the day when unionization was generally more popular in society. They have remained strong - like steelworkers - because the protections are worth joining, apprenticeship and training is available/valuable, and the working conditions are often potentially hazardous. People Don’t realize, but industry workers get injured/die every year on movie sets (though it is better than it used to be).
- phaus 6y ago
  >People Don’t realize, but industry workers get injured/die every year on movie sets (though it is better than it used to be). Is this largely due to construction projects like sets and the use of heavy equipment, or is it more from stunts or something else I haven't considered? Also, since you're an insider, when they build sets and props and stuff, do they still have to follow OSHA requirements and get safety inspections and stuff?
  - germinalphrase 6y ago
    Q1: all of the above. Moving vehicles and equipment. Stunts/practical effects/etc. High power lighting and electrical cords strung everywhere. Tripping hazards. Falling hazards. Oh, and as a rule, never get in the helicopter. Q2: I don’t know. I imagine it depends on how much is being built and how controlled the environment would be. Edit: I should also stress the impact of sleep deprivation on accidents and mistakes. Filmmaking hours are often pegged at 12+ as a standard day, and a well financed production won’t bat an eye at paying the penalties to push a crew.
    - walshemj 6y ago
      I was talking with some one in Prospect/BECTU (IATSE) and she mentioned her first job was on Coronation Street helping the older actors onto set and making sure they didn't trip over any thing. I was/am on the same committe (SOC)

objclxt 6y ago

> Hollywood could unionize because no matter how famous no star alone is capable of walking out the door to make a new studio. I don't think that's quite true: United Artists was founded specifically by stars that walked out of the door, hence its name. And today lots of stars have their own production companies, and the studio simply acts as the distributor. They handle getting the movie into cinemas, but otherwise don't have a financial stake. Some examples that come to mind: * Will Ferrell: Gary Sanchez Productions * Tom Cruise: Cruise/Wagner * Adam Sandler: Happy Madison * Brad Pitt: Plan B * Shonda Rhimes: Shondaland Both Shondaland and Happy Madison aren't beholden to regular studios at all, they simply have multi-picture deals with the highest bidder (in both cases, Netflix).

rmah 6y ago

Well... first, the "studio system" where actors were tied to a single studio by contract hasn't held sway for half a century. Talent (stars and especially directors) have been founding their own studios off and on for a century now. Examples: United Artists was started in 1919 by W.D. Griffith, Charlie Chaplin, Mary Pickford and Douglas Fairbanks. Or Mercury Theater, founded by Orson Wells and Houseman. Dreamworks, founded by Spielberg (and Katzenberg and Geffen). And there are dozens of production companies owned by actors and directors. Many of these firms eventually get acquired by major studios. While it may be easier to find success with an indie game than an indie film, I don't see why one is easier than the other assuming the team has the appropriate skillset. The parallels between film making and game making are quite substantial, IMO. Both the business and process.

yread 6y ago

Let's hope it turns out as well as Dan Vavra's founding Warhorse and making Kingdom Come: Deliverance after making Mafia.

brundolf 6y ago

You're missing a big factor: money. It takes significant capital to start your own studio. In games, only the founders are making real cash, and only if they're actually successful the first time around. Programmers make significantly less than they do in other fields, for example. And then in terms of reputation, very few people in games - usually designers - are household names. I'm talking maybe a dozen or two people in the entire industry (vs hundreds in film). And I would assume that it's very hard to get outside investment without that star power. Finally, games is an enormously crowded space. Thanks in part to the massive influx of indies, improvement in tools, etc there's an insane amount of oversaturation on platforms like Steam. This means that thousands of high-quality games go completely unnoticed and die a quiet death. Unless you have that star power to get people paying attention in the first place, or you win the social media lottery and go viral, you're probably toast. So yes, the market is huge and growing, but despite that it remains a really brutal industry to be in. Big studios know this, and they take full advantage of it, knowing that their employees would likely have it even worse if they left.

echelon 6y ago
What can fix this? If everyone adopts the same game engines and assets become cheap and easy to produce, could there be a renaissance of small gaming studios that are sustainable and pay competitive wages? What's the blocker? Why aren't things better?
- manfredo 6y ago
  There's no way to "fix" the laws of supply and demand. Making games is a lot of people's dream jobs. People are willing to take a pay cut and worker longer hours to have a job in the game development industry. Same reason why you have aspiring actors working tables to make ends meet.
- RadiateMate 6y ago
  Platforms like Steam giving 20% to everyone.
- imtringued 6y ago

toby 6y ago

From Wikipedia: "Many high-profile actors refused to join SAG initially. This changed when the producers made an agreement amongst themselves not to bid competitively for talent." Tech companies have tried this in the past, now this would typically be met with an antitrust suit rather than creating a guild. Not sure which is preferable.

gamblor956 6y ago
With an antitrust suit: grievances are addressed years after the fact, if at all, with little meaningful compensation for the aggrieved employees. With a guild/union: grievances are addressed immediately or before they occur (depending on the structure of work contracts), minimizing the economic suffering to employees. Generally, from the perspective of employees, guilds/unions are better. EDIT: a "guild" is a union for independent contractors.
- smogcutter 6y ago
  For a similar reason, it seems to me that unionizing is the answer for uber/lyft drivers to get protections they want without being tied down as permanent employees. The list of reasons unionizing drivers would be difficult to impossible is long and obvious, but the outcome would surely be better than some hamfisted state law. Also, right now uber is framing the issue as drivers vs the state. A union push would make it uber vs the drivers, much harder to spin.
  - gamblor956 6y ago
    Technically, non-wage workers (i.e., independent contractors), would form a guild rather than a union.
    - walshemj 6y ago
      Are sure about that you can call your self a guild or the BMA but you are a union.
  - naravara 6y ago

ChuckMcM 6y ago

As others have pointed out this is a very old design pattern. In tech, it is this: Stage 1: Graduate college and get hired by a growing company. Observe all you can about what works and what doesn't while networking with the best people. Ideally a public company so that you can participate in its growth through equity ownership (stock options, employee purchase plans, Etc.) Stage 2: Found (or join as founder) startup composed of good engineers you know, that is funded by VC money. Build it up to an exit to get a bigger slice of the pie given your greater equity. Stage 3: Found a new company where it is primarily funded by your founders and not VC. Build that company up to an exit and you and your friends collect the big bucks as you still own most of the equity. At this point you're independently wealthy and can do what ever you want with your life[1] It has been the "silicon valley dream" for a lot of people over the last 30 years. And since each stage is typically 4 - 6 years that is really a 15 to 20 year plan. Doesn't work for everyone though, and I have observed that people who are on this trajectory and recognize they are unlikely to reach orbit (so to speak), can get pretty vicious. You have a relatively short window to decide if the current stage is going to meet your goals for that stage or not, and if a stage doesn't provide the necessary lift, you probably only get one additional shot at making it work. As a result this path also leads to a place of depression for some. [1] Assuming along the way you've learned to manage your wealth in a sustainable fashion.

markus_zhang 6y ago
Nicely summarized.
stingraycharles 6y ago
> Doesn't work for everyone though I’d say that there is an extremely small portion of people that are able to complete Stage 2. “Doesn’t work for everyone” seems like an understatement. Stage 3 is probably easier to do once you completed stage 2, but still is very difficult. Really, how many people can you count that would have successfully pulled this off? 100 maybe?
- ChuckMcM 6y ago
  My guess would be a few thousand in the Bay Area. Crunchbase could probably give you a better number by doing a bit of data mining on their database to find former Sun, Yahoo, Amazon, Facebook, Tesla, Apple, and Google employees who have gone on to create startups and exited those startups. Those companies alone have minted > 10,000 multi-millionaires who were simply employees at the company either prior to an IPO or prior to a large run up in value (like Apple). Of people I know who have stepped off at stage 2, they pocket enough wealth that they no longer have to work to maintain a moderate lifestyle, and then move to a place that interests them and work on other pursuits.

thisalreadyiss 6y ago

Well, the physical engineering world already has an alternative to unionization: contracting firms. The best mechanical, electrical, and chemical engineers in the world work for big engineering firms (and make mega bucks). We have a few relatively small contracting firms in software right now, but there is no reason why we could not have large Software Engineering firms that can handle entire design and engineering for any game studio far better and more efficiently than the studios could ever do themselves. For example, if the top 1000 game designers and developers started their own firm, then I imagine every studio would be forced to use them at whatever price for competitive reasons. Are you a VC? Invest in that. Insta-monopoly. Top talent (especially in bulk) is very much the most difficult thing to replicate in any market.

asdasfasdfasdf 6y ago

oy, if I had a dollar for every creative team that got left behind... I'd start my own studio.

megameter 6y ago

One of the issues that has made it difficult to discuss labor in games generally is a lack of any role standardization. This has calmed down somewhat as more and more games turn towards standardized content creation systems, but the whole endeavor historically has been completely upended on four year cycles, with games made by solo teenagers usurped by those made by teams, and then by teams with marketing and sales backing, and then by teams with increasingly higher specialization, with new waves of hardware at each turn. The people in these high profile roles that gather as "founding core members" often found themselves in the position of right-place-right-time and afterwards just tried to keep up with the changes, and so, to some extent, they end up branded as creative and business talents, when the thing being tested most often in their career was their ability to sufficiently manage and delegate to get the project over the finish line. So every time I see a story of a AAA vet starting something new I think to myself "prepare for some hard knocks", cause they are now being retested on their scrappy start-up abilities, but often get burdened by the expectations of an established studio, and entrenched in a particular approach. They can raise a lot but very often it means they fail big, too.