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This is ultimately a supply and demand issue. Google pays high salaries because they have to in order to hire the talent they want. Game devs apparently do not

This is ultimately a supply and demand issue. Google pays high salaries because they have to in order to hire the talent they want. Game devs apparently do not have to, because they are able to fill their roles for lower salaries. Don't pretend like all tech companies wouldn't love to lower dev salaries, they just can't because they wouldn't be able to hire. Game companies apparently have a meaningful differentiator, which is that working in a gaming context is something people actually value and are willing to give up potential compensation for. This seems especially true at the junior level, which depresses junior salaries relative to other tech companies. Also, comparing compensation against US FAANG hiring is beyond insane. They pay ridiculous salaries due to the extremely limited and competitive market for hires that meet their caliber. This has driven up salaries, but should NOT be treated as an indicator for what "reasonable" pay looks like across the entire industry.

StreamBright 5y ago
And the locations FAANGs are operate also tend to be the most expensive parts of US.
- xtqctz 5y ago
  This is fact which feels related, but doesn't have much to do with labor market wage equilibrium.
  - Retric 5y ago
    High cost of living areas push people away when the local job market slumps. So, the equilibrium does end up relating to high housing costs just indirectly. Aka, if they paid less the local population drops which would reduce supply.
deleted 5y ago
[deleted]
jaaron 5y ago
It's not just that. Google (and a few others) dealt with retention issues from startups and other companies in SV who's sole recruiting strategy was poach from Google, ie- use Google as a filter and let them do all the work finding great talent and then we'll just hire Googlers (or one of the other major SV tech companies). So retention is a significant factor for Google and other FAANG companies. They can simply pay enough to make sure other companies can't come in and take their talent.
- n42 5y ago
  you just described supply and demand. supply is limited, recruiters poach, demand increases, salaries increase.
  - bawolff 5y ago
    Not really, the parent didn't say anything about overall supply, just that its cheaper to let someone else sort the diamonds from the dirt than do it yourself.
    - n42 5y ago
      recruiters resorting to cost effective measures to find qualified candidates because supply is limited
      - bawolff 5y ago
        Supply could be infinite and the same still applies. The reason people pay more for refined aluminium is not because aluminum ore is in short supply.
bedhead 5y ago
This is fairly normal for certain "glamour" industries. Back in the day when it was relevant, MTV was infamous for paying people almost nothing, for no other reason than they could because MTV had a coolness factor associated with it that people sought. Same is generally true for a lot of the entertainment industry.
- jedberg 5y ago
  Apple still uses that line to underpay people. Their compensation is famously lower than all the other FAANG companies.
  - sgerenser 5y ago
    Is that really true? Levels.fyi shows Apple right about inline with GOOG, FB and AMZN and significantly higher than MSFT for mid to senior levels.
    - kenhwang 5y ago
      Supposedly its harder getting equivalent levels at AAPL.
    - jedberg 5y ago
      Everyone I know who moved from another FAANG took a pay cut (and everyone who left Apple to another FAANG got a fat raise). So my data is anecdotal but consistent. Also MSFT isn't part of FAANG.
      - mtrpcic 5y ago
        > Until 2017, FANG was limited to Facebook, Amazon, Netflix, and Alphabet. Another variant of this acronym is "FANGAM," which includes Microsoft. https://en.wikipedia.org/wiki/Big_Tech#FAANG https://en.wikipedia.org/wiki/Big_Tech#FAANG I think Microsoft is up there and competitive in the same landscape, and calling out their lack of inclusion in the original acronym is just pedantic. Everything discussed in this thread applies just as much to MSFT as it does to any of the other FAANG companies.
Pfhreak 5y ago
> should NOT be treated as an indicator for what "reasonable" pay looks like across the entire industry. Hard disagree. The comparatively low salaries in other sectors are just that, below what workers should be earning. Things are fuzzier in the indie space, but companies like Blizzard, Activision, EA, Epic, Ubisoft, Rockstar, CDPR, etc. all pay low and absolutely rake in profits. We should call worker exploitation what it is rather than calling fair compensation at FAANG companies "ridiculous".
- sushisource 5y ago
  What you're saying really boils down to whether or not you think capitalism makes sense, which is a much bigger argument, but ignoring that -- Who defines "should be earning"? You? Currently, we let the market determine it. It's fine to say you don't like that system, but that's the argument you should make, not "Big game companies are unfair". They're just playing the game the way we set it up. Alternatively, you could maybe argue "I believe it is possible to make AAA games, pay high salaries, and actually make profits all at the same time", which would be an interesting take, and you could maybe explain how. But saying "this is worker exploitation" is an uninspired, unproductive argument, IMO.
  - pjanoman 5y ago
    I'd argue that hiding behind "we let the market determine it" is much more uninspired and unproductive. Economic research now a days is constantly showing that markets are extremely flawed. One example of that is society pressuring employees to not share their wages, which is exactly what this whole article is about.
- tptacek 5y ago
  When we talk about FAANG companies in this context, we do so with the subtext that there are so few companies that pay this way that they'd fit into a short acronym. The idea that the top of the market rate is the moral floor for compensation is hard to take seriously. Besides, people trade compensation for all sorts of things: working at a nonprofit, working in their rural hometown. Why shouldn't problem domain be one of them?

StreamBright 5y ago

And the locations FAANGs are operate also tend to be the most expensive parts of US.

xtqctz 5y ago
This is fact which feels related, but doesn't have much to do with labor market wage equilibrium.
- Retric 5y ago
  High cost of living areas push people away when the local job market slumps. So, the equilibrium does end up relating to high housing costs just indirectly. Aka, if they paid less the local population drops which would reduce supply.

deleted 5y ago

[deleted]

jaaron 5y ago

It's not just that. Google (and a few others) dealt with retention issues from startups and other companies in SV who's sole recruiting strategy was poach from Google, ie- use Google as a filter and let them do all the work finding great talent and then we'll just hire Googlers (or one of the other major SV tech companies). So retention is a significant factor for Google and other FAANG companies. They can simply pay enough to make sure other companies can't come in and take their talent.

n42 5y ago
you just described supply and demand. supply is limited, recruiters poach, demand increases, salaries increase.
- bawolff 5y ago
  Not really, the parent didn't say anything about overall supply, just that its cheaper to let someone else sort the diamonds from the dirt than do it yourself.
  - n42 5y ago
    recruiters resorting to cost effective measures to find qualified candidates because supply is limited
    - bawolff 5y ago
      Supply could be infinite and the same still applies. The reason people pay more for refined aluminium is not because aluminum ore is in short supply.

bedhead 5y ago

This is fairly normal for certain "glamour" industries. Back in the day when it was relevant, MTV was infamous for paying people almost nothing, for no other reason than they could because MTV had a coolness factor associated with it that people sought. Same is generally true for a lot of the entertainment industry.

jedberg 5y ago
Apple still uses that line to underpay people. Their compensation is famously lower than all the other FAANG companies.
- sgerenser 5y ago
  Is that really true? Levels.fyi shows Apple right about inline with GOOG, FB and AMZN and significantly higher than MSFT for mid to senior levels.
  - kenhwang 5y ago
    Supposedly its harder getting equivalent levels at AAPL.
  - jedberg 5y ago
    Everyone I know who moved from another FAANG took a pay cut (and everyone who left Apple to another FAANG got a fat raise). So my data is anecdotal but consistent. Also MSFT isn't part of FAANG.
    - mtrpcic 5y ago
      > Until 2017, FANG was limited to Facebook, Amazon, Netflix, and Alphabet. Another variant of this acronym is "FANGAM," which includes Microsoft. https://en.wikipedia.org/wiki/Big_Tech#FAANG https://en.wikipedia.org/wiki/Big_Tech#FAANG I think Microsoft is up there and competitive in the same landscape, and calling out their lack of inclusion in the original acronym is just pedantic. Everything discussed in this thread applies just as much to MSFT as it does to any of the other FAANG companies.

Pfhreak 5y ago

> should NOT be treated as an indicator for what "reasonable" pay looks like across the entire industry. Hard disagree. The comparatively low salaries in other sectors are just that, below what workers should be earning. Things are fuzzier in the indie space, but companies like Blizzard, Activision, EA, Epic, Ubisoft, Rockstar, CDPR, etc. all pay low and absolutely rake in profits. We should call worker exploitation what it is rather than calling fair compensation at FAANG companies "ridiculous".

sushisource 5y ago
What you're saying really boils down to whether or not you think capitalism makes sense, which is a much bigger argument, but ignoring that -- Who defines "should be earning"? You? Currently, we let the market determine it. It's fine to say you don't like that system, but that's the argument you should make, not "Big game companies are unfair". They're just playing the game the way we set it up. Alternatively, you could maybe argue "I believe it is possible to make AAA games, pay high salaries, and actually make profits all at the same time", which would be an interesting take, and you could maybe explain how. But saying "this is worker exploitation" is an uninspired, unproductive argument, IMO.
- pjanoman 5y ago
  I'd argue that hiding behind "we let the market determine it" is much more uninspired and unproductive. Economic research now a days is constantly showing that markets are extremely flawed. One example of that is society pressuring employees to not share their wages, which is exactly what this whole article is about.
tptacek 5y ago
When we talk about FAANG companies in this context, we do so with the subtext that there are so few companies that pay this way that they'd fit into a short acronym. The idea that the top of the market rate is the moral floor for compensation is hard to take seriously. Besides, people trade compensation for all sorts of things: working at a nonprofit, working in their rural hometown. Why shouldn't problem domain be one of them?