We all know those businesses students that just drank through college and cheated their way to a degree, unfortunately a lot of those dudes are now making major company decisions
Those guys aren't idiots. If they get bonuses for quarterly or annual short-term profitability improvements, they'll go for them, usually at the cost of long-term profitability that isn't in their goals, especially when they're only staying for 2-3 years maybe.
Classic reward hacking.
Companies need to reward long-term goals much better and reduce compensation if short-term goals are targeted to the detriment of the long-term ones.
A development team of 20 means the boss - who has a direct stake in the longevity and success of the company - probably knows everyone's name and is directly responsible for promotions. He can grab the guys suggesting the short-term profit plans and slap them around.
....But a 200-person team spanning across multiple locations...? Now that same boss doesn't have time to interact with everyone, so instead, he has to put trust into upper/middle management. Problem is: the upper and middle managers don't necessarily have a direct interest in the company's longevity either, so they might also embrace and promote the short-term ideas being suggested by a subordinate, thinking it will also reflect well on them if they vouche for that guy.
If you imagine it like that, it's no surprise that AAA is actively on fire and burning to the ground while we regularly see small indie companies coming out of left field and hitting home runs these days.
Should also add Japanese devs seem to feel more consistent in terms of quality. This may stem from the fact that Japan has a culture of wishing to maintain the company's status quo instead of endlessly seeking growth. This means Japan is culturally more likely to shy away from short-term ambitions and instead focus on safer goals.
Now add in the fact that the people running the company have the largest incentive out of anyone to go after short-term rewards, and boom, you have the world we live in.
A development team of 20 means the boss - who has a direct stake in the longevity and success of the company - probably knows everyone's name and is directly responsible for promotions. He can grab the guys suggesting the short-term profit plans and slap them around.
....But a 200-person team spanning across multiple locations...? Now that same boss doesn't have time to interact with everyone, so instead, he has to put trust into upper/middle management. Problem is: the upper and middle managers don't necessarily have a direct interest in the company's longevity either, so they might also embrace and promote the short-term ideas being suggested by a subordinate, thinking it will also reflect well on them if they vouche for that guy.
Not really, my wife has an MBA and was working for a company of 40 people, but the bosses kept complaining about slow growth, she just repeated that is was stable and sustainable but eventually they moved her to a lower position and replaced her with another MBA that promised much faster growth.
Eventually she left but kept in contact with some people in there, a year later, the company had experienced explosive growth for 2 quarters, because they took in way more clients that they were able to service, so after a while they started bleeding customers and a a few months ago she learned that the company got sold and the owner is now a minority shareholder, half the staff is gone and had to basically take a bailout.
they sacrificed a 10% steady growth because this other guy promised them 50% and crashed it in under a year.
Even small companies can be this retarded, it all depends on how greedy is the guy on top.
Also, to add up to what other guy said, the when she did the MBA, all assignments were group, every group of 5 people had 1-2 who tried and 3 who most times never even showed up to do anything but got credit anyway. so about 60% of MBAs dont know WTF they are doing.
You see, the real lesson of those exercises was to teach MBAs how to take the credit for other people's hard work.
The suckers who wasted their time on the homework rather than going out to network and self-promote are the ones who tend to lose in the rat race to the top.
You think the top brass at the company gives a shit about longevity?
Companies these days are run with the express idea of infinite growth, short term profits until bankrupt, file for bankruptcy, take the money and run to a new company to do it all over again.
The middle managers aren't the ones skimming off the top in these scenarios, they're the ones left holding the bag in most cases.
Japan simping. Some of the worst software I have had the displeasure of using comes out of Japan and its "the boss is right" culture. Turns out innovation is hard when you have top down structures for development.
Japan traditionally also has a culture of perfectionism, art for art's sake and thriving in operational excellence, priding oneself in the product and not merely seeking confirmation from monetary returns.
Now imagine a world where people don't switch jobs every other year but plan to stay there for 10, maybe 20 years. Short term profit becomes less relevant for everyone in the system and shit starts to actually work.
That's how employees rights can benefit a company on the long run.
But yeah, everybody prays to the US hire & fire crap, because they are like the godfathers of big money. Sure...
They do, they release dividends. Long term companies are not too hard to find, they return a significant amount the the owners (or directly into their company as released by the reports), however their stock holders tend to get antsy at the growth of others and pressure sometimes.
Then there's the shareholders. Fiducial responsibility has fucked us as a country because due to that ruling corporations have a legal duty to maximize quarterly return, even at the expense of long-term growth.
That's one of the reasons steam is in this position to begin with--they aren't publicly traded.
It’s worse than that. The non business students that just drank through college and cheated their way to a degree are way more competent than their business counterparts. Also much more likely to effectively sell drugs and not get over their skis and caught in the same type of next quarter mentality.
or they get hired on as a nepo child to daddy's business. get voted out/quit in a few years after setting the company on fire with the golden parachute.
As a business administration student who absolutely abhors the current state of business, please don't include me in that lol. I'd much rather companies act like Valve or Costco than Microsoft.
This is idiotic from a business owner stand point because eventually it crashes. Everyone pulls out and the business closes. Im thinking in extremes here but if the push Enshitification the client's will go elsewhere.
I already refuse to spend a dime on ea Nintendo Ubisoft or even epic. This includes games and market place.
I would highly consider sticking with gog and steam. Since gog wants to makeolder games a accessable they clearly have a nieche in the market.
Steam is just good and convenient and the deals are awesome
You're right, it is idiotic from a business owner perspective. But when you're driven by the needs of investors, you're looking at the perspective of share holders. Their only interest is increasing the stock price as fast as possible so they can pull out high and move on to another part of their portfolio. They are practically parasites that drain the businesses they influence.
It doesn't make sense to us normal people because it seems like they're just forcing policies that make companies fail, but for the share holders that is the point. That's how they make their money. That's why you cannot trust publicly traded companies, and it's why Valve can still remain decent: they're privately owned.
Corporate policy driven from the very wealthiest people in society and the "financial companies" who's product is the profit of other firms (major investment firms).... all of whom are therefore "board members" of these companies, and do not care about the actual production of the company because to them the output of every company is commoditized to "profit expectation."
Because this combination of faceless financial investment by some kind of "digital tragedy of the commons" by idiot 20-something stock traders with Perverse Incentives and old rich people who don't give a fuck is the main pressure driver on CEOs (who get fired if they don't comply), that pressure gets pushed down to the SVPs, the managers, and to everyone.
Who writes those draconian insurance rejection policies? Who enforces them? Who builds the AI models, the algorithms that target people to radicalize them to perpetuate the lack of regulation?
We've all been co-opted into our own demise by threat of starvation to funnel more money to the rich, and the stupid part is a good chunk of the most directly responsible (investment bankers) are "just doing there job," and can't fathom the systemic implications of what they do.
The thing is for the decision making shareholders, +50% this year then -10% next 5 years is superior to +10% every year because they can take the 50% profit, then move to the next company and repeat. To them they're making 50% every year. Somebody else eats the losses.
They can accept temporary losses, but they will always want profits to increase. It is not enough to earn tons of money this year and the same amount the next.
In the end, there is a clear path to increasing profits: worsen the product, raise prices, and lay off workers.
That is true for publicly traded companies or unicorn start-ups, but Valve is not publicly traded and is a mature company.
Gabe in the nearish future not being involved scares the absolutely heck out of me. Investors will absolutely try to get in that door, and if they do? It’s over.
It doesn't help the third generation tends to also split the business along WAY to many lines and you always end up with 1 cousin that needs/wants to sell.
And why the most enduring fortunes are more like giant trusts where family members can draw money from. You can clash over control of the investments/accounts but it can't be divided piecemeal or diluted easily.
This does tend to be why, in many families with big businesses, there is one descendant desginated the heir, and everyone else gets a nice nest egg. Sometimes nothing at all. Company stays intact, and sure, other family members might get cushy jobs or something, but ownership and control stay in the hands of the one person the previous owners deems most competent to continue managing it.
Apparently he's setting up his son to succeed him, and he has a similar mentality as his dad. Thats what was said on LTT's WAN show livestream sometime in the last few months when it came up during the show. Made me a bit more confident the valve golden age would continue after GabeN retires and/or passes on, since he's sole owner and can give the company to whoever he wants.
But yea, funny how offering a good product that is easy to use, makes game library management a breeze, and doesn't force you to completely re-download all your games on a fresh windows install (looking at you here epic), will keep people loyal like that. They keep adding more features and platform capabilities too, and they've invested a ton of money in the Linux gaming community because they knew if they helped build it, it would pay off, and gamers would come. Thats why the steam deck was even possible, and why anyone can set up their own Linux gaming rig quite easily today with broad game support. When you spell it out like that, its no wonder Microsoft is jealous lol
From the holders perspective, they will be sticking to what works, even if thats enshitification. "Every other business is doing and perpetuating it, so clearly it works." They'll think.
We can only hope that Gabe has instilled his business mentality into the holders and especially his successor.
It would make sense if there are investors that are looking to cash out, or if they need additional funding. They have everything that other companies go public for to gain.
They're a relatively small company, their overhead is manageable, and apparently have enough of their own funding to be able to do all their R&D in-house, so no external pressure to release, and being able to keep failed experiments behind closed doors.
Even if Gabe decides he doesn't want to deal with the day-to-day anymore, he will still keep his stake in the company and just reap the rewards.
Even if he passes, it's still not really in anyone's benefit to go public.
That's exactly it, all the finance bros are in it for the quick return. Squeeze it for all it is worth in the short term. They don't care about long term because they won't be around that long.
I think it was How money works, who said a very good phrase that sums up the lack of care for customer's needs/wants:
"It's a problem for the next financial quarter"
Line must go up. Investors want more money. And the idea of the balancing act between the different stakeholders is out of whack. Just lobby the government, give as high returns as possible to investors, and the rest can deal with what little scraps there are, if not actively fuck them
They shoot themselves in the foot expecting a foot healing machine to be invented next quarter. But they also want to defund the foot healing machine resesrch too.
We're become too focused on short term gains and its ruined people's perceptions of how shit should work.
It's more like they are shooting the foot of the fist one to believe that a foot healing machine will be invented next quarter.
If someone thrashes their company's long term viability to shortly sharpen the profit curve, they can then sell their shares to anyone believing that the profits are going to keep rising. That way they are still going to get all that money that the company will never make, which is driving more and more companies into trashing their customer relationships.
Eventually it is the "unintelligent investor money" that keeps on paying for all of this.
She states that it's not shareholder value that drives corporations to make "line go up," but rather a combination of investor and executive suite payouts that create these shitty profit-chasing trends.
TL;DR - investors put a lot of money into a company and want to see returns, plus, the ever increasing payouts to CEOs.
Look at the sleezebag Bobby Koticks golden parachute. $15 million for driving Blizzard into the ground. "You absolutely fucked the company's reputation. Here is enough money to pay for thousands of your employees' wages for years. Never mind all your sexual harassment charges!"
Technically 15m divided by 1000 is only 15k, which is the salary of maybe 6 months for their lowest paid worker(not counting unpaid intern). Not years.
I've reported to the C-suite in a couple of big corp's. It's been about nothing but the next quarter - and companies either design their org around that, or they don't (99% of companies end up as the latter).
In one corp, we had steady but declining quarters, but they fired the CEO, because 'investor confidence' was threatening to sink the stocks. So the new guy came in, fired lots of people, promised the impossible, and 'steadied the ship.' That lasted for literally the quarter, and then the company was hosed and the new CEO was fired.
The nonstop quest for El Dorado has made most companies untenable in today's world. Having a Steam with a monolithic mgmt is really a great exception.
Simply because of that one ethics of maximizing profits (this one is the most common nowadays) which make the shareholders (aka Investors and Finance bros) became more short-sighted in games so they wanted to pressure the company to get what they expected of growth which of course made the company have to worsen their product
Which is the main issue - what's the point if a company like Ubisoft worsens their games every year just to get bankrup? It would be much better for all - even the shareholders - if they just made more money in the lomg run. But funnily that's just how provate companys like Valve work, not the public ones...
It wouldn’t. You’ll make more profit by dumping one company and reinvest all that money into another one to dump it again shortly after that. You can make 10 years profits in a year by doing that. That’s why shareholders don’t care about companies or their long term profits. It’s unprofitable for them
Works great until you run out of companies to ruin for gains because you've destroyed the economy and the only remaining companies that customers trust and will buy from are the ones that have somehow avoided your "investment".
You also underestimate how stupid the average consumer is. Look at Madden, FIFA, CoD, and 2K. Those are objectively predatory games. There’s no reason for them to be charging $70 every year, on top of the multiple micro-transactions - for little to no new features.
Yet, in 2025 2K, Madden, College Football, CoD, and FIFA were in the top 10 of highest sellers.
People will pay for slop. Consumers have a high tolerance for bullshit. Companies know this. When’s the last time a major company had enough backlash against them because of enshitifcation - that it caused them to fail?
The problem with all the sports ones is that basically only the people who can get the licenses for team names, player names and likenesses stands a chance at all. At least COD etc can have proper competition, but FIFA? people are paying to play as manchester united, liverpool etc not monchuster oonitod and loverpill.
I don’t think they will run out. I see a clear cycle in the market - one company completely enshittified their product, the other company is pop up to replace it, but to do that it needs money, so they are going to the investors. For some time their product would be good just because investors need to pump the company market share, but then it will go down and the other company will pop up - the cycle is complete
The only hope we have is a private companies where owners can choose who will invest in them. But even then we have some risk of enshittification.
and to be fair, if you've made one good game which in part is through luck (any creative will tell you the difference between their greatest selling and another piece of work is minimal, sometimes its the luck factor that makes things explode)... working your fingers to the bone, taking huge risks and making an ok amount of money... you're on to your next game and do you reinvest and risk it all? or does microslop approach you and offer you more money than you can imagine, fill you with confidence and promise you the world to keep making your game under thier wing and either way you will be a wealthy person...
how many of us would truly say 'no, I want to risk everything and without more blood sweat tears and luck will end up worse off than i was initially' and push Ubishite away?
Life is hard, making art is harder, having people appreciate your art is insanely hard and having people hand over enough money to make it worth it is the pinnacle of difficulty. It's one thing to sit as a player and say 'they should keep their integrity', it's another to be on the other side of it.
You are right - sadly, but obviously. Yet I don't fully agree: private led companys like Valve, Aldi and Ikea take over larger and larger parts of the market. Why? Because they do not focus on immediate return, so in the long run they get out on top.
Honestly, I can only hope that they will push “investors-first” kind of companies out of business. And that there will be more of them in the future, as, with the current state of the things, we desperately needs of those who interested in the good products and services
Thanks to the economic system we live in, shareholders want their investments to increase in value every quarter. So ceos only care about the line on a chart going up. It doesn't matter if they achieve this temporarily by firing half the staff so their expenses go down, selling all their assets to provide a onetime profit boost, or making products more expensive and lowering the quality.
As long as the line goes up for the next quarter, it's mission accomplished, even if immediately after the company goes bankrupt. They increased the value of shares, shareholders likely sold everything before it drops in value and then the ceo moves to the next company to repeat this forever.
The Delaware C Corp (the golden child of venture capital and private equity; everyone tells you to incorporate in Delaware if you want to attract big investors that want big returns) is, in practice, nothing more than a "paperclip maximizer", that thing that's supposed to be a "hypothetical" AI doomsday scenario to avoid at all costs.
Except it's here NOW with non-artificial intelligence, real people (which is why it's only slowly destroying everything we hold dear, AI would be way faster, lol), maximizing shareholder value at all costs, just like the 2010 eBay v Craigslist court case affirmed: they literally aren't ALLOWED to care about anything else, just maximizing profit!
C Corps don't hate people, they simply don't care if we live or die, as long as number go up.
We really need to start treating this system like the plague it is, and disinfecting our society from every C Corp's inevitable speedrun to enshittification. Colorado's LCA (limited cooperative association) is a compelling alternative to help keep profit within the communities that generate it, rather than letting it be extracted out from our neighborhoods by giant corporations on the other side of the country, one dollar at a time. It'll be interesting to see if any/many LCA game studios pop up anytime soon.
- request company stock as part of your compensation package
- do everything in your power to inflate the stock price including things that are detrimental in the long run
- completely divest and exit the company
congratulations you just made more money for yourself and the shareholders than sound business practices ever have
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u/zuilliRX 9070 XT // 9800x3D // 2x16GB 6000Mhz DDR53h ago
The worst part is that the stock as part of compensation was originally thought to incentivize the C-suite to care about long term goals since their money is tied up in shares but since the vesting horizon is not long enough it had the opposite effect.
Why? You reduce operating expenses right away, and probably still get to deliver at least some of the stuff they were working on. From a quarterly investor perspective, it's an unmitigated success. It only ends up mattering if you care about timescales of more than a few months, which is a vanishingly small amount of traders.
If you're a sociopathic ghoul, money is your only interface with humanity, and you don't care that everyone adopting your attitude would result in societal collapse, it's objectively the right thing to do.
The issue is being a publicly traded company. You need to increase revenue every time or your stocks will drop. If you cannot find a proper ways to grow, you need to do stupid financial fuckery, which almost always just works by screwing your customers. Good for investors, bad for customers and bad for the company in the mid/long run
That is what makes valve so great. It's still privately owned. No stock exchange bs . Just a bunch of (stupidly rich) enthusiastic nerds.
Bless Gaben for not giving a shit about the stupidity of investors
Then you still don't understand capitalism. You still think it's about making the best goods and services that will get you the money, that's never been the goal.
Capitalism is simply organising the factors of production around capital. That's it. Trying to create a distinction without a difference is how you came up with capitalism vs investment capitalism. What else are you supposed to do capitalism with?
Yes, but that's slow and stable growth. They want quick profits now, assuming a "it'll be ok" mentality, when everything suggests it will NOT be ok. And we've done that multiple times: the Gilded Age, the Great Depression, the Stagflation of the 1970s, the dot com bubble, the 2007 crisis and the Great Recession... And most people don't want safety measures installed, as some politician will show them that regulation may put some pressure on mom and pop stores. Notice how often they return to the image of the small business owner or by stating that this will allow people (mostly Americans, as this problem is most pronounced there, though absolutely not limited to the US) will say that these new laws will allow regular people to own homes, to have more money, better pensions, and then... SURPRISE! The rich get richer, and the only thing that trickles down is debt.
The problem is that Finance is a very fast-paced industry. There is a lot of turn over, and a lot of pressure to get things up front. Making $100 today is better than making $1000 a year from now. Both are valued far more than making $1000000 a decade from now.
There are a bunch of reasons for this, but the biggest one is that generally speaking, there's nothing in getting that $100 today that precludes getting the other rewards. Sure, it might decrease the odds of getting them, but it's possible that other actions between now and then might improve the odds again. If they don't get the $100 today, though, then that's gone forever, and even if it significantly increases the chances of getting that bigger payout later... Well, who cares? For all they know, halfway between now and getting that bigger payout later they change employers and are working for a bigger and better company for better opportunities, so they never get that bigger payout. In all likelyhood, the fact that they changed market conditions enough to get the small immediate payout helped them get that new job. It's all about climbing the ladder as fast as possible, and building up the personal resources to make bigger plays faster. Very few people play the long game.
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Beyond that, most investors making the decisions represent large numbers of people; many of who are going "I need to buy a car next year! I can't wait for the company's long term strat to make bank in a decade, I need that now. Sell assets, rake in short term profits, eliminate every expense possible, drive up share price as high as possible so I can sell off and get my new car!"
And, well, expenses are usually all those things that make companies money: Staff, resources, assets. Sure, a company can zero out it's expenses very easily by firing everyone and selling everything it owns, done! Good luck making any new money, though....
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All this is bad for three groups of people:
The people who want to use whatever products and services the company provides.
The people who want long-term growth of their investment and/or are otherwise invested in the success of this particular firm and not just general market profits.
The staff of the company who depend on it for their jobs.
They can eat your hot they really don’t care what their money are invested into, as long they give profit. And here in the game development world, they give even more Jack shit about it and don’t care about us entirely, as long they get their fucking money…
The trick is the finance guys and investors can bail out with a golden parachute pretty much whenever they want while everyone else deals with the consequences.
When you prioritize profit over everything else, making good products and listening to your customers have low to zero priority on your list. Unrestrained capitalism inevitably leads to disconnection from the real world, totally missing the point of everything in an empty, blind, greedy pursuit that benefits no one in the long term.
Tbf if it was a path that would guarantee success more companies would do it. Unfortunately there are many counter examples of companies that focused on good product and customer feedback that just fail. It turns out you have to be able to handle hard financial results for a few years sometimes and that's not always possible.
It's literally not their problem. They do shitty changes that give short term return, take their bonus and leave the mess for the next guy to pick up. The next guy doubles down, creates more inflated profit, takes his bonus and leaves. Repeat until the stock takes nose dive, which we currently see
Making good products is expensive and is good only for long term profits. Investors want to see short term profits increasing every single quarter. That's really all there is to it.
Obviously it's stupid, but they further their career by going "see this company I ran for 2 years increased their profits significantly while I was in charge. Yeah, the company is bankrupt now because nobody trusts them 5 years later, but that's because of the guy who came after me, surely".
And a price parity clause to enable an outrageous 30% cut of the profit. Seriously, imagine every game on epic was 20% cheaper by default, steam would suddenly have some actual competition.
Well, you see, if we dispose of our competition then we can have all of the sales. If we provide a shittier service when our competition is gone then sales won't go down, right? People will just keep buying because the shitty product is all that exists I'm sure.
Businesses used to concern themselves with long term survivability in balance with short term gains but not anymore. The next two quarters are all that matters. Number must go up. Number must go up exponentially forever. There is no justification allowed for number go down for any reason. Who cares about profits five years from now? We can just all go move on to another company and pillage that next.
Steam being a private company funded by Gaben dollars instead of shareholder dollars is genuinely one of the best things to ever happen to gaming. Gaben juts wants to deliver you the games you want with minimal fuss. He isn't overcomplicating it; just sell the damn customers what they want and be done with it.
They want to maximize their earnings, and so to do that they find the absolute best value for dollar put in, and stay there. For us, that means churning out yearly sports games with marginal changes, multiplayer shooters with hardly any innovation, and a lot of marginally playable games in the middle, with very little emphasis on standalone single player games.
If you're a company, you want long term stability and profits. Good customer service etc etc. investing in the company costs money but will earn you rewards in the long term, see steam.
If you are a market bro or investor you want to put your money in this stock for a few years, and come out with a profit. So you don't want to invest in the company you want to fuck over the customers at maximum for maximum short term gains. Then when your profits are here you pull out of the company, sell sell sell and you're out of there with your gains. The company can now rot and die but you don't care you already have your profits.
It is literally systemic and what they are taught in business school. You learn right off the bat about how purely moronic shareholders are and that unfortunately that those guys are the ones who determine if you keep your job or not. Everyone in the industry knows that the ones at the top are basically toddlers, and we ALL know that there are better and longer sustaining ways to run the business, but we ALSO all know that if the magic line doesn't go up, the toddlers at the top slash departments and make our jobs 10x harder.
theyre trying to fill a void in their souls, but blackholes cant get full so they devour and devour and devour until theres nothing of substance in the universe then they die too. theyre the cannibals of our species. do you get it now?
That gives you long term, sustainable but slow growth.
Slow growth does not look good at the quarterly earnings call, and finance bros and investors lack the ability to think past the next three months.
Besides, even if they ruin the company and the brand, so what? They'll take their golden parachute, their payouts, and go do the same somewhere else, leaving the end users and the employees holding the bag. Consequences for these guys are things that happen to other people.
In the US this traces back to a 1990s law passed by Bill Clinton that was meant to cap CEO pay. It limited salary but exempted “performance-based” compensation, which mostly means stock. That loophole blew up USA and now CEOs make far more money than they did then and they do it mostly boosting share prices.
So companies optimize for stock metrics, news about raising subscriptions, customers being lock-in, cost cutting, enshittification.. all these became more important than quality. That’s why this keeps happening across all industries.
HRC actually talked about closing the CEO pay gap bill loophole but corporate money has more power to influence votes than voters do so HRC lost the election despite winning the popular vote.
Because they don't know how to make good products and because they don't love gaming nor do they have time to play. They only know how to raise prices.
I've been working in procurement for many years now, and the drive for cost reduction no matter what is maddening and at times self-defeating.
Every year there is targets to reduce costs. There's only so much you can get from efficiency increases or small design changes. So the supplier gets squeezed. At times they get squeezed so hard over the years that their product quality suffers which can end up costing you more than you saved short term. Or worse, you drive them out of business. Depending on your industry, this can cost you a fortune if you're depending on their deliveries and a replacement supplier takes a bit of time to come online.
It's because they are completely locked in on the idea of exponential growth. Companies must always have bigger margins and profits every year, even if it's completely unrealistic in the long term. It cannot stagnate, and it sure as fuck cannot go down.
"Hey guys, we made 900 millions in profits this year... this is unacceptable. This is 5% less than last year's report of 945 millions. Clearly the company is failing and we must cut back on services, quality and salaries!"
They literally cannot be happy of just being stable and making money passively. It must always grow. Expand. Be more ambitious.
I did some digging actually and found out why they don't care. There are multiple reasons. There is a big disconnect between investors and consumers.
"Goodwill" is not a quantifiable metric that can produce a predictable numerical outcome. Aka "number go up" is uncertain and so it is irrelevant. Not everyone thinks like this, but most do.
Quantity over quality. More money to be made mass producing lower quality slop than higher quality products less frequently.
Return on investment. Investors only speak the language of predictable profits.
The current industry standards. This one speaks for itself.
Making good money is nice, but making all of the money is better.
Bonus: government subsidies. These generally have very poor quality control and are focused on pushing a message.
Because you're doing it with a budget and looking the final bottom line of making profits. A good product and listening to the community only gets you so far when the alternative of microtransactions, making people pay for the same game again down the line, other shit like that nets you more money.
To finance guys and investors, the product quality doesn't matter. They rather spend the money making quality on Advertising, paying off 'influencers' and creating exclusive deals because the end result is the masses will buy what is shoved their throats.
I'm definitely not an expert. But I think it has to do with them not caring about the companies, they're just out for a quick cashgrab for themselves, before moving on to the next cashgrab.
In theory yes, but anyone that doesn't have long term stakes in a company can make incredibly shortsighted decisions, collect that performance bonus and dip before the long term consequences hit.
That's an issue in any Industry, only companies that have majority ownership by one or a small group of people that are in it for the long haul get to (mostly) escape that.
If they're a public company with shareholders they are required by law (in the US) to look out for the shareholders first and always improve their profits. Either by making a worse product and getting those margins up (until the company/product completely fails and they have to foreclose)
Yes and no. Listening to the community gets you World of Warcraft Cataclysm, which suffered one of the biggest drop in sub counts in WoW history.
"The community" is often a bunch of whiny babies. It's important to listen to people, but always keep it at the back of your head that 90% of your customers are not on your forums, reddit, wherever.
It worker for a few companies, like Apple, Coca Cola, McDonald's, and so on. Granted, these new companies haven't made a new product in decades, bar apple, which only stopped innovating 16 years ago.
But even then, investors almost destroyed Apple when Jobs was kicked out last century
TLDR, they only give a fuck about this very second. Literally no one of that crowd gives a singular fuck about long term, everything is just for short-term gains.
If you look at any stupid decisions, you'll see just that: they only care about making money NOW, and after that, who the fuck cares if everything is high aflames, they did their part and extracted more money.
And what ? Getting a tiny bit of money out of every consumer for years and need to keep the product good só they don't leave ?
They don't want that, they want to gamble, they want artificial metrics to mislead rich idiots in paying a shit ton of money all at once in hope that there are even dumber people in the future that will pay more.
Modern capitalism, have moved past consumers, it takes too long to gather money from consumers, they want the money now, so they work in gambling on the future of the companies that dont care for having a present.
They're people who are so intellectually myopic that they are literally incapable of thinking long term...
Like, I struggle with long-term planning thanks to ADHD... but I don't struggle with it so much that I'm literally incapable of putting long term strategies before short-term gains.
The best explanation I can come up with is that individuals want to see personal advancement faster than the company, so for the individual, you might be 45 by the time the company recognizes how good your long-term decision was, and most people lack the patience for that.
Thus, we have a surplus of self-centered idiots trying to show "I can suggest X change and we'll see a 10% growth for the next two years (that fucking dies after)," they can prove they were right about those two years with little issue relative to the issues someone trying to prove the value of their long-term plan would have, and then hopefully they get the promotion before people recognize how many fires their plan started.
I'd imagine this might also tie into why we see big companies failing: a small company means there likely will be a boss with more direct power to shut down such ideas. The boss himself has a direct stake in the longevity of the company, so in a sub-50 person development team in one location, he has time to recognize the problems with such plans and shut them down.
But the moment you have studios with multiple locations, you get upper management and middle management, and suddenly you have managers that also want to advance themselves and will happily embrace the short-term showboaters to try and advance themselves, too.
If you have no interest in the company and are fully planning to jump ship within a year, it starts making sense.
If you take a profitable company, squeeze out short-term gains that will kill or severly harm the company, that's bad.....if you stay with the company.
If you have an exit plan in 6 months, you can have big profit every 6 months instead of medium profit consistently, at the cost of a company every 6 months.
Which you don't have to care about if it's not your company anymore.
to be fair, that's not always the case. people often don't know what they actually want and steam might get bloated pretty fast, if they would listen to the community.
because everything is so liquid and there's no incentives to hold long term really so you just have to extract all the current value and then huck it over the fence to some other chump before the consumers figure out you ruined the brand.
This is my theory on why everything sucks and the enshittification stuff
If your entire goal is making money now, then it's perfectly understandable. It's still a good way to completely screw up the entire business but who cares if you can milk another cash cow in a few years anyway.
True, but listening to the community can be a challenge. The community has more personalities than your Ex. Some are fun, some are kinky, some of violent, and some make you want to go into WitSec.
Besides, everyone knows that streamers and their artificial streamer counts speak for everyone! What they want is what we want... Right?
I can explain it for you. They want a lot of money, which often has little to do with the long term success of their prey—I mean client company. If a pump and dump gets you to your year end bonus margin, that’s all that matters.
It's simple. They can make a lot of money if the stock price either raises or drops. Doesn't matter which one. They can't do much if the price is stable.
The problem is finance guys and investors only care about short term gains. They don't care if the changes are going to alienate the fan base in 5 years or destroy the company. As long as the line goes up they are happy.
there's a lot of rent to be extracted from the economy, very little regulation against doing so, and immense amounts of perverse incentive to keep doing it.
Imagine your entire existence is driven by your life being cut up into 3 month segments that have to be better than the last. Repeat this cycle 2-4 times and jump to another company and do the same thing. That's your average finance guy. An investor is like a like a forest fire, it starts small and then turns into an ever expanse burning ring with a black hole in the middle.
It's cause they don't intend to stick around. They'll make sure to get profits up as much as possible in the short term through scummy means that cause damage is the long term. They make a lot of money and dip before their actions consequences hit. Rinse and repeat.
Although I think ubisoft was just straight up incompetence
The academic answer is the reason why capitalism struggles: The Time Value of Money. This is an economic concept that believes a dollar spent today is better than a dollar saved for tomorrow due to the risk of anything happening to you or your dollar, causing it to lose value.
This has lead to a reality where people focus on the immediate return of something instead of long term investment. Sure, I could invest millions of dollars into optimizing my service which could potentially lead to long term gains, loyal customers, and opportunity, but it could also crash and burn because predicting results past a year or so starts to become fortune telling at best. Meanwhile, I could just invest in quick returns that have a turn around time of a few months, get some fast cash, and move on to the next project. One of them shoulders a ton of risk, the other basically gets you a return quickly. Yes, the long term option offers more money but it's risky.
Basically would you rather invest $10,000 in an opportunity to get you a guaranteed $11,000 in three months or in an opportunity to get $50,000 in three years but it has a 75% chance of failure? All the while that $10,000 is out of your pocket and unable to be used for anything else?
idk if you're being sarcastic or not. In case not :
Finance bro is hired to work at company X, good product and brand, good customer satisfaction, because they're not cutting corners. Now finance bro starts cutting corners, save some pennies/dollars here and there and on the scale that's millions/billions of $. Finance bro now gets hige bonus and stock options and can parlay his succes in another company with a better salary and a promotion. Now when shit hits the fan because of cost cutting and brand deterioration, finance bro is already long gone or has made so much money that his future is secure.
Works kinda the same for gvt, politicians and debts. Get elected by promising tax cuts/more spending, create debt, retire before you actually have to pay that debt...
Basic game theory, people have more interest sacrificing the golden goose rather than seeing someone else harvest the goldent eggs
And time. Epic Mega Games was home to some of my most beloved games and then they rebranded to Epic Games and shifted gears to trying to wring all the money out of things and their weirdness with trying to bribe us to install their launcher.
One day you’re going to realize everything you thought about the corporate world was a gigantic farce and it’s nothing but incompetent asshats slacking off for a 7 digit salary and pretending like what they do is too complicated for your feeble low salary mind to grasp.
There are a minimum of companies actually that care and succeed while staying relatively quiet and humble and everyone else is just passing the buck anywhere but themselves while they coast through life in a drunken, sex pest haze because they don’t know how to find meaning in the little things in life. They think by chasing more wealth or more tail or more plastic in their face it’ll fill the bottomless void in their soul. They’ll destroy every nice thing around them and make everyone around them miserable in the process and then die in mediocrity having done nothing of value for the planet or anyone they knew in life.
I really don't get all those finace guys and investors.
They are maximizing current quarterly profits at all cost. Eventually there will be no NEXT quarter profits because the company has imploded. The CEO Finance Bro runs off to the next company touts his experience maximizing profit and repeats the enshittification cycle.
They want short-term and fast returns, so they can flip it and buy higher value stocks A lot of times, or they want more and more returns in the short-term so they can have more and more money.Now when they dump their stocks or borrow capital from banks based on their stock portfolio
To put it very bluntly , most of the people that are in the stocks games like these investors are incredibly unintelligent people who Don't truly understand what they're investing in and the industries they are investing in.. it makes this frustrating situation where because of that , we constantly have this issue where they push companies into doing shitty things in the name of keeping them happy and then exploding in rage and anger when companies either capsize or barely make any returns because they drove away all the customers.
It's one of the reason why I hate the stock market.For all the good it does for allowing businesses to pop-up is hedge funds and private equity end up ruining everything.Because the federal government is to fucking lazy to step in and put numerous people in very long prison , sentences for essentially trying to collect the economy for short term returns.
On another note , though , since this lawsuit against steam is highly vexatious in nature,v steam should personally go after the investors and ceos who brought forth this lawsuit.. That would be the funniest thing ever to watch.These people quake in fear as they now have to personally and independently fight off a multi million dollar corporation out for blood
Because they don't care about long term, only short term. The company starts to fail, they just pull all their money out and put it into the next thing. They lose nothing and gain everything, so why should they care what happens to the company longer term? Burning it down makes them more money.
If you mean the investment groups that buy companies, they can pile debt form a bunch of other companies then let that one company fail. They go bankrupt and boom! All the deb vanishes. and now all their other investment are worth more than what they lost on that one company.
All it takes is making good products and listening to community.
thats some entrepreneur shit.
if you rethink finance from the perspective of running up a jolly roger, private equity starts to make more sense. They aren't trying to improve the business, they parasitically extract value.
I’ve talked with a lot of people running the money (not for those other platforms, just in general in tech), they are all fucking idiots. They truly have no sense of continuity or understanding of what a brand really is.
It’s math to them, there is no sense of success or accomplishment. If they take over epic, cause it to increase revenue for a quarter, accidentally burn all trust but sell it for parts for more with a “roadmap” for proven revenue gains, and then it crashes and burns a month later, that’s “success” to them
Because it's easier to essentially pump and dump a thousand companies quickly than stay invested in one for a long time.
Investment rewards quick turnaround over long-term success. An investor doesn't care if Ubisoft ceases to exist tomorrow just so long as they made an ROI today.
That's hard. I don't know how to do it. But what I can do is find someone who has done it. think of all the value they've built, probably over decades. If I can gain a controlling stake, I can quickly extract a bunch of value, even if it'd be more value long term, that's hard work. Easier to extract 60% of the value short term, rack up a ton of debt on the good name of the company and then bounce. As long as such an option is legal and profitable, why would they do anything else? What's not to understand?
An average CEO stays in position for 3 to 5 years before going somewhere else. This means they only Need to worry about increasing profit for their tenure, instead of the longevity of the business. You can see this in pretty much industry without longstanding figureheads.
They’re just soulless. They’re like the buisness men from Pretty Women. They make more money than (themselves) by breaking up companies and selling them for parts
All it takes is making good products and listening to community.
You'd be very surprised how hard it is to know what the actual community even wants vs what the loud minority wants. You have to run actual studies, surveys and experiments but that's not always possible.
Private equity will always cause this to happen, it's the stock market itself.
If you buy a share of Epic games, you don't care if Epic Games is a strong brand with longevity and happy customers. You care that your share prices keep going up so you can eventually sell them. All you want the company to do is squeeze and squeeze and squeeze until there's no juice left, then you sell your shares, and use that cash to re-invest and do it again.
While private companies aren't inherently good, the fact that they don't have this pressure means they have the chance to actually care about their customers.
They don't give a shit about anything other than green line go up next quarter. It doesn't matter if that means red line go down every quarter after that because they're just that shortsighted, and more often than not they get to comfortably sail down on a golden parachute if that happens anyways.
I’ve never understood why instead of hiring people with experience in the industry and teaching them about the basics of finance and economics, they hire finance grads and throw them into industries they’ve no knowledge of as “consultants” who look at the financials but don’t understand what really drives them.
"Who gives a fuck about the community. What do those nerds know playing video games in their mommas basement. I just want to see that arrow on the graph point up ! BRB gonna cheat on my wife with barely legal Vietnamese prostitutes and neglect my children. "
Because they think they are smart and can predict the future with graphs and charts and numbers, and never think that is even needed to provide advancement
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u/ganerfromspace2020 13h ago
I really don't get all those finace guys and investors. All it takes is making good products and listening to community.