The Great Video Game Swindle

The video game industry is a mess — a massive, lucrative mess. Two years ago, a PwC report projected that video games would be worth $321 billion by 2026, up from $214 billion in 2021. This year, the market is set to hit $282 billion, so it’s more or less on pace, with an average revenue per user of over $200 accounting for console, computer, and mobile gaming.

 To get a sense of the scale here, video games are worth more than the film industry. And the music industry. In fact, the video game industry is bigger than both of those industries combined. That’s staggeringly big. The immense size and economic power of the industry, which is largely nonunionized, creates regulatory gaps, leading to inevitable dysfunction and exploitation. This makes life miserable for employees and consumers alike, both in the workplace and beyond.

In a single sentence, Bloomberg reporter Jason Schreier summed up the problems plaguing the video game industry and its attendant culture. Writing on Twitter, Schreier gave his readers the benefit of the doubt and ironically posted:

As look at the video game industry’s layoffs, burnout, abusive microtransactions, prioritization of short-term profits, risk aversion, rapidly increasing budgets, endless development cycles, and studio closures, it’s important to highlight the real problem: too much diversity.

Schreier is pointing out that armchair critics and a certain subset of gamers are all too quick to blame “diversity” for everything that’s wrong with an industry plagued by structural problems that come from the top. But, of course, it’s preposterous to blame some vague notion of “diversity’” as a threat to the industry — as if different sorts of faces and bodies and histories in the programming chair and in-game are to blame for worker exploitation and corporate contempt for consumers.

You could write a book off Schreier’s tweet; indeed, he has a few times. His 2021 book Press Reset: Ruin and Recovery in the Video Game Industry looked at how the industry works, and how its workers and the studios for whom they work fit into the bigger picture. The story Schreier tells isn’t pretty, offering a look at how the sausage, or to use the nomenclature of another era, the cartridge, is made.

It’s fair to say that since 2021, the industry’s culture and working conditions and broader industry trends have not much improved.

One of the biggest problems in gaming is that workers are treated as eminently disposable fodder for production, here today and gone tomorrow once the project ships. Writing/podcasting in the Verge last week, Nilay Patel noted that tens of thousands of workers had been laid off in the last two years, including ten thousand this year alone.

Patel’s summary, couched in the context of solid sales numbers, matches Schreier’s in its incisive simplicity: “It feels like a grim time to be in the business of making games, even though the art of video game design is flourishing.”

As far as layoffs are concerned, Kody Cava, writing in Jacobin, places the blame squarely on the shoulder of industry executives. Cava argues the problem isn’t “instability” inherent to building video games, but good, old fashioned exploitation driven by a power imbalance between the suits and game designers, and further exacerbated by a growing labor pool and limited — though growing — unionization.

It’s a familiar capitalist dynamic: big profits squeezed from workers and consumers alike, with most of the cash concentrated at the top for executives, leaving crumbs for everyone else. Employees seem to serve at the pleasure of the C-suite types for whom even steady growth is never enough.

This dynamic is exacerbated by endemic crunch periods — mandated and unpaid overtime when a game is set to hit the market — and the uncertainty that plagues the industry. (Will your game get made? Will the project you’ve spent months or years on get dropped partway through development? Will it flop?) Building games that hundreds of thousands, even millions will enjoy is often an exercise in masochism. As the character Jo puts it in Apple’s Mythic Quest, a show about a video game design studio, “The workers are grist for the mill!”

On the consumer side, things are better, but they’re also complicated. Game companies look to suck every penny out of the gamer’s digital wallet. The rise of in-game microtransactions, near universally hated by gamers, is big money. The practice of getting players to pony up cash to win, advance, or to outfit their character or ride with a new skin is worth billions of dollars. Never mind that it makes gaming less fun and more expensive, it makes money.

The video game industry suffers from a power imbalance driven by the concentration of ownership among a few big players, including Microsoft — which recently bought Activision Blizzard — and Sony. Wherever you get consolidation at scale, particularly among behemoth companies, you’re bound to get the exploitation of workers and consumers at the same scale. It’s the iron law of capitalism and it produces what tech journalist and author Cory Doctorow calls “enshitification” — an abuse of the market born of dominance that produces a quality decline in product and service for everyone except the capitalists who reap the rewards of their abuse.

If the video game industry faces problems common to industries in capitalism, it stands to reason that reforming it — to the extent that’s possible within the free market — requires solutions common to other industries. The video game industry is its own beast, but it’s not unique in such a way that requires bespoke solutions. In other words, shut up and play the market-regulating hits.

There’s no single solution to gaming industry woes, but a suite of approaches could help smooth things out. That includes higher unionization rates, breaking up consolidated gaming company giants and preventing future consolidation, tackling workplace abuse through state policy and enforcement, and forcing gaming companies to adopt and enforce their own policies for eliminating toxicity among gamers who abuse their co-players.

Fixing the industry means rebalancing the distribution of power, which disproportionately rests with owners and bosses instead of workers (or gamers themselves, for that matter, who are stuck with a handful of companies to choose from). One solution is worker-owned cooperatives, a model some in the industry have already started to adopt. Worker-owned studios would help address several issues by providing new options for gamers to choose from while freeing workers from being under the thumb of the suits.

While these measures sound straightforward, they’re incredibly complex in practice. This outline provides a pathway toward a better industry, but the specifics will be crucial. It’s far easier to propose these solutions than to develop, implement, and enforce them. And yet, something has to give. The industry can’t go on like this — for the sake of both its workers and its players.

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