You know who will give you money? Customers if you stop treating them like piñatas.
Valve is an excellent example of a company that is privately owned, so they don’t have to satisfy shareholders with constant growth for growth’s sake. And yet they’re still growing and making a profit, because they make a good product.
Phil and Xbox don’t have that luxury because their masters sold out decades ago.
Yeah but they give you so little money compared to investors and shareholders. 😅
I think the real problem is businesses have to grow. If most big companies weren’t publicly traded then just being profitable would be enough.
Imagine making enough money to pay you and everyone else in your company a great wage one year, but it being bad because it wasn’t more profit than last year.
I’ve seen companies phrase 8% growth as a negative because they missed their 10% growth target that they just pulled out of their own ass.
Infinite growth in an obviously finite world is such a moronic concept, yet the driving force of capitalism
I actually can’t believe this is coming from a high level employee at a corporation.
Like we all know this is true, but isn’t it big to hear one of them talking about the insanity of the system.
It’s PR. Anti-capitalist sentiments score well in focus groups.
lol the difference of course being that Phil Spencer is not living on the income of a standup comedian.
Wouldn’t these sentiments lead to expectations and then actual changes in policies?
As long as the policy changes lead to even more profits, then sure.
If nothing else, it keeps an anticapitalist narrative in the public discourse
A controlled anticapitalist discourse. This is no different than that Pepsi ad with the “protesters” sharing a Pepsi with the police.
Time will tell. I mean, he’s not wrong. I think it’s pretty clear that studios have to make profitable games at the cost of interesting games. But it’s not like msft or anyone else is going to change their behavior. They have a fiduciary duty to their shareholders to profit as much as possible.
I like it. I prefer the honesty.
Nobody forced this guy to be a soulless capitalist. He chose his career path. Oh woe is you, Phil. Must be so hard for you. /s
He’s speaking for the rest of the industry that also makes product that tangentally pays his bills. Not all assholes have to be brazen 24/7.
I can see why that would be a bummer. In my mind, the perfect video game-ceo position would be for a company that makes enough profit to pay its employees well and self sustains the business to keep making more games. Having to constantly report a higher user base and profitability growth year after year on a global scale would be a total drag.
Steam is a prime example of this. Not privately run it would have been bloated to extinction years ago.
Shareholders are leechers to quality. Dividends are not enough, the underlying asset must grow no matter what.
When Gabe croaks it Steam is fucked. It will go public.
You dont think Gabe has surrounded himself with like-minded people?
He will pass it off to someone else and Valve will carry on as it has.
Yeah, Gabe’s son is entirely focused on his own business, not related to gaming at all. Once Gabe is gone, his son will probably just sell it for an acceptable price and Steam will go public fairly soon after.
Do you have any idea at all how sus your username is?
Mine?
Yes, yours, bullshitter with two Nazi dogwhistles in your name and a new account.
Juice is a nickname I go by and I was born in 1988. Also yes, this is a new account, I started looking for a Reddit alternative when they started public trading last week. Where are the nazi symbols? I’m Mexican and Native American.
So just don’t take your video game company public.
One thing Ayn Rand’s characters were definitely too selfish to do was allow a committee to take over their work.
So Valve if Valve still made games?
That’s the thing, Valve is in this position because they have the Steam cash cow. Other video games company can’t do the same.
I just want a real Half-Life squeal. Not a vr tech demo.
Alyx was incredible though! Way more than a tech demo (though I get the argument that it was a test to see if folks would pick up a VR Half-life 3). I played it on a cheap, used WMR headset and an old PC that could barely keep up, and it still stays in my top five videogaming experiences.
It’s a great example to bring up though, because I’d bet it wouldn’t have been made if the studio was only chasing money instead of trying to innovate.
It was absolutely a tech demo. All Valve games were tech demos of one sort or another. The problem with that model is, if Valve doesn’t have some new tech to show off, there’s no Half-Life sequel. I actually predicted the we would only get another Half-Life game when Valve finally decided to get into VR about two years before they did. What I didn’t predict was that it would be VR Only or that it would be a prequel that reconned the timeline.
Valve has a fuck around with money that they could just let the devs make games on their own schedule, but instead Marc Laidlaw left the company and the fans have had to pick up the story lines and world. Honestly, Entropy Zero is a better game then Half-Life 2. Really take a moment to think about the weapons and combat in HL2. The maps weren’t designed with the enemy AI in mind, so many encounters just have you and them shooting at each other in empty rooms and hallways. So much focus was on the Gravity Gun, so all the other weapons save the Crossbow and Rocket Launcher were boring. Hell, why did they get rid of the mode switch on the Rocket Launcher? You have to take fire to your face if you want to hit anything with it.
Considering that Entropy Zero came out about 13 years after Half Life 2, I would hope it was better. It doesn’t really seem fair to compare the two. They were developed in different times, with different tech, and different games to draw inspiration from. That’s not to mention that Entropy Zero is a mod built on top of Half Life 2, and requires HL2s code to even run in the first place.
Entropy Zero uses the same engine as HL2, which is why I used it as an example. I think HL1 is a better game then HL2 for the same reasons EZ is better then HL2. Better weapons and better enemy engagements. Whenever I do a franchise replay, the HL2 stuff is always a drag and I end up skipping the HL2 stuff eventually. Seriously, episode 2 has terrible driving in it. Other games had that figured out by then.
MS still turned over $40 billion in profit last year. They just need to turn over more apparently this year. Fucking capitalism.
I thought companies made money by selling a product to customers? Hmm, seems like there is some kind of contradiction here, perhaps Phil should look into that.
Investors don’t care about that anymore. Line must go up more and right now. If not, they will replace you with someone who promises to do that.
The best ways to raise stock prices include downsizing, jacking up prices, and cutting product quality to save cost. None of these are even remotely beneficial to the customers.
It’s like trying to win a rally by removing the brakes from the rally car.
You make money by both selling more and spending less.
Think about it, you can have none money left over at the end of the month by working extra hours at your job or by spending less money on something - but what if you can’t work extra hours because there’s none available? And what if you need that extra cash at the end of the month? The only thing you can do is spend less.
Phil is kind of saying the same thing you’re saying here, but it’s not easy to just “sell more”, not when everyone else is struggling to have that extra cash to spend.
The games industry right now, as a whole, isn’t growing. That means companies are selling less. Phil end everyone else would love to sell more, by all means if you’ve got some solid ideas on how to do that then every games industry veteran out there will happily listen to you, but the sad and shitty reality is that sales are down and when you’re a business, if you can’t increase sales you’ve got to cut costs.
And that means job losses. It fucking sucks and we can have debates all day long about the merits of capitalism and all that, but that’s the reality of today. That’s the game. Phil is being honest and up front here, it’s a shitty game but he’s playing it and if he wasn’t playing it, someone else would.
No. Modern capitalism is about increasing value for shareholders. Customers, quality, morality, etc. aren’t relevant.
Profit, selling games, and maximizing value for shareholders are all fully correlated, to the point of being the same thing at different stages of the process.
Modern capitalism moves away from all three by focusing instead on current-quarter profit.
It’s not a contradiction at all. Yes CEOs are the main beneficiary of the system but they’re still accountable to shareholders who run on pure capitalism. There’s plenty of examples of CEOs trying to do the right thing only to get sued by the shareholders then kicked out of their jobs. Nothing about corporations inherently needs to be done in a capitalist way, except the fact that publicly traded companies are legally required by law to run as capitalistically as possible, and if you don’t accept Venture Capital or go public, good luck getting anywhere in this system.
Hell, basically the entire premise of syndicalism is to put workers in control of the workplace and let things naturally evolve from there. Once you remove the core pillar holding capitalism up, everything will fall down one by one like dominos. If you want to see a fraction of how that works just look at places with high unionization compared to ones without and it’s like a completely different world.
The perception of profit is a more powerful force than actual profit.
Markets select for profit by simply trimming away the things that don’t make profit.
Boards of directors select for the perception of profit by firing CEOs who don’t provide them with that perception.
These systems are both operating. The companies that don’t make a profit will still die. It’s just that under this system, a company that’s on track to making profit can be redirected by a Board onto a path where they aren’t, because of that second mechanism.
You can grow without being hostile and negative. Start your own studios, make innovative games, compete with quality not acquisitions.
the best and the only answer. git gud. 💪
Not everybody is suited to management.
Yes, but can you roll a platform of the distribution, breadth, depth and persistence over good and bad cycles of the scale of Xbox or PlayStation while being a private company? A few have tried.
No, but do you have to? You can still be a profitable company without aiming for world domination.
No, there are plenty of independent private game developers (Stardew Valley, Baldur’s gate etc come to mind) I was just taking Phil Spencer’s perspective, which I imagine is a platform level one.
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Phil Spencer, you have the luxury to quit if you don’t like the things you’re being forced to do for money.
Or, you could use your influence to try and push things in a different direction.
But Phil Spencer, you will do neither. You’ll shut up and keep dribbling.
Seriously. Everyone gets the luxury of not having to run a profitable growing business. You didn’t “have” to run that business at all.
And I get that the business maybe “has” to be run that way, because of the way it exists in the economic system it exists in, but I’m definitely taking issue with the language he’s employed here. He’s not a prisoner being forced to run things this way.
I dunno, maybe stop going public and just sell a decent game?
you get a lot of publicly traded companies that are in the industry that have to show their investors growth—because why else does somebody own a share of someone’s stock if it’s not going to grow?
I thought the way it was supposed to work was, a company starts out investing in its growth and during this period shareholders get gains from the price of the stock going up, and then when it has maxed out just switch to shoveling the profits into dividends instead? If the industry has stopped growing, I don’t see why there isn’t a path to acknowledging that to investors, what am I missing?
Growth is more valuable than dividends, and there’s always more room for growth in the eyes of investors.
Growth is more valuable than dividends
Shouldn’t that depend on the dollar amounts? Why would $X of dividends be worse than $X of stock growth? And if growth just isn’t in the cards anymore, it would be in reality a worse bet as the companies pour resources into a black hole of false hope and self sabotage seeking something that isn’t actually going to happen.
You don’t pay tax on growth, you do on dividends. For large shareholders a high dividend can be a problem. Even for me, a very small time retail investor, I have to keep a balance of growth (like Apple) and dividend (I tend to use a dividend ETF so I can fairly reliably estimate my dividends) so I can avoid paying tax on the dividends.
That makes a lot of sense. Seems like the way taxes are set up is creating perverse incentives here.
Growth stocks rise more because they carry more risk than steady dividend payouts. In a perfect dividend world, dividends would match growth, but because there is inherent risk in growth stocks there is a larger upswing
There are competing schools of thought in the investment world, and Growth has solidly beaten Dividend investing. Even better, going for a market-weighted global index fund is best.
I get the feeling the part of capitalism Phil Spencer hates is the part where consumers can take their business elsewhere if they don’t like the product.
I’m glad he can see the issue but then part way through the interview he loses it, and jumps to feeding the capitalist system
Sounds like skill issue.
phil spencer explains market discipline
Comrade?
