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.
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?
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.
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.
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.
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.
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.
Wanna try some super entertaining pills, or would you prefer a syringe so you can pump entertainment straight into your veins? First round is free, don’t you want to be entertained?
Somewhere in here there’s a joke about the cocaine laced with fentanyl that I keep getting told is a massive problem that requires more police funding to deal with.
The feds can’t imprison me for making cocaine “too entertaining”!
This is a pretty complicated topic that touches video games, gambling sites, social media algorithms, and marketing in general. It also touches fundamental philosophical questions like the existence of free will.
We have lots of established law on which sort of “mind tricks” are fair play and which aren’t, but we have not advanced those laws to keep pace with the science. Currently, lying is really the only thing off limits and is covered by fraud statutes. We also have some limits on marketing to children. But one could argue that there are several “persuasion” tactics that can be just as effective as outright lies in manipulating the behavior of others. In fact, licensed therapists are ethically barred from using these tactics, yet we allow salesmen, marketers, etc to use them at will.
I don’t really have an opinion on this lawsuit, nor do I feel qualified to offer a solution. But let me give you an example of how the human mind works which underpins addiction to gambling.
Dopamine is a signaling molecule that regulates a lot of our reward responses. If I find honey in a honeycomb, dopamine gets released and now I am more likely to seek out honeycombs in the future. You can see how this is evolutionarily beneficial. Dopamine release reinforces behavior that increases survival. But let’s say that only about 1/3 of all honeycombs have honey. Now I have a lower chance at a reward, so does that mean the dopamine release is likewise diminished? No, the opposite is true. Dopamine release skyrockets. Evolutionarily this makes sense, we do not want to miss out on a reward simply because the probability is diminished, so the high dopamine release counterbalances the diminished probability such that reward seeking behavior is reinforced so long as the probability of reward is reasonable (it peaks at about 1/4). In fact, dopamine is released even when the honeycomb has no honey. You can draw a direct line between this physical phenomenon and gambling addiction. What people don’t appreciate is that this physiological response is very similar to addictive drugs in effectiveness. It can be hard to acknowledge that one of the reasons you are not a gambling addict is simply that you didn’t start gambling to begin with, not that you are somehow superior to those that are addicted.
We have lots of behavioral quirks like this that can be exploited. At what point does this manipulation cross the line? That is a hard question. For me, gacha games cross that line. But if we want to enact meaningful regulations we need to acknowledge that these mind exploits exist and confront the fact that free will may not be as free as we hope.
Dopamine is a signal substance that is present in several places in the brain, and animals, doing different things in different places. It is not as simple as an exploitable chemical that is enabling this or even involved in the behavioral studies targeted and implemented by gambling companies.
Many things in life is exploitative. The plastic in almost all your utility is designed to break so you have to buy new products. The insurers are purposefully hiding clauses to steal from actual people in distress, at the moment where they lost everything. Oil companies astroturf and lobby to keep the transportation and air quality at this unsustainable level just to make even more money when they already have most of the money in the world, enough to buy whole continents, just lying around in Panama.
Music, film, and other forms of art are the few places where the consumer is more actively engaged and sensitive to being exploited, yet it is also the space where that just doesn’t fly. The gambling area is the most interesting place to view these moral questions in. Why is it okay that their entire business model is to work around regulation as much as possible to reach those most vulnerable in society to take their money?
Games with exploitative practices are going hard out of fashion. The people that engage with those systems unhealthily is the same people that are gambling addicts.
To me it’s just very easy and obviously best to use policy involving support networks and social safety nets to protect people rather than using prohibitive regulation and hope that soulless corporations will ever grow artificial moral spines. These psychopathic global machines will never be human or act human ever
I have obviously simplified the role of dopamine in the brain to make it more digestible, but you are dead wrong about dopamine’s role in intermittent reward and the link to gambling addiction. It has a very strong influence on behavior. Like many aspects of human behavior, the effect is not an on-off switch to enable gambling addiction. We have lots of things going on in our head that are, at times, working against each other as far as behavior is concerned. It is more like an analog adjustment that “pushes” toward a specific behavior much harder than it otherwise would. And this effect is just as powerful as addictive chemicals in potency.
Dopamine levels can measure that effect, it is neither the cause or effect. It is like saying the salt in sea water is the active ingredient making fish live. Only certain fish, only one of the things required, and so on. “it” does not have influence on behaviour, “it” is a chemical used in many different parts of our brain, for instance used to keep us breathing among many other things also in animals and even plants, not affecting their behavior in any way.
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 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.
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.
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.
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.
Well, you can sue someone for anything, you just can’t win for anything. For instance, those developers could countersue because the negligence and bad parenting of those parents materially damaged the reputation of those companies.
Some of these are engineered to be addicting especially loot crates and stuff. A lot of them are just genuinely good.
They mention Minecraft, pretty sure that one was addicting since day 1 and completely unintentionally so. It’s just genuinely fun and you can spend hours in it easily. Same with Factorio.
Not exactly a new phenomenon, I’ve seen my own parents up at 4am just because they wanted to sneak a peek at the new level they reached. My mom had hand drawn and annotated the entire Zelda 1 map. For a little bit, that NES basically ran on a UPS to not lose their progress.
For some reason US parents always want to shift the blame to companies for their own failures. It’s her own damn fault she let this get out of control for 10 fucking years. Just like those that park their kids on an iPad all the time and then sues because their kid spends too much time on the iPad and cry out in the news how iPad babies are so bad. Who’s given them the damn iPad?
I think you’ve got some valid points but you’re completely ignoring how countless corporations have invested collectively probably trillions of dollars over decades into how to best reach and sink their talons into us.
Minecraft may be an “accidentally addicting” product (though I’d somewhat dispute it), but iPads sure aren’t just addictive by accident. No tablet is. They’re designed to be from the ground up, like every major social media app and then some.
Parents need to parent, but to act like any of us are on an equal footing with the Facebooks of the world is to completely misunderstand the imbalance of power here.
Concerning Minecraft, as I know the game it seems fine, playing Java on a survival server I run for friends.
However, I wonder what the experience is for the other millions of players, on Bedrock, highly popular monetized servers, etc.
What crappy casino-like techniques are used to monetize Minecraft in those contexts? I really don’t know as I’m in my own Minecraft bubble, but I’m sure there are lots of examples as it’s such a monumentally large game.
Hyper monetized minecraft servers can be reeeeeeally bad but i wouldn’t say the offline play is designed to be addicting in the way that most modern AAA games are
Fine tuning a gameplay loop so people keep playing (and maybe spending money) isn’t as far from designing something to be addicting as most people would like to think. Hence why gaming and gambling addiction dovetail so well.
I think there’s a core difference between loot boxes, which is out and out gambling, and gameplay. Both can be addictive, but they have very different consequences.
Gameplay addiction steals your time and maybe your social life, but that’s it.
Gambling addiction also steals your money. And when that’s gone, drives you to extremes trying to find more.
I know a kid that is really into multiplayer Minecraft on Xbox and he is always after his parents for more Xbox cards so he can buy different skins and texture packs. Servers like Cubecraft and The Hive must be making a lot of money.
The thing about older games and Minecraft being addictive is that it’s sort of fine, because they don’t benefit financially from it so obviously it was unintentional and just because of the entertainment.
It becomes a problem with these new games when they are subscription based or have lots of microtransactions because the more addictive the game, the more money the company makes.
For a long time I’ve argued that there needs to be stronger language differences between physiological addiction and psychological addiction, especially in non-academic discourse. Academic papers usually define their terms pretty well, and often use terms like “habit forming” or “dependency” instead of addiction.
A lot of work has been done to remove the stigma of addiction to shift the blame from the individual to the product, and I have no objections at all to that for physiological addiction. Nicotine, alcohol, opioids, etc.
The problem is that zealots have co-opted that model to try to ban anything they don’t want other people to be able to enjoy. Comic books, television, videogames, marijuana, pornography- all of these have had the word “addiction” attached in news media without solid scientific evidence of physiological addiction. At the same time, you can find case studies of individuals with mental health disorders who get addicted to literally anything… I’m not saying there are not individuals who don’t have problems with these things, but a lot of the effort into stigmatizing and restricting these seems to have ulterior motives. It’s parents who don’t want to teach their children about responsibility and discipline. It’s religious zealots trying to push their worldviews on others. It’s large corporations trying to gain market share by attacking competing industries. In some cases like “sex addiction” it’s used to try to excuse or justify criminal behavior and portray abusers as victims. It’s notable that efforts usually go to just banning and shaming these things rather than helping the alleged “victims”. At the same time, efforts at harm reduction for physiological addiction seems to be constantly undermined.
With all of that being said, there is a separate issue that applies to this case- consumer protection. History has clearly demonstrated that without regulation and enforcement, corporations will engage in all manner of activity to screw over every stakeholder (consumers, vendors, employees, lenders, etc) in order to enrich ownership.
Looking at videogames in particular, there are definitely marketing practices and pricing structures that need to be banned. I just hate this idea that “videogames = bad” when the real issue is corporate greed, and a lot of these issues apply to other industries too.
In counseling, we call those process addictions. Internet gaming, sexual addictions, gambling, shopping etc. are all process addictions. Psychological addiction isn’t precise enough as any chemical addiction could have a strong psychological component as well, and almost always does because addictions create habits of use and habits are difficult to break. Also, for instance, we might have to ditch our drinking buddies when we have alcoholism because being around them triggers our urge to drink psychologically.
Sounds ambitious. Games are an important part of modern culture. Recognizing that is a responsible action. On the other hand, haters will have more than just Epic Games to be angry at, so it is a win for everyone.
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