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Transcript

00:00Many imagine video game companies as small garage basement type companies full of geeks

00:06who live and breathe games.

00:09In reality, gaming is a business.

00:12In fact, it's a very large industry, and like other industries, it's succumbing to

00:19the same pitfalls and problems that plague IT and big business in general.

00:25Looking at gaming's problems is a good window into some of the broader problems that come

00:29company's face.

00:31Gaming in Trouble, The Bungling of IT, Part 1.

00:36Welcome to Into the Desert, Exploring the Wilderness of Ideas.

00:40Don't forget to hit that like and subscribe button, and if you want to support our channel

00:44and our mission of encouraging discussion and not division, please join us on Patreon.

00:49The link is in the description.

00:51Elgin, I know you're a big gamer and you like to talk a lot about games, and as much

00:57as I enjoy playing, I'm not a big gamer, mostly because I don't have time.

01:03But I do kind of keep up on some of the big things, and I saw that Microsoft is talking

01:08about laying off like 9,000 employees, and a lot of them are in their Xbox division.

01:13How big of a deal is this?

01:16Well, A, I'm not a big gamer.

01:20There are many gamers that are much more devoted and focused than I am, but yeah, I am a gamer,

01:27and it's a big deal.

01:28I mean, it's not just Xbox.

01:29There's a lot of companies that have had layoffs over the last several years in the gaming industry,

01:34and the gaming industry is not a small industry.

01:39According to Forbes, if you were to take the entire movie industry and the entire music

01:43industry, put them together, you're still not as big as the gaming industry.

01:48It is actually humongous.

01:50It's just tremendous in size.

01:52And the gaming industry is struggling, like all industries do from time to time, and like

02:00I said, it's not limited to Xbox, and in many respects, it's not too surprising, because

02:05the problems they're having are the same problems that a lot of other companies are having trying

02:11to manage this new thing called IT, because IT's only been around in my lifetime.

02:17I started out in the early days of IT, and I was lucky enough to finish my career.

02:24You mean back when dinosaurs roamed the planet?

02:26Not quite that far back.

02:28Close, but not quite.

02:31But yeah, it's been a long, I mean, when I went to college, we actually had to connect

02:38to a computer across town, because our college couldn't afford their own computer for running

02:45basic, and our connection speed was really fast.

02:50It was 9,600 baud, which today, you know, we're talking billions of bits per second.

02:58We were happy with 9,600.

03:01So it was quite a while back, but it's grown, and with those growth of that industry, like

03:08all industries, it has growing pains, and you're seeing that right now in gaming.

03:14Part of the problem is that there are some things unique to gaming that they put in.

03:18They were basically putting in a lot of mechanics to generate money rather than to generate gameplay.

03:27Things like loot boxes, which were basically introducing gambling into gaming.

03:32So rather than going and buy the game and go home and play it, which is what the old model

03:37was, they tried a whole bunch of new things just to get you to buy the game and then get

03:41you to give them money over and over later on.

03:45Things like loot boxes, things like pay-to-play, where, you know, you unlocked parts of the

03:51game if you paid additional money, or if you got a better weapon or better armor so you

03:58could actually defeat other players if you wanted to buy it separately.

04:02And that, you know, called pay-to-play, or they would do other factors like release games

04:08that were not quite finished yet, and then get money, and then they, you know, sell it

04:13again.

04:14They were putting on server-based games, which required you to log on to a server.

04:19You couldn't just buy the game and play it.

04:21You had to log on to a server, and then they could track what you were doing while you're

04:25playing.

04:26And if the server went down, you couldn't play.

04:30So things that benefited the company but didn't benefit the players themselves, and the players

04:35got very upset with that.

04:38Basically, their problem was they were focusing on profit, not on their customers.

04:43And a total focus on profit is always a problem.

04:47Yeah, but that's not unique to gaming.

04:49I mean, pretty much every industry, well, not every industry, but at least from a big business

04:55perspective, it seems like all they care about is the profit.

04:58And it's not really about the customer anymore.

05:00It's about that profit, that bottom line.

05:03Yeah, this is what I call a business paradox, which is because the purpose of any business

05:07is to make money.

05:09If you don't make money, you don't stay in business.

05:12But any business that focuses on profit solely will go out of business because nobody likes

05:19to go to a company whose main purpose is for them to take your money.

05:23They're trying to provide you a service.

05:25They have to compete for the customer.

05:27And it's that paradox that money is why they're there, but they get the money by focusing and

05:33servicing the customer needs.

05:34That is the business paradox that companies lose sight of it, and then they have troubles.

05:41And there's all of that.

05:42I mean, we all have an example of a company that we hate doing business with, but we have

05:46to.

05:46And we hate doing business because we feel like we're a number.

05:49We feel like we're not valued to them.

05:51Yeah, you see this with consolidations, where I remember back in the 90s, I really struggled

05:59to find a good bank.

06:00I find a bank.

06:00I like the bank.

06:01They're doing things.

06:02They made it easy for me.

06:04And then some big bank would come in and buy them out.

06:06And I didn't like the way the big bank did it.

06:09So I moved to another bank.

06:10And then they would get bought out.

06:12And I moved to another bank.

06:13Literally, I went through three or four banks trying to find banks that would actually do

06:19what I want.

06:20And I was happy with the smaller ones.

06:23But the more happy I was, the more likely they get bought out by a big one.

06:27You see this in a lot of industries where companies grow, not because they provide a

06:31better service.

06:32They grow because they're big enough to buy the companies that are successful.

06:38And I think that's anti-capitalistic because the whole purpose of capitalism, as we did

06:43in one of our videos, is capitalism is choice and competition.

06:48And the more choice, the more competition, the more capitalism.

06:52And when you have these big corporations that are buying things out, they're actually removing

06:58choice from the customer and diminishing competition.

07:01That is not capitalism.

07:03Yeah.

07:04And from a tech side, a lot of this is focused around the bank, the financial, the insurance

07:10industries.

07:11And it started with the banks.

07:12Exactly what you're talking about, this buying up the smaller banks because we can offer the

07:16better services.

07:17We have a larger footprint so we can do more for you.

07:21And then it moved on to the credit unions.

07:22And I used to actually work for a credit union administration company.

07:27And one of the biggest issues was there used to be hundreds of thousands of credit unions.

07:32And now we're down to like 5,000 and then 3,000.

07:36They keep getting smaller because these small mom and pop credit unions can't keep up with

07:42the technology.

07:42So they're being bought out by larger credit unions.

07:45So you have these monstrous credit unions.

07:47And it's not the, here's the credit union for teachers.

07:50And here's the credit union for the steel workers.

07:52It's, here's a credit union and anybody can join it.

07:55But we're now being bought out by bigger credit unions and bigger credit unions.

07:59And then fintech is the same thing.

08:02And a lot of this, this is a financial technology companies that really are basically, I'm going

08:10to offer this one little financial niche thing.

08:13Like there was this thing called safety net, which was like, you give us a little bit of

08:17money.

08:17And if you get laid off, then we'll kind of supplement your income for a while.

08:21And they kind of sort of get built up and then a larger company comes and buys them out.

08:26And there's hundreds of these and it's an entire industry of these little niche products

08:32that are just good enough to be bought out by a bigger company like people did with the

08:38dot-com, right?

08:39They would buy up all of these dot-com names just so someone would buy the name from them

08:44for a bigger profit.

08:46And now we're even seeing this in the insurance side of things.

08:51So there was an article the other day that Delta Dental is buying out dentist offices.

08:59And so they're going to be doing the, you know, patient care all the way through the insurance

09:03administration.

09:04So we're creating now larger and larger companies that are doing everything.

09:10And there's no accountability now.

09:13There's nobody saying, hey, wait, are you doing this for profit?

09:16Are you doing this for me?

09:18Do I need the root canal?

09:19Do I need, you know, this financial product?

09:23These are the problems of consolidation because bigger is not necessarily better.

09:28I mean, obviously, if you're the CEO, it's better because you get to run a bigger company.

09:32But for the customers, it's not better because by definition, the larger the company, the more

09:40distance there is between the customer and the running of the company, the top level executives

09:46or CEO.

09:46And so you get these really, really large companies, they have no idea what their customers actually

09:54want, except through maybe by buying surveys or something like that.

09:57That's not the same level of customer service, which is why I kept looking for banks because

10:03the big banks would buy out the small banks thinking they were, you know, look at these

10:08people, they're attracting all this business.

10:10But what they did is they changed the business model to the one that I had already rejected.

10:14So you see this in the gaming as well.

10:18They're consolidating a lot.

10:19They're buying out all these studios and forming one big, large conglomeration of work.

10:27But then what do they do?

10:28They start getting rid of a lot of studios.

10:30So you see, not only is Xbox laying off 9,000 people, but they're also closing a whole bunch

10:37of studios.

10:37This is the net effect of consolidation because how can you compete with yourself?

10:43So you have all these different studios, you know, how do you compete?

10:48And you don't have the, you know, they think, oh, this is capitalism action.

10:51No, it's not because capitalism is choice and competition.

10:54If you're reducing choice and reducing competition, you're not expanding capitalism.

11:00You're reducing capitalism.

11:03Gaming in Trouble, The Bungling of IT, Part 2.

11:07The reason consolidation is a problem is that it creates a barrier between upper management

11:15and the customer.

11:16And the bigger the consolidation, the more distant that barrier is, the more distant the

11:22customer is.

11:23You have also lack of understanding of IT, what's actually going on by upper management,

11:29and a lack of industry experience to some extent.

11:32These step from a lot of bad decisions, which are ultimately driven by a lack of information.

11:38To make a good decision, a CEO needs good information.

11:43But because of the consolidation, they are so far removed from the front lines of the businesses,

11:48they often don't have that information.

11:50And they end up with only focusing on costs.

11:54And costs are a problem.

11:55You can get higher profits, but if you end up cutting your customer service, that ends up

12:01as a problem.

12:01And we see this largely in the IT industry, because for decades now, there have been a

12:07drive to lower developer costs.

12:10And you see this.

12:11I was in a meeting once with a CEO of a business, and they needed a new engineer.

12:16The CEO said, we need a new engineer, but I don't want to consider U.S. developers.

12:22I only want H-1B visa people because they're a lot cheaper.

12:26Well, they're not supposed to be, but in those days, they actually were.

12:30But that causes a lot of problems.

12:33Yeah.

12:34There's a lot of noise about how the STEM industry is this growing industry, and that

12:40we need to be teaching STEM to our children.

12:44And my kids in summer school have STEM classes so that they can learn about programming and

12:49gaming and computers.

12:51And on some senses, I think that's good.

12:53It's helping them understand a little bit about computers.

12:56Cal State San Bernardino just received $85,000 in grants to help fund 35, 30-some scholarships

13:04for STEM.

13:05The whole STEM thing has always been sort of a pet peeve of mine because I have been in

13:10the industry from the 1980s forward.

13:15I've heard all the complaints and all the need for STEM, and we have to go out and get

13:20the H-1B visa because we don't produce enough STEM.

13:24Part of that is just a myth.

13:26According to the federal government, from 2012 to 2023, we created 6.6 million new STEM graduates.

13:35So people out there with STEM degrees ready to create jobs.

13:38Over the same period, we created 5.4 million new STEM jobs.

13:45So we created an excess of 1.2 million degrees in STEM, and yet we claim we need H-1B visas.

13:54The other stat I recently saw was that one-third of native-born Americans with undergraduate STEM

14:01degrees actually work in STEM.

14:03So we're producing a lot of people going through college, spending a lot of money to get STEM

14:09degrees, and then you have people in business saying, I don't want to hire Americans with

14:15STEM degrees.

14:16I want H-1B visa people.

14:18I'm one of the statistics.

14:20I got a degree in STEM.

14:22I started working, and due to many factors, I don't work in STEM anymore.

14:30IT is kind of seen as a job for young adults, and technology is constantly changing, and employers

14:41want to hire people who are up-to-date on the latest technologies, and I just got too expensive.

14:51Well, there's part of that.

14:52I've seen lots of companies come in and say they want somebody with 10 years of experience

14:58in a technology that's only been out two or three years.

15:02They just know the buzzword.

15:05They know this is the new thing that they want, and they don't consider whether someone

15:09with a proven track record of learning technology can learn a new technology.

15:14They want someone with lots of experience.

15:16So it becomes a lottery system of, you know, did you happen to land on the right technology

15:24box and get the technology that's going to be needed in three years, or did you land

15:29on a box on a technology that's going to not be prevalent in three years, which actually

15:35in any other industry, it wouldn't be a big deal.

15:37They just learn the new technology because they've shown that they can do that, but people

15:42want, they want cheap labor out the door that can do the job right away rather than develop

15:48the labor up front.

15:50Well, and CEOs love buzzwords, right?

15:54That's the one thing I've seen consistently in my career is it's all about the buzzwords,

16:00right?

16:00And, you know, cloud computing and lean technology and the list can go on and on and on, and I

16:08could be here an entire video of the buzzwords.

16:11And that focus is very highly on the IT side of things because, you know, these young developers

16:18always want to do something new and on bleeding edge stuff.

16:23And there are reasons that things are done the way they are, and they may not be pretty

16:29and they may not be perfect, but it is not clean cut.

16:35The world is not as pretty as you get into a classroom.

16:40And those of us who have gone through schooling and then gone to the real world know that most

16:44of what you do in school is enough to pass the test.

16:47Because when you get into the real world, you might take a little bit here and a little

16:52bit there.

16:52But most of what you're doing is nothing you can learn in school.

16:57You literally cannot learn what you need in school because life is too complicated.

17:04Business is too complicated.

17:05And the bigger the business, the more complicated it is.

17:09And taking something that was developed, let's say, even five years ago and upgrading it to

17:14a new version can take months, if not years.

17:20This is the sort of knowledge you get as a more seasoned developer, is you get an idea

17:28of how to judge the various technologies and the various options.

17:34And younger engineers, they're like CEOs.

17:37They like buzzwords.

17:38They want the latest, newest, biggest thing.

17:40This was a real problem around 2015, 2016, 2017, where they were coming out with new technologies

17:49so frequently that there was actually this phrase called JavaScript fatigue.

17:54And it was built on the fact that I read an article once.

17:58It was almost a parody, except everything mentioned was true, where a guy comes to an

18:03IT person and says, I want to put a table of data up on a web page.

18:06It was like, oh, yeah, it's simple.

18:07Well, to do that, you just do this.

18:09But then he started going, well, if you're going to do that, you need to have this.

18:12And then you need to have that.

18:13And it went for like two or three pages of all this stuff.

18:17And I found it humorous because, you know what?

18:18I'd actually been in that type of conversation where I asked a developer just to do something

18:24quick.

18:25And next thing you know, we had 10 or 15 new different technologies.

18:28And they spent all the time just trying to get them to play together nicely.

18:33And then suddenly a new technology would come out.

18:35And the biggest thing was, well, how do we get this new technology to play with this other

18:39group of other technologies?

18:41You know, there's a bleeding edge of technology.

18:44And it's called that for a reason, because if you're on the bleeding edge, you're getting

18:49yourself cut up.

18:50Whereas if you take back a step, you can get the job done and it works and it won't have

18:56problems as opposed to the scaffolding of various technologies that have to all play nicely.

19:05And then one of them gets updated and the whole thing breaks.

19:08Well, yeah.

19:08And there's also this idea of there's what the customer asks for.

19:14There's what the customer thinks they want or thinks they ask for.

19:19And it's what the customer actually needs.

19:22And they're not the same thing.

19:24And until you've dealt with that, until you've had to, well, you asked for this.

19:29Well, that's not what I meant.

19:31You have to learn how to interpret.

19:35And just because they want A to equal B doesn't mean A equals B.

19:40And you sometimes have to say, this is good enough.

19:43Yeah.

19:43You need someone to translate technology to the business.

19:48I mean, they are different worlds.

19:50It's one of the reasons, by the way, that Agile has been so successful and is such a great

19:55way of doing things is because Agile gets things in front of the customer because the

20:01customer, quite frankly, doesn't know what they want and they're not going to know what

20:05they want until they see it.

20:07So the sooner you can get something in front of the customer and get that feedback, the

20:12better the result will be.

20:14And Agile is built to handle that.

20:16Most things in technology are a great 80% to 90% solution.

20:21A lot of junior developers simply do not understand the trade-offs.

20:25They also don't understand a lot of what the technologies are doing.

20:30So for example, I was called back once because a piece of software I had worked on developed

20:36a security problem.

20:37It was not handling security any longer.

20:40And they called me back and I'm looking at the code and I see they had commented out a

20:46section of what I had written.

20:48Okay.

20:49I asked them, well, why was this commented out?

20:51And he said, well, the other developer didn't know what it did.

20:55So he just commented it out.

20:57What that piece of code did was turn the security on.

21:00So when he commented it out, not knowing what it did, he turned off security.

21:07That's the problem you get when you have code written by junior developers or modified or

21:14managed by junior developers that don't really understand what it's doing.

21:18There's also a problem with senior managers.

21:20They also don't understand IT and therefore they have a hard time managing the developers

21:27underneath them.

21:29Yeah.

21:30One of my jobs I was hired for, I went in first day of work and I'm meeting with my manager,

21:36getting expectations set.

21:38And she's like, really don't know what your job is.

21:42I just know we need help with technology.

21:44And so I need you to help us with technology.

21:46Like, yeah, you see that with a lot of the cost saving modes now.

21:52And one of the trends is to go through and get rid of middle management, upper management

21:58somehow always thinks they're, they're vital and necessary.

22:02And of course, the frontline workers are necessary, but that middle management part, well, we don't

22:09need middle management.

22:10What do they do anyway?

22:11And so they get rid of middle management, not realizing that that's the communication

22:17funnel up and down middle.

22:19The purpose of middle management is to take the, what the execs do and send it down and

22:25take what the employees information and send it up.

22:29Yeah.

22:30Well, and in my career, I have three times been promoted up to management during a restructure

22:37when they said, okay, we changed how we're going to work and we need these tiers and

22:41we're going to have this be nice and clean.

22:43And so I got promoted up to middle management.

22:46And then a year or two later, we're cutting costs, layoff.

22:52They want to cut you out because employees are the most expensive resource of any company.

22:58Yeah.

22:58And particularly your employees who have been around a lot.

23:02When you get rid of your upper level, quote, costly employees, you're also getting rid

23:07of your employees that have the most industry experience, the most direct experience with

23:13how things run.

23:15You see this, and this is a classic problem with gaming.

23:18They come in and they buy out the smaller studio because they like that game.

23:24That game was really successful last year or the last couple of years.

23:27They buy the studio, they take over, they begin to get rid of all the more expensive people.

23:36And some of the people that leave are the people who actually know how to make that game

23:39and know why that game was successful.

23:41They lose that expertise.

23:43They then publish the game in its new format.

23:48And for some reason, nobody likes it.

23:50And I think that is a universal problem.

23:53You know, you have people who understand why things are the way they are.

23:59One of the biggest things that I would do when I started any job is I would try to figure

24:05out the landscape, right?

24:06I want to know who are the people?

24:09What is the process?

24:11Why is the process the way it is?

24:13Why are we doing things this way?

24:15Either one, I find out that, okay, we're doing things for the wrong reason.

24:19And there's the old story of you have this daughter who's watching her mom cook a ham.

24:26She always cuts the bottom off of the ham and puts it in the oven.

24:29And she's like, Mom, why are you cutting the bottom off the ham?

24:32And she's like, I don't know.

24:33Your grandmother always did it.

24:34Why don't you go ask her?

24:34So the little girl goes to her grandmother and says, Grandma, why has mom always cut the

24:38bottom off the ham?

24:39And the grandma's like, I don't know why your mom did it.

24:42I always did it because it didn't fit in the oven otherwise.

24:44So, you know, you find out sometimes it's like, oh, we don't need to do that anymore.

24:51And you can now save something because you find out why or you find out, oh, no, if we

24:57don't do this, like your security problem, right?

24:59If we don't do this piece of code, there's no security.

25:03Okay, good.

25:04I'll remember that.

25:05I'm going to make sure we always do that.

25:07And so it's really important to know why you're doing things.

25:11So, you know, what's important and what's not.

25:15And when you have consolidation, you know, then you get these offshore people who literally

25:20are told not to go into that level of detail.

25:23I've worked with so many offshore employees and there's good and bad to all of them.

25:28But one of the consistent things I've seen is they're not allowed to ask why they're just

25:33this is what you want me to do.

25:34And I'm just going to do it like a kind of like a copy machine.

25:37You put the copy in and it puts exactly what you sent it back out.

25:43And if there's a mistake, garbage in, garbage out.

25:47And so having those focus on bringing in the young employees or bringing in the offshore

25:53people or, you know, fingers on keys, as one of my old bosses said, and everybody hated

25:58that.

25:58I'm not just a fingers on key person.

26:02It's not better.

26:04Bigger is not better.

26:05No, and, you know, in a lot of industries, you had this concept of developing your employees.

26:14You know, a master machinist and an apprentice are seen as two different employees, two different

26:21skill levels.

26:23And yet a master developer and a junior developer are seen as actually the junior developers often

26:31preferred because they're cheaper and they seem to know more.

26:34Which is why you end up with these absurd stats of we're producing more STEM degrees than we

26:41are STEM jobs.

26:43And you have one third of people with STEM degrees who are actually employed by STEM.

26:48And yet upper management of these big high tech companies are complaining that they can't

26:52find people to fill these jobs.

26:56They have to bring them in from overseas.

26:57And then they wonder why their projects are always over budget and take three times longer

27:04than they thought.

27:05Yeah.

27:05If your problem is you don't have the employees, then maybe part of what you should be doing

27:11is developing that base.

27:14You know, if you don't hire the people that come out of universities in this country, then

27:21why should the universities in this country produce the people?

27:25And again, we're offshoring jobs.

27:28Do you agree with our analysis?

27:30What did we miss?

27:32Is gaming being ruined by consolidation?

27:35Do gaming companies focus too much on profit and ignore their customers?

27:39Are these problems limited to gaming, IT, or business in general?

27:45Have you had similar experiences in your career?

27:48Are you in the two thirds of people with a STEM degree that is not working in STEM?

27:54Tell us your story.

27:56We'd love to read your comments and reply to many.

27:59And if you've made it this far in the video, please consider watching one of our other videos

28:03and supporting our channel on Patreon.

28:06Thank you again for watching Into the Desert, Exploring the Wilderness of Ideas.

Gaming in Trouble: The Bungling of IT - Part 1 & II

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