Does it seem like companies just aren’t that well run anymore? I mean, companies seem to be having massive layoffs and placing ever more work on the remaining employees. At what point will the remaining employees just collapse?
Are we just reverting to the mean after years of zero interest rate policy? Would love for folks with experience working in tech in the 90s and 00s especially to chime in.
Previously on “companies just aren’t run that well anymore”, HN considered this analysis of Boeing’s collapse following a reverse-takeover by an acquired, collapsing, competitor that ended up kicking out the quality-focused management in favor of profits: (6 years ago, 281 comments) https://news.ycombinator.com/item?id=21971040
I assume a similar analysis exists somewhere for the big names in gaming that financial engineers have similarly destroyed other formerly-great companies; ZA/UM comes to mind as one example.
Bungie, in its post-Halo standalone incarnation, was running a microtransactions empire from day one and funded itself on the debt owed by those; it was not ‘taken over’ by financial engineers, so to speak, because the call was coming from inside the house from day one. They executed on some very nice tricks to get funded but their business was operated consistently (impeccable scenic and gunplay, variable-quality story and voicing, catastrophically-bad management) throughout.
The others are all well-known acquisitions or acquirers, but I’m not seeing a clear link to my point. Certainly they’re stellar examples of ‘greed minmaxers’ but not so much of ‘profitable incompetence through financial engineer takeover’ like happened to, say, Toys R Us or Wizards of the Coast. Perhaps you could explain in more detail?
If that were true, then Bungie post-Halo would still be Bungie post-Halo, a part of Microsoft. Not Bungie post-Activision... certainly not Bungie post-Sony...
It's not all the studio head's fault in some of these situations. It was larger studios/publishers like Microsoft Studios coming in and buying them out. The consolidation of these studios is what burned them.
The point here is that mergers and acquisitions are not the underlying cause of the problem. Yes, most M&A is private equity these days, but the problem with that is private equity. Yes, as the post we’re discussing suggests, most AAA gaming is in shambles after the hAIst of the century; blaming that on mergers and acquisitions needlessly excuses the leadership of the acquiring companies from their ultimate responsibility for the shambling. Consider ustwo: they’re employee-owned, a registered B corp, and are pivoting from employees to contractors because it’s more cheaper. One of the launch workers for that game described an event in 2014 that is an much earlier, pre-AI instance of the shambling:
> I remember having a call with a business partner just before Monument Valley came out. And they couldn't get their head around it. They're like, 'Right, so it lasts two hours, it doesn't have in-app purchases, it doesn't have leaderboards, it doesn't have adverts... Well, why are you making this again?' No one could get their head around it.
That their unicorn became real is in sharp contrast to how their business leadership thought it would go, and then they launched two sequels that were no more successful than the second and third Matrix movies. We were lucky that MV escaped containment. The studio was not threatened by mergers or by AI; it was threatened by bad management, who wanted to engineer the most financial profit rather than simply shipping a good game.
Yes, Ubisoft will fuck over everyone they buy. But that’s because Ubisoft is badly managed; consider the Crystal Dynamics Tomb Raider trilogy, widely considered excellent and preceded by their acquisition. Yes, it’s easier to place the blame on AI. But that’s because bad management is often greedy and miserly, and AI fits those desires like a glove.
This is no defense of Ubisoft or AI fucking over everyone, and I sure do loathe them both, but consider my point about Bungie in these terms: They took their own reins and mismanaged themselves into the ground, with a merger halfway through their decade that did not noticeably alter how they mismanaged their business. Bungie spent ten years doing strange financial engineering with multiple funding sources (Sony was merely the last one), locking the color palette picker behind cosmetic transactions, selling season passes and DLC, launching an entire sequel that bombed in year one because it removed the addictive loot box mechanism, and going so far as to delete one entire half of their world-class game rather than just refactoring it.
That’s bad management, and they’re a poster child for the entire gaming industry as a result. The financial engineering I’m blaming for this collapse, for these shambling monsters we’ve created — well, some would call it profiteering, but fintech has finops and findev, just like any other tech industry, and they engineered this outcome, so I’m simply giving them the courtesy of name that they deserve.
I agree on all of that, and to add to it that the leaders of these studios that had good games were leaders because they made good games. Not because they were good at business management. They weren’t and they thought bringing in the big folks would provide that and it always turns out terrible for everyone involved.
Todd might be a sellout, but he still seems to act with a certain level of regard to the properties he helped bring up when the business was just some weird dudes. Whoever replaces him will likely be a microsoft bean counter with zero attachment.
The thing to realize about the SV executive class is that they have constructed a closed ecosystem around them where they only talk amongst themselves and a small number of supporting actors who say what the execs need to hear. A CEO will talk to other CEOs he will not talk to his skip reports. Alternative viewpoints or dissent are not part of this social circle, and despite their 'conterarian' self-image, there's an immense amount of social pressure to conform.
You can can see hints of this outside - for example this site used to see YC folks as regular commenters, but no more. Twitter was changed so that only views favoured by Musk show up prominently in replies. These people certainly do not encounter normal people in their day-to-day lives.
In this information environment you see extremely rapid horizontal spread of weird, stupid and esoteric ideas - one CEO does a layoff, all of them will do layoffs. One turns MAGA, they all turn MAGA, etc. One guy starts yapping about some snake oil, they all yap about snake oil. There no negative feedback loop there.
> Twitter was changed so that only views favoured by Musk show up prominently in replies.
This doesn't happen anymore, it's actually relatively good at sorting bad comments to the bottom now. The current problem is it's full of wannabe LinkedIn influencers with "Building for AI agents in business in public" in their profile using LLMs to reply to everything.
Eh. They recently changed the algorithm quite a lot, and the guy who was in charge of it (Nikita Bier) made it a lot less evil when Elon wasn't looking. But now he's gone so who knows what will happen.
I find this a correct and astute observation, and I don’t think you’re getting enough credit for it. I started noticing this SV C level groupthink a few years ago too. It’s just so _weird_ how lockstep everyone is, it’s like there isn’t a single original thought amongst today’s leaders. Just copy, mimic, converge, repeat. Same ideas, same moves (layoffs of exactly 10-20%) same org structures (flattening!) same team structures (smaller teams with AI!) same same . It’s almost creepy, and if I was more of a conspiracy theorist it would be easy to believe in shadowy leadership cabals orchestrating everything.
It didn’t used to be this way - say circa 2006-2015 you had so much more diversity in the style and ideas of leadership. Eg early Dorsey, early zuck, all these other ceos at that time trying all kinds of wild and whacky ideas of how to run their companies. I’m not sure why this convergence happened, but now everyone’s singing from the same hymn sheet, it’s anti-innovation, and I hate it.
> In this information environment you see extremely rapid horizontal spread of weird, stupid and esoteric ideas - one CEO does a layoff, all of them will do layoffs. One turns MAGA, they all turn MAGA
As for the layoffs, that one was to be expected, a correction after the insane hiring sprees during the ZIRP phase.
As for MAGA... well, Trump made it clear. Either you walk the line with him, or you get screwed.
Well, we don't see a slight trimming of workforces, we see 20-80% layoffs in most cases with good financial performance. You see breathless claims of AI doing all the work one year, tokenmaxxing, then less than a year later everybody says don't spend so much on AI, progress wasn't as far as we expected. You see this in what people say about AI as well - one year everybody will be jobless in 5 years, next year "actually jobs are gonna be ok".
My point is that its hard to ignore just how in-tune and well-coordinated all these people are, and I don't think it's a coincidence. If CEOs were responding to actual political, economic and company developments, you'd see far more diversity of opinion. Some you see their companies are growing and profitable and wouldn't jump on the layoff bandwagon. Others may ask "Don't we need rule of law? What happens when the other party gets in power?" and fight the administration in courts etc.
> Well, we don't see a slight trimming of workforces, we see 20-80% layoffs in most cases with good financial performance.
The overhire during ZIRP was insane though - in total it was a good nine years of zero interest rates, and between the first period (2008-2015) and the second period (2020-2022) interest rates weren't that high either. Companies battled each other hard even for people who just went through a few weeks worth of bootcamp, just to make sure the competition didn't have access to them, even if there was not much productive work that could be assigned.
And that group is where the layoffs really hit hard: people with basic training, relatively little investment both of the company into the workers and from the workers to the company and, most importantly, a skillset / allocation that just lends itself heavily to being replaced or at the very least heavily augmented by AI.
On top of that... "good financial performance" doesn't mean the balance sheets can't look even better. With C-level boni being tied to stock performance or "efficiency gains" KPIs, it's no surprise that many just look at their paycheck first, the long-term health of the company second.
> You see this in what people say about AI as well - one year everybody will be jobless in 5 years, next year "actually jobs are gonna be ok".
I don't have much hope left for anything in the field of "knowledge work" and for most of "creative work" either. Let's be real, the wide masses don't care they're being force fed with AI slop, as long as they have some brainrot to doomscroll in the evening. The only jobs relatively secure for now IMHO are the trades and wiping the arses of dying boomers in care homes. For the former, robots lack the required dexterity and force feedback, and for the latter, maybe the Japanese are willing to accept arse-wiping robots, but I heavily doubt this will be the case in Western countries any time soon.
> Some you see their companies are growing and profitable and wouldn't jump on the layoff bandwagon.
There are companies left that are actively growing and not making shovels for the AI gold diggers? Huh?
> Others may ask "Don't we need rule of law? What happens when the other party gets in power?" and fight the administration in courts etc.
A rare few, yes. But most have given up and went for appeasement instead after the first ones got mergers disrupted or otherwise punished.
I'm not disagreeing with you exactly - there are obviously reasons for doing all those things and on the surface they may seem sensible as well. But there are also good reasons why you'd do the exact opposite and my point is that in a group of independent thinkers you'd see greater diversity of opinions and outcomes. I was a middle manager involved in some of those layoffs (on both sides!) and saw the sausage made up close. Thing is, yes it's a shitty thing to do to someone personally, but nothing of what I saw could be justified in objective terms.
> Does it seem like companies just aren’t that well run anymore?
If you mean the games industry, it was always poorly run. I worked in games in the 90s and 00s it was a cottage industry of nerds, many of whom had success with an 8bit game in the 80s (where they did everything: a one person team), to then have to run large teams of devs/artists/designers/etc without any leadership experience and more complex hardware.
This is one of my favorite eras / subjects in tech history.
I was just recently reading about the history of the Ultima series and you’re describing Richard Garriott. As games were pressured to be bigger and prettier and use 3D graphics, suddenly the lack of managerial experience (partly) caused the later games to spin out of control and they were forced to release a series of bad titles that brought the whole franchise down.
It’s busy really interesting how fast that industry changed, and the massive scale involved compared to just 10-15 years prior, depending on where you measure from.
> As games were pressured to be bigger and prettier and use 3D graphics, suddenly the lack of managerial experience (partly) caused the later games to spin out of control
This generalizes to the industry, not just Origin.
Corporate game dev uniquely seems to attract incompetent middle and upper management with extreme egos.
I guess because the people who scramble to the top of the pile in an industry with an endless incoming supply of naive new workers tend to be those who spend most of their time networking and sharpening their knives.
If you find this stuff interesting, you can read about the failure of the first game I worked on here [1].
I replied in the comments [2]
It says 1997, but dev started in ‘95, I joined in ‘96.
I was pretty gutted at the time, I was just 21 years old and had the big dreams of working in games. It soon becomes clear that very few titles succeed. Luckily I had a few wins on the way, but the lack of professionalism really did get tiring.
Very interesting, thanks for the read. Your comment touches on what I’m talking about- specifically the massive new challenges introduced by rapidly increasing graphical abilities of computers and the demand from consumers to see that in all new titles.
Companies haven't been well run in decades, if ever, especially American ones. I've worked for about a dozen companies in my 30+ year career. None have been well run, most are out of business. I do design services now, and have worked with dozens of companies through that, and the pattern continues.
We don't have leaders, or people that can make hard decisions, or think for themselves. They all follow the same book of the day business trends. If you do think outside the box you aren't a team player and are rocking the boat.
> I've worked for about a dozen companies in my 30+ year career. None have been well run, most are out of business
I did tech consulting early in my career, so got to see a large number of companies as I was working for them. Some good, some bad.
There were a few reliable characteristics about the good ones though:
- Distilled corporate culture into learnable points, ensured everyone learned those, and then reliably used and referenced them in the context of everyday business decisions
- Centralized strategy, decentralized tactics. Execs cane up with strategic targets, then implementers were free to design their own solutions to deliver those
- Had an expectation of employee-initiated internal mobility (team switching) and used it as a management evaluation signal
- Had a strong internal process for recognizing when they promoted / hired a bad manager (i.e. they made sure a bad manager with a good team didn't look good)
I'm not sure about the last two, but Amazon nails the first two in spades. Bezos made it abundantly clear the company was about efficiency and scale... and fuck anything else (employees included).
Most follow the herd, but there are often noticeable exceptions. See e.g. how Toyota refused to jump on the electric vehicle bandwagon and stuck to hybrid engines. Or Mazda, which didn't even do hybrid.
Is that supposed to be an example of a good decision? Outside the US hybrids are quickly becoming irrelevant. The decision is looking like it will cost Toyota the crown
Worldwide outside the US BEVs are about 16% of new car sales (BEVs + PHEVs are about 25%). Hybrids are still going to be relevant worldwide for quite a while.
The peak of ICE car sales (which includes hybrids) was in 2017 and it’s been downhill since then, and it’s going to plummet from here as EV share keeps growing rapidly. Bev share is growing significantly faster than hybrid. I personally wouldn’t be betting my company on a rapidly shrinking market
It seems like Google, Microsoft, and Apple have all switched into "extract max profit" mode. They don't care about quality or even features anymore.
And it comes from the top: the CEOs are not caring anymore, so their lieutenants are not interested in doing any work either. So the companies get turned into fiefdoms without any central guiding direction.
I've worked for a few companies from 2000-2026 (2 startups, 2 medium companies), and overall, I would say they all had decent to great leadership. None of them were out to only maximize next quarter, all stressed being 100% honest with the customer, even if it meant disappointing them (i.e. we can't quite make that target, here's what we can do - this was for a consulting company), etc., and they were all trying to make the company grow AND be sustainable.
One startup didn't go too far (folded after 3 years), one grew to ~20 people, lasted for maybe 20 years total, I left after 2 years during the dot com crash.
Both of the medium companies are bigger now (I'm still working for one), and have generally positive outlook. I mean, you can't consistently be #1 in your industry when there are 2 companies with combined > 50 or 60% market share and roughly equal - some quarters, your competitor's 2-3 year plan will finish and deliver better for that quarter than your previous (now "old") product that is in the middle of a 2-3 plan, etc..
So they are out there, but it's RARELY in the "high profile" (FAANG/whatever) "move fast, break things" companies that you hear about a lot or that everyone wants to work for.
A friend said <ride sharing company> was like Game of Thrones come to life in a corporate setting, for example. Yet, some people got rich off it, I'm sure.
Look at Strange Scaffold for a game dev company built around being a sustainable business where there aren’t any single ambitious “Bet the business” releases.
I was working at a web shop in San Francisco when the Web 1.0 bubble burst. The period leading up to that was characterized by company execs buying themselves all kinds of expensive new cars and toys, and a kind of hysteria on the part of clients that their brick and mortar businesses were being left behind if they didn't spend gobs of money on websites that had all kinds of gizmos and information but were, essentially, just brochures with a contact form. The FOMO of "AI", whatever that means to individual decisionmakers, feels similar to that time. As does the grift. Every plumbing company and real estate agency back then wanted to say their business was online. Not being online was being left behind. Now they all want to say they're AI powered. Well, business owners and managers need to sound like they know what they're talking about, and brag about whatever they think they've gotten for their spending, especially when they don't have a clue whether it pencils out or not. That's why they were happier back then with a website they could say they paid $30k for than if they'd somehow gotten it done for a tenth of that.
A former professor went through startups to acquisition with 7 or so startups during this era. He said one VC kept funding them. The VC visited their new office and said this is why we love you guys everyone else we are funding drive brand new Mercedes.
I had the displeasure of working for a new crop of the same kind of people for web 2.0. There's something amazing about people who never build anything but come into the world sure that they can tell other people how to do it, and happy to take 90% of the money for making the sale. Takes a lotta chutzpah, in the original derogatory sense. What I learned from this industry is that there are more of them in the world than us, and far more of them than there are positions for them, so theirs is a vicious and dark dog-eat-dog reality where concepts like "act as if" and "fake it till you make it" are genuine currency, as opposed to stuff like idk working hard and shipping something.
I don't go back quite to the 90s, but this has been true across my entire experience working in a few big multinationals (including one in tech).
Companies will do what Wall Street wants (Wall Street likes layoffs), and at a certain level, they don't want unemployment to get too low, lest their workers gain too much leverage.
In the 1990s, the adage in game development was that you knew you were a game developer when you had sat at the same desk, had seven different positions with three different companies over 30 months, brought in all your own equipment and still hadn’t gotten paid.
So, the game development industry really hasn’t changed that much. But the way we talk about things certainly has changed.
Generation X had a lot of bad things written about us, but we could write and we could think. We were also significantly tougher than the modern generation.
Things weren’t easy and running companies had always been hard. We didn’t think in terms of ‘employees just collapse’ because we were tough enough that that would have been silly. A few may collapse and that sucked for them, but for the most part we did our shit and lived our lives. We didn’t expect lives of leisure or for companies to speak to our personal missions. We had jobs and we had lives.
There were massive layoffs back in the day too. They sucked. But employees didn’t collapse, the world kept spinning and honestly, having been through those years it’s very very hard to relate to the young now. Younger generations do not have a monopoly on struggling or on shitty bosses, but you sure talk about them too much.
I think they just want, broadly, to divest from the American tech work force, whether that's via AI or outsourcing. If "the remaining employees just collapse" it's a data point in support of the thesis that developing software in HCOL markets is unsustainable, and if they don't, margins are better!
So I think decision-makers are seeing layoffs as win/win.
Yes, absolutely. US games developers are paid a lot more than elsewhere.
There has been a growing trend over the past couple of decades to outsource more and more game development to cheaper parts of the world, trending towards keeping only a small core team in the home country, supported by for-hire remote developers in Eastern Europe and Asia.
The other big advantage to work for hire is not needing to keep a large team of specialists employed throughout development, when they may not be required for all of that time. Keeping everyone fully utilised has always been one of the big challenges for game studios.
Ironically, AI may actually reduce the amount of outsourcing that a core team needs to do (though a lot of it is content and AI is still pretty bad at generating content).
Keeping a small core team local and outsourcing the bulk of workers, that's exactly what every company I know of seems to do these days. Not just in game development but generally. It's the biggest reason for layoffs today.
It's honestly disgusting that governments don't protect their citizens from this. Companies do this because it saves them money. Tax the hell out of them for every outsourced worker and this will all go away.
Companies are on purpose poorly run during the "gold rush" phase, which is where AI is right now. Everyone wants to not be left behind and velocity is placed ahead of profitability and especially ahead of quality.
What happens next (eventually...) is the bubble popping, which for AI will mostly look like established companies pulling back on AI hiring and especially cutting AI SaaS solutions unless they are clearly providing value and improving the bottom line.
What we think of as quality will come in the next phase, once the infrastructure woes get sorted out. Web 1.0 was pre-cloud and websites crashed all the time, no one could handle traffic spikes, etc. After a crash, stability becomes a market advantage, i.e. why Facebook won and Friendster died.
Companies under a capitalist mode of production are funddamentally incompatible with creative output because companies want a reproducible formula that they can scale. This is why we get endless sequels, annual FIFA, CoD, etc releases, adaptations of successful IP and so on. Creative output, be it music, movies, TV, games or books, doesn't scale.
There is an insatiable appetite for increasing profits. Eventually that means raising prices and/or cutting costs and the most significant cost is labor.
Game studios can only sruvive and keep excelling as long as they can maintain their culture and key talent and avoid getting finance people and accountants in charge. This is one reason why acquisitions usually mark the beginning of the end.
We're coming up on the much-ancitipcated release of GTA6. People might say that Rockstar has thus far avoided this rot but I kinda disagree. What made GTA magic for me was the social commentary and satire. I personally thought GTA5 lost its soul. Every previous GTA game I'd replay just to have fun, even if it's to do dumb stuff like causing mass pileups and explosions on the freeway in GTA:SA. I can honestly say that I never once played GTA5 again after finishing the main story and I also almost quit before I did. I have zero interest in the online crap but it's a huge cash cow for Rockstar.
So I imagine GTA6 is going to be visually stunning and I'm sure many will enjoy the new era of online gameply but I am fearful it will be even more soulless.
So, back to your point, I think the real problem is that the game devs need to own the studio. That's the only sustainable model. One could even call that the workers owning the means of production.
Are we just reverting to the mean after years of zero interest rate policy? Would love for folks with experience working in tech in the 90s and 00s especially to chime in.