Larian publishing director on mass layoffs: 'None of these companies are at risk of going bankrupt. They were just at risk of pissing off the shareholders'
Larian publishing director on mass layoffs: 'None of these companies are at risk of going bankrupt. They were just at risk of pissing off the shareholders'
"We should be humbled by this period. It doesn't feel like we're humbled by this period as an industry."
Speaking with Game File (users will encounter a paywall) at the Game Developers Choice Awards, Larian director of publishing Michael Douse gave his take on the current state of the industry, including some sharp criticism on the wave after wave of mass layoffs we've been seeing.
"They are an avoidable fuck-up," Douse said. "That's all they really are. That's why you see one after the other. Because companies are going: 'Well, finally. Now we can, too. We've wanted to do it for ages. Everyone else is. So why don't we?' That's really kind of sick."
This whole myth stakeholders are the reason why board members make cold-hearted decisions lets them off the hook as if they're somehow at the mercy of the evil shareholders. For most companies there are majority holders, and many of them sit on the board or are the CEO, and then there's fund investments from retirement accounts, and then there's the average share holder who is most likely just a middle class schmo who chose a few stocks and doesn't really pay attention. They're not doing it because of the evil shareholders. They're doing it because they hold lots of shares, and they get big bonuses and golden parachutes by shaving percentage points off their expenses. They're doing it because of their own greed, not because of the demands of others. They're heartless, and they've managed to create this common mythology that they're not responsible for the decisions they make.
That doesn't mean they're not doing it to appease the market - it just means that the stock market existing and them having shares gives them misaligned incentives.
The "market" is awful for demanding that and they're awful for giving in to the idiocy.
I would imagine there are some shareholders with a significant portion of shares, but yes, on the whole BoD/executives.
There are definitely companies with psychopathic majority shareholders. But it seems like on-average it's the board making these decisions to benefit themselves. Then they blame it on the nebulous shareholders .
No, I don’t think so. CEOs don’t just make these decisions for strictly monetary gain. Otherwise literally every company would be constantly conducting layoffs or whatever short-term tactics to push the stock up so the C-Suite could cash in.
The BoD and shareholders absolutely do have clout in company decisions, mostly large shareholders pressuring the BoD, but the a smaller shareholder selling off and helping tank stock value has power as well though unfortunately they’re usually the last to get their order in.
Would some CEO knowingly start pulling strings to maximize short term gain and sell off assets to make a buck on a company that’s not doing well? Sure. Happens all the time, Sears comes to mind as a fairly recent company that got fucked over for a buck. Toys’r Us too. But those companies were in real trouble. If Best Buy goes that way you’ll know it.
Can't sit around expecting corporations to grow a soul. This just continues to highlight the need for some radical employment laws and regulations. Good luck with your voting.
Unions.
Hell yeah, comrade.
Absolutely, it's all due to how the stock market responds to dips - large corporations will purposefully overhire so they have positions to cut if they need to inflate their stock price. It's so fucking dumb.
"Kind of?" It's entirely all the way messed up.
In my opinion game studios should not sell out to investors and/or have publicly traded stocks as it will lead to profit making the calls eventually. It is tempting to get a bunch of investment, I know it would make my game studio easier to run right now, but then you are constantly reminded how it all ends up. Don’t like the system, stop playing in it and build your company slowly and organically instead and retain full control.
Same goes for many businesses outside of gaming. Imagine if there was no such thing as the stock market / investors and all companies had to grow on their own merits.
The issue comes in when these smaller studios become successful. Let’s say you started your own studio with 10 other people. You own 50% of the stock, the rest of them own the remaining 50% all split evenly. You make Turbo Assault, and it’s wildly successful. Microsoft has taken note.
They offer to buy your share of the company for 100m. What are you going to do? If you don’t take it, your buddies will sell for a 10m windfall each. Or they offer to buy it all. You not going to sell? Of course you are.
That is true and is the primary reason I have no stocks and am not even incorporated. I am a sole proprietorship and everyone I work with I pay for their talent as needed and they are their own sole proprietorship doing their own thing and get paid fairly for their work. Yes this means I cannot get to market fast, and I am ok with that. Everyone is compensated whether or not my project is successful and I retain full control if it is.
At this point, can we just pass laws restricting what shareholders can do? I mean ordinarily I wouldn't do that, but there is clear evidence that they are abusing their power.