How the games industry shake-up could play out

The games industry, it would seem, is consolidating. Yet, less conspicuously, the industry is also splintering. Developers say they feel like they are part of a wave: Veterans, weary of the industry’s increasing corporatization, are leaving the AAA world to forge their own path.

And this is why the ongoing consolidation talk is a mirage. Buying companies doesn’t mean the same thing in different markets and sectors and the good thing about game development is that talent can go and set up new studios virtually any time they want. You can’t just up and leave to start a new major record company, a new movie studio, not even a huge publishing company. Upfront capital expenditure is huge by comparison. But you set up a new studio pretty cheap —again, by comparison— and you’re a modest hit away from holding sway in the space.

This snowballing is typical. The statement “once your team size crosses 100 people, everything changes” rides near the top of Gravity Well’s website. The team believes that the single biggest shift, and a common complaint of those who have been in the industry for any length of time, is the moment that a team can no longer fit in one room. Jon Shiring, cofounder at Gravity Well, has been working in games since 2001 and says that, in the transition from the PlayStation 2 console to the PlayStation 4, teams went from 30 or 40 people to hundreds. Something breaks at 80 to a hundred, he says, when you lose even surface-level relationships. At Respawn, he’d stop people he didn’t recognize to make sure they were meant to be in the office; as the team grew, he even started stopping other artists.

Limiting team size has been Gravity Well’s pitch to attract jaded developers. (Cristina Pohlenz, software and games developer at Gravity Well, says that when she worked at Nintendo, she never worked in a team of over 40 people.) Respawn simply got too big, says McCoy. “When we started, it was a small team. We were fiercely independent, and we could do things the way we wanted to do, and as the studio grew multiple teams. When it was acquired by EA, some of those things naturally had to change.”

I bet Nintendo still sticks to the 100 people rule as much and as often as possible for the reasons mentioned above. And Apple is another company that tries its best to not let team bloat, especially teams that are working on a totally new product/category so that secrecy is maintained but, more importantly, a coherent vision can develop and not shatter along the way.

Why Spotify bought Chartable & Podsights

In many ways, Chartable and Podinsights acquisitions remind me of Facebook’s under-the-radar purchase of Onavo, the VPN/data tracker. It paid $200 million in 2013 for a company that allowed it to gather deep intelligence into what was happening with various apps — who was hot, who was not, and what was going to be hot. Many sources over the years told me that Onavo allowed Facebook to figure out the potential of Snap even before Snap founders knew what they had on their hands. Onavo data was crucial in making deals for Instagram and Whatsapp, amongst other things.

Podsights and Chartable would allow Spotify to know which podcasts are most effective or have tailwinds and could get famous shortly, giving them an excellent opportunity to either lock up that content into exclusive deals or bring them in-house. And remember, they could use the same data to create copy-cat podcasts — much like how Netflix creates copypasta versions of hit shows from other networks that get popular on its platform. Since Spotify controls the “attention spigot,” it can direct it at in-house podcasts and turn them into big hits.

No one really knows if Spotify aims to use these acquisitions the way Facebook used Onavo. But it’s this kind of acquisitions that antitrust law can’t usually “see” before it’s too late. We’re conditioned for size, market share, cost of acquisition and, at best, IP. This kind of thing is tougher to see through and tougher still to be sure that seedy behaviour is certain enough to give you room to regulate early for it.

Inside The Nintendo Power Hotline

While Nintendo didn’t require any of its counselors to actually enjoy games, once a person made it past the initial temp interview, it did require a weeks-long training process. New employees had to play through games, learn about their various chokepoints and secrets, and take a massive test before they could field calls.

As I was reading this part, I chuckled thinking of the kind of training the modern game journalist typically goes through before being unleashed to the world.

There were, however, the “nightmare calls.” For example, The Goonies, based on the movie of the same name, released by Konami in 1986. As Filori tells it, most of the areas in the game look identical; it was near-impossible to identify where a player was stuck. Same with Legacy of the Wizard. HAL Laboratory’s 1989 puzzler Adventures of Lolo was another pain point for gameplay counselors.

There are always “nightmare calls”.

Sapperstein was one of the millions of kids who bought into Nintendo’s marketing around gameplay counselors. He really thought these were all-knowing game fans who could answer every question under the sun without much second thought.

“I just always felt like it was so official, and they were always kind of getting these answers off the top of their heads,” he says. “As if I was talking to Mario himself.”

I loved this part. For a hot second there, it reminded me of myself and how I imagined any professional in the space must be the luckiest and most awesome person on the planet. Then I became one and reassessed. As adults do.

More so than many executives, people talk about Arakawa with an absolute level of respect and appreciation. A lot of the people we interviewed for this piece were teenagers or young adults when they first joined Nintendo – the call center was their first job, and of course, it was an entry-level one. But Arakawa and his management team were insistent that, should people put the work in, being a gameplay counselor could be a first step towards a career within Nintendo. It didn’t matter how low someone was on the totem pole or what department they worked in; there was always room to go up at Arakawa’s Nintendo.

A distinctly Japanese corporate phenomenon, long since extinct.

It also helped that Arakawa required people in the call center to be kind to the people calling in. Beyond that even, he required every single letter sent to Nintendo of America to get a response; there was an entire team within the customer service office dedicated to just answering mail. As far as customer service goes, it was hard to beat Nintendo at this time.

Imagine that. For the cost of this approach alone, the idea is basically a non-starter today.