imo The only time it works "well" is with successful indie companies.
Indie companies are the absolute worst - there are occasional success stories (like, say, No Man's Sky) but they always involve insane overtime and fiscal risk - Sean Murray sold his house to keep the company afloat. And No Man's Sky - even with all the controversy - is one of the biggest recent successes (with the last one to go as mainstream being Minecraft IMO). If you make those fiscal and health gambles and lose then you're SOL - there are thousands of games made by passionate people that could have been good that just never hit the right PR vein or happened to have a buggy v1.0 and got written off by the community.
These sweetheart deals are practically impossible for Indies (including ex-AAA workers) to compete against and replicate, and its leading to industry stagnation.
As long as the standard rate at Apple, Google, Valve, Microsoft, Sony remains 30%, I would not advise anyone to work in the games industry. At least Nintendo gives customers 5% cashback on Switch, leaving an effective commission rate of 25% (a major reason why that platform has been so successful and an oasis of success for Indie devs).
The first thing a GameDev Union should fight for is fair commission on these platforms, independent of entity size.