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Comment by maeln | Hacker News Reader

Probably not a popular take, but it's fairly common to have CEO's for big company who where never part of the production of one of the product they company sells. The idea is that at some point, your business is so large and oversee too many projects. Intuition, and experience doesn't cut it. Big firm want rationalization. This is why management become obsess with metrics, KPI and such. It rationalizes business decision. This won't be business that innovate, but that's not what their investor wants. Shareholders at EA want predictable reasonable growth, and governance match that. You don't get brought up by EA, Microsoft, Activision, etc, and then act surprise that management want you to produce "generic AAA game with a coat of paint based on X popular franchise".

Innovation and risk taking is something that smaller business do.

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That business model is at odds with any creative enterprise. It's one thing to scale a business that has a successful product that needs very little improvement over time other than efficiency gains which can be handled by a management class whose only involvement needs to be ensuring the core model is maintained and not degraded while improving operational efficiency. It's a very different thing to having to constantly innovate and create new and better products especially when those products need their own artistic merit to stand on. If you're just making the next FIFA game you'll be fine but anything that requires a plot will go over like a lead balloon.

Yes, it's the industrialization of culture. The music and movie industry shows us exactly how that works out. Big major and big studio don't innovate, they sell you well known name, reinforce it with marketing, and buy up the latest trend from smaller studio. Nothing new under the sun. Company like EA or Activision will continue to buy smaller studio that managed to get a few decent game going, will milk the franchise while its popular, then get rid of it.

That's true. They've discovered that strategy works since they can use their strengths (concentrated capital, business knowledge, lawyers, distribution system) to profit off of their competition and destroy them at the same time. It's a pretty terrible outcome for players since it destroys small studios which in the past would have used the funds from their previous success to develop more ambitious creative projects. Now those future products get managed to death and are less artistically interesting because they can't rock the boat.

There is very few companies where the executives don't engage with their own product. Imaging a film studio where the CEO has never watched a movie, or a publishing house where the CEO doesn't read books. I don't think you need to enjoy the product personally but you do need to engage with the medium at the very least to be able to understand what you are selling and to whom you should listen for feedback.

There are examples like back in February when Chris Kempczinski posted his infamous sampling of a McDonald's meal (even though he apparently does eat McDonalds regularly, he didn't put on a very good show of it). Steve Jobs famously not letting his kids use iPads. Howard Moskowitz initially refusing to drink soda during an interview and saying "I'm not a soda drinker. It's not good for your teeth." and then when persuaded to do so describing it as terrible and overwhelming. The most relevant one would be Strauss Zelnick who said in a 2025 interview "I'm not a gamer. I don't play videogames at all. I'm not the Consumer-in-Chief." justifying it by saying that his job is to hire talented developers and let them make the decisions but I would question whether you can choose the right talent if you don't understand the audience for the products they'll make.

It's very easy for executives and management to be so disconnected from the people who make up the market they are serving. When success is determined by innovation that serves that market, detachment can be a fatal flaw.

Yes, but in the interview he was talking about creating games, not consuming. I am pretty sure that CEO at those big companies probably have played game in their life. They might not be hardcore gamer who fire up Dota 2 after work, but they likely engage with the medium. I mean, the current EA CEO has had a long career being involved in the sport division of EA.

That kind of stuff is why the film industry has cycles of actors starting production companies, overturning the hierarchy with their money and successes, followed by them getting bored, selling out, the business becoming more businesslike until they start forking enough money to actors again that they again can produce their own stuff.

Netflix and co, might upend or stall that cycle, same as Steam/MS/etc can stagnate the games business.

I think games still has a cycle or two before being totally stagnant though, but regulators are working hard to fix that.

On the other hand, FromSoftware, creators of games such as dark souls, bloodborne, and elden ring, placed their main director as CEO. He still directs their main games, and admits to focus more on games than on business.

The trend has been they focus on quality, rarely compromising their vision, which started as niche gameplay ideas that are now a new genre, adopted in many new games. And the effect has been that they got a reputation for quality, and sell more and more games with each new release, with elden ring selling like 36M copies.

FromSoft has less than 500 employees. They are a big studio, but still a studio. They are not a publisher with a large portfolio like EA or Activision, MS, etc. Different business, different governance. FromSoft is owned by kadokawa, who's current CEO is an MBA dude.

Do we need big publishers to own studios?

That's not the question here. But regardless, it doesn't matter what we need, it's what the system incentivizes. Being the owner of a studio, even a big successful one like FromSoftware, comes with a lot of risk. One bad game and everything can go tits up. Studio owners therefor often have an interest in “derisking” by selling of part of the company ownership. The buyers are often publishers who see those studios as supplier and need to secure their delivery for a while, diversify, etc. This is exactly like the music and movie industries (or any cultural industry in general).

I mean, even in the software industry, this is the modus opperandi for a lot of business : Founder of startup focus on the product and growth until they become valuable enough to be brought up by one of the big company.

FromSoftware is an order of magnitude smaller than the giants of the industry, and don't need to fund the development of multiple AAA games per year.

I think Innovation in big companies does happen, but often it get's stiffled by the bean counters before something comes by it, but that is also a good thing. Small businesses should always have the potential to bring the goliath to its knees if the big business has outlived is usefulness to society as a whole.

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