They do not have investors constantly forcing maximization of short term profits at the cost of literally everything else.
I fantasize about the idea of starting private companies for things currently dominated by public companies, with the sole idea of not being greedy and shitty.
Probably the biggest advantage they have is that they can sell devices at cost or even at a loss and still profit from increased Steam game sales, like how other console makers operate.
3rd parties can’t compete with that. Not even close. If there’s no profit from the device itself, there’s no motivation to make it. And apart from the hardware cost, they also need to pay for the R&D and corporate maintenance. They can’t compete with the Steam Deck. If they made an exact Steam Deck clone, they’d have to make it, idk ~$40 more to make a profit, but no one would buy it because the Steam Deck is the same for less. They have to give it slightly higher specs to give it a niche. That might take hardware cost up to $500 and then charge $150 more to make up for the distributor fees and then $100 to make it actually profitable. But at that point, they’ve already lost most budget and casual gamers, they might as well aim at whales and enthusiasts and make profits $300. If a $950 device sells half as well as a $750 device, it’s still more profitable.
They could sell them at a loss assuming the average Steam outlay per device exceeded the loss. This figure would be dragged down by people buying them as generic portable PCs, using them solely with emulators, using them as drone controllers (apparently the Ukrainian military do that), and such.
The Steam Deck is not sold at a loss. The initial pricing for the 64 GB unit was barely profitable, but this quickly changed with production ramping up.
This was confirmed by Valve themselves in an interview that happened months after Gabe’s famous comments about the pricing.
So yes, Valve profits from the games too, but that’s not used to subsidize the Steam Deck’s price.
Yep, this is a good explanation of more of the nitty gritty of it in more granular detail!
When you can afford to eat some of the cost… or… you don’t have shareholders telling you not to do that… well, then you get good ole ‘how capitalism is supposed to work! ™’.
Problem of course being that uh, you can just chase the luxury market for greater profit margins, stop making shit for the poors… this can work well in the short/medium term, but in the long run… if everyone does that…
… then you destroy your customer base, and the entire economy, and probably yourself.
And that’s not even getting into how companies have their own version of ‘keeping up with the joneses’… its called going into massive debt to fund an expansion because your competitor just did that… and then going into more debt to finance a stock buyback… but hey nbd, companies can fail and go bankrupt, no problem, everyone other than those helming the ship get fucked, they get golden parachutes.
Sure would be neat if we maybe had some other kind of system idk
I honestly don’t understand why most companies aren’t private instead of public. Like which founder looks forward to answering to investors when they could just be answerable to themselves and their employees and maybe board, like are they looking for a massive exit payout by going public or to raise funds to become a bigger company, but I argue if you are making enough to be profitable why chase being bigger
Because public companies get a huge infusion of cash from their IPO.
This makes them a much bigger fish in the pond.
Big fish eats the little fish.
Grow or die.
The kind of core problem with a market based economy is that markets almost always tend toward consolidation over time… and you have to have a well maintained set of regulators and laws to keep up with industries to keep this in check.
But those corps tend to have so much money and influence that they just buy the government via outright bribes/corruption and PR campaigns to dupe the masses into supporting politicians and policies that will be corpo friendly.
In short… most companies actually are private. 9/10 new business fail in a year or two, largely because they cant compete in a world dominated by a small number of very well known, very big fish.
…
Like uh, think of this.
Stock Exchanges?
Those aren’t government entities. Those are companies, private companies.
A really good strategy for a marketplace economy… is to literally be the marketplace, the platform.
Thats why basically every large game publisher either is trying to or tried to be their own content platform.
Mostly this hasn’t worked at all, but uh take Roblox, thats pretty wildy successful as more of a platform for games, than a specific game.
Its garrysmod but executed with uh… better business strategy (massively barring all the pedo problems but hey thats the cost of doing business apparently!).
The super uber game that all AAA game publishers keep trying to build and mostly failing at is a persistent world of some kind that allows for it to be its own contained ecosystem for new dlc, new cosmetics… the game isnt even fundamentally important, its the ability to have the game recieve constant inflows of money.
Gacha games exemplify this amazingly well, and they’ve been, by $$$ transaction volume, larger than more conventional games for a decade now… there is little pure monetary incentive to make a high quality game when the market keeps proving basically low quality slop that looks pretty, and can be microminetized, is an extremely effective business model.
Its basically just designing a video game as an addictive drug.
Two things massively help Valve:
Steam is a goddamned money printing machine, they are the most profitable software company per capita, per employee… possibly bar none.
Also… they’re not publically traded.
They do not have investors constantly forcing maximization of short term profits at the cost of literally everything else.
… So they can afford to … not price gauge everyone.
I fantasize about the idea of starting private companies for things currently dominated by public companies, with the sole idea of not being greedy and shitty.
They must be too busy enabling children gambling on hats
Probably the biggest advantage they have is that they can sell devices at cost or even at a loss and still profit from increased Steam game sales, like how other console makers operate.
3rd parties can’t compete with that. Not even close. If there’s no profit from the device itself, there’s no motivation to make it. And apart from the hardware cost, they also need to pay for the R&D and corporate maintenance. They can’t compete with the Steam Deck. If they made an exact Steam Deck clone, they’d have to make it, idk ~$40 more to make a profit, but no one would buy it because the Steam Deck is the same for less. They have to give it slightly higher specs to give it a niche. That might take hardware cost up to $500 and then charge $150 more to make up for the distributor fees and then $100 to make it actually profitable. But at that point, they’ve already lost most budget and casual gamers, they might as well aim at whales and enthusiasts and make profits $300. If a $950 device sells half as well as a $750 device, it’s still more profitable.
Edit: more realistic numbers
They could sell them at a loss assuming the average Steam outlay per device exceeded the loss. This figure would be dragged down by people buying them as generic portable PCs, using them solely with emulators, using them as drone controllers (apparently the Ukrainian military do that), and such.
The Steam Deck is not sold at a loss. The initial pricing for the 64 GB unit was barely profitable, but this quickly changed with production ramping up.
This was confirmed by Valve themselves in an interview that happened months after Gabe’s famous comments about the pricing.
So yes, Valve profits from the games too, but that’s not used to subsidize the Steam Deck’s price.
Could there be an argument about the R&D costs not being factored in there? So for companies that can’t compete, its literally a skill issue.
Yep, this is a good explanation of more of the nitty gritty of it in more granular detail!
When you can afford to eat some of the cost… or… you don’t have shareholders telling you not to do that… well, then you get good ole ‘how capitalism is supposed to work! ™’.
Problem of course being that uh, you can just chase the luxury market for greater profit margins, stop making shit for the poors… this can work well in the short/medium term, but in the long run… if everyone does that…
… then you destroy your customer base, and the entire economy, and probably yourself.
And that’s not even getting into how companies have their own version of ‘keeping up with the joneses’… its called going into massive debt to fund an expansion because your competitor just did that… and then going into more debt to finance a stock buyback… but hey nbd, companies can fail and go bankrupt, no problem, everyone other than those helming the ship get fucked, they get golden parachutes.
Sure would be neat if we maybe had some other kind of system idk
I honestly don’t understand why most companies aren’t private instead of public. Like which founder looks forward to answering to investors when they could just be answerable to themselves and their employees and maybe board, like are they looking for a massive exit payout by going public or to raise funds to become a bigger company, but I argue if you are making enough to be profitable why chase being bigger
Because public companies get a huge infusion of cash from their IPO.
This makes them a much bigger fish in the pond.
Big fish eats the little fish.
Grow or die.
The kind of core problem with a market based economy is that markets almost always tend toward consolidation over time… and you have to have a well maintained set of regulators and laws to keep up with industries to keep this in check.
But those corps tend to have so much money and influence that they just buy the government via outright bribes/corruption and PR campaigns to dupe the masses into supporting politicians and policies that will be corpo friendly.
In short… most companies actually are private. 9/10 new business fail in a year or two, largely because they cant compete in a world dominated by a small number of very well known, very big fish.
…
Like uh, think of this.
Stock Exchanges?
Those aren’t government entities. Those are companies, private companies.
A really good strategy for a marketplace economy… is to literally be the marketplace, the platform.
Thats why basically every large game publisher either is trying to or tried to be their own content platform.
Mostly this hasn’t worked at all, but uh take Roblox, thats pretty wildy successful as more of a platform for games, than a specific game.
Its garrysmod but executed with uh… better business strategy (massively barring all the pedo problems but hey thats the cost of doing business apparently!).
The super uber game that all AAA game publishers keep trying to build and mostly failing at is a persistent world of some kind that allows for it to be its own contained ecosystem for new dlc, new cosmetics… the game isnt even fundamentally important, its the ability to have the game recieve constant inflows of money.
Gacha games exemplify this amazingly well, and they’ve been, by $$$ transaction volume, larger than more conventional games for a decade now… there is little pure monetary incentive to make a high quality game when the market keeps proving basically low quality slop that looks pretty, and can be microminetized, is an extremely effective business model.
Its basically just designing a video game as an addictive drug.
You don’t want to be profitable. You want to be rich