[game_edu] Game studies and the economy

[steve graham]

Software design and development is unusual in the differences in 
productivity among individuals and in individuals as members of a team. 
A known good performer is far more valuable than an unknown. A known 
consistent performer is far more valuable than an unknown. A known 
contributing team member is far more valuable than an unknown. The costs 
of finding and hiring an employee are significant (relative to 
salaries). The potential costs of hiring a marginal (or talented but 
counter productive) performer are high. The ramp-up time for a new-hire 
out of school is several months, and even for an experienced individual, 
it can be months depending on the complexity of the project and the 
development environment.

Software design and development is counter-intuitive in that adding 
people to a late project makes it later. (See _The Mythical Man-Month_ 
by Frederick Brooks). In general, software design and development effort 
is not fungible.

The upshot of this is that knowledgeable managers of software projects 
are extremely careful about making changes to a team.

A challenge, of course, is that not all software design & development 
efforts are managed by individuals who understand the issues.

Another factor relevant to replacing expensive individuals with less 
expensive ones is the ratio of costs for the expensive ones to the less 
expensive ones. For software development salaries, the ratios of the top 
50th, 75th, and 90th percentile to the 10th percentile are: 1.6x,  
2.0x,  2.4x.

In contrast, for lawyers, the top 50th, 75th, and 90th percentile to the 
10th percentile are: 2.0x,  greater than 2.6x,  and reater yet.

So, the costs and risks for replacing expensive software design & 
development professionals with less expensive ones are high, while the 
benefits, in contrast to lawyers are lower.

The numbers and arguments above are general for any software design 
effort, not just game design. Other areas within game design & 
development may be more like the situation with lawyers, and less like 
that of software designers. I'm not sure. The numbers were drawn from 
information available from the Bureau of Labor Statistics (lawyer's info 
was taken directly, that for software design/development was an amalgam 
of information based on programming, application development, systems 
development, and CS R&D).

The outliers in compensation are those cases where individuals have a 
substantial stake in the outcome of a project -- for lawyers, receiving 
a substantial percentage of a transaction or settlement -- for software 
developers, having options/ownership in a small company. Since such 
compensation is tied almost directly to success at a fairly narrow 
activity, it isn't really relevant to the discussion of replacing 
expensive employees with less expensive ones. A similar argument applies 
to bonuses tied to individual performance. Companies change their bonus 
plans rather than replacing employees.

cheers,
skg


Scott Maddock wrote:

> I think you may be on to something with this law industry comparison, 

> though I would think it's specifically being focused at the senior 

> level developers who, as Ian bluntly put it, just aren't superstars.  

> If you have someone who has "paid his/her dues" and is making notably 

> more than an entry level dev would, without producing significantly 

> better work, then I can certainly see a studio making that trade.  But 

> in general (and maybe I just haven't been working long enough to find 

> out what the "big bucks" is in this industry...though I do read the 

> results of the yearly salary survey!), a senior level dev doesn't make 

> SO much more than an entry level that it'd be worth trading down in 

> -experience-.  Until you've actually -worked- in the industry, even if 

> it's just an internship or a co-op, you really haven't gotten your 

> feet wet.

>  

> Somehow, I don't think that studios are really worried about the 

> stigma of constantly firing senior employees to hire cheap new ones 

> (and then repeat the process) to keep costs down (which is sad; they 

> should be, because it's wrong, but I digress...).

>

> On Thu, Apr 2, 2009 at 12:39 AM, Dan Rosenthal <swatjester at gmail.com 

> <mailto:swatjester at gmail.com>> wrote:

>

>     Has anyone considered whether the game industry is experiencing a

>     phenomenon similar to the law industry, where a combination of a

>     tightening economy and a glut of talented new graduates willing to

>     work for extremely low pay to compete for the limited number of

>     jobs, has lead to belt-tightening measures among senior staff?

>      It's been my experience that as far as major law firms go, many

>     have been firing large numbers of highly-paid senior associates,

>     to replace them with cheaper but highly talented junior

>     associates. Why pay $300K a year when you can train a new guy into

>     the job at $160K?

>

>     The reason I mention the comparison, which I'm sure has its flaws,

>     is that I was struck by the sheer number of students looking for

>     work at GDC. With the rising number of game design programs in

>     universities worldwide, I wonder if we're experiencing the same

>     kind of glut of graduates that the law firms are?

>

>     On the one hand, that means that some of the most talented

>     students have a chance to truly excel and stand out heads and

>     shoulders above the rest. On the other hand, it means that

>     talented students may get lost in the shuffle as well.

>

>     As far as law schools go, there have been an increasing chorus of

>     voices calling for schools to self-police and restrict the number

>     of students that they accept, but I'm sure we can all guess how

>     much effect that has had (protip: rhymes with zero). I haven't

>     seen the same thing from the games industry, nor am I suggesting

>     that it should be implemented: I'd love to see the day where we

>     have 300+ game design programs graduating 500+ students each per

>     year. I'm just curious if anyone on this list has considered the

>     subject.

>

>     -Dan

>

>

>     On Apr 1, 2009, at 10:13 PM, Jose P. Zagal wrote:

>

>         I also have the impression that any bad news in the games

>         industry is automatically attributed to the economy. Truth is,

>         game companies have always trimmed people, closed studies, and

>         so on. I'm not sure that things are particularly worse than

>         before. I'm not saying that they're rosy either, just that it

>         easy to get caught up in the negative hype.

>

>         For example, I would have said that GDC seemed pretty

>         empty...but the attendance numbers would clearly show me

>         wrong. :-)

>

>

>         Jose

>

>

>         Ian Schreiber wrote:

>

>             This is a great question, and in fact one of the big

>             things I was hoping to get out of GDC this year was an

>             answer to the question: why all the layoffs when games

>             (judging by revenue) are still a growth industry?

>             This is just my opinion (based on talking to a lot of

>             people and trying to "read between the lines" on the expo

>             floor), but I think it comes down to two things:

>             1) A lot of game developers are, frankly, not superstars.

>             Game companies with a lot of mediocre employees are trying

>             to cut the deadwood.

>             2) Since everyone is doing this at the same time, it

>             causes a cascade effect that is really benefitting

>             development shops. Want to lay people off, but afraid of

>             cutting the staff too much? No problem, there's lots of

>             people looking for work, so you can cut deep and then

>             staff up fast if you need to later on. Want to hire

>             people? That's also no problem, lots of talent in the job

>             market right now.

>             Now, I did see some companies hiring very aggressively. I

>             also saw a number of geographic regions heavily

>             incentivizing developers to move to their region

>             (seriously, probably a third of the booths in North Hall

>             were a location).

>             Corollaries:

>             * Students are going to have a rough time of it for now.

>             The bar has officially been raised. I think the industry

>             will always have a place for people who are genuinely

>             skilled and talented, but the marginal students should be

>             thinking about another line of work that's less demanding.

>             * The regions that are trying to attract developers (such

>             as those with booths) are worth looking at for students

>             who are willing to move out of the country AND start their

>             own independent studio while their burn rate is low. I

>             don't normally advise this to my students (starting a

>             business when you have no experience is a great way to

>             lose everything you have) but in the rare case when a

>             student is ready to take this step, it seems to be a great

>             time for it.

>             * If your institution is looking to hire

>             industry-experienced people for teaching positions, this

>             is a really great time to staff up your department. A lot

>             of people are getting sick and tired of the layoffs and

>             would like something that at least has the appearance of

>             stability :)

>             * With so many schools churning out game-related degrees

>             each year and the industry growth not keeping pace, I

>             can't see this changing in the near future. But it does

>             mean that as schools, the bar has been raised on us as

>             well; the schools with mediocre programs that produce

>             mediocre graduates will find their students unable to find

>             work.

>             - Ian

>             --- On *Wed, 4/1/09, Brena Smith /<brena.smith at gmail.com

>             <mailto:brena.smith at gmail.com>>/* wrote:

>               From: Brena Smith <brena.smith at gmail.com

>             <mailto:brena.smith at gmail.com>>

>               Subject: [game_edu] Game studies and the economy

>               To: "IGDA Game Education Listserv" <game_edu at igda.org

>             <mailto:game_edu at igda.org>>

>               Date: Wednesday, April 1, 2009, 12:54 PM

>               Hi all,

>               I have two questions: First, I know that all educational

>               institutions are not untouched by the economy these days

>             - but have

>               any of you seen any specific impact on game studies

>             departments?     Second, any thoughts on how the economy

>             has impacted the electronic

>               game industry in general?  Are game companies seeing a

>             lot of

>               layoffs?  Are students still able to find jobs?

>               Many thanks!

>               Brena

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-- 
steve graham
associate professor
computer game design
dakota state university
skg at dsu.edu
605-480-6603