No Seriously, Bobby Kotick Really is a Jerk

So Bobby Kotick said some dumb things last year. Everybody hated him, rar, rar, okay, let’s get back to work. We already knew Activision was super greedy, so why are we surprised to see proof? But recently a weird thing has started to happen: amid all the regular Kotick bashing (because he’s still saying stupid things), I’m now seeing more and more people on forums and blogs respond with “Nuh-UH! He’s not really a jerk! You’ve taken him out of context!”

Suddenly, a year later, his quotes are all “out of context”? That’s interesting. It turns out that the common reference that proves they are ”out of context” is a recent post on One Of Swords, by Dan Amrich, who happens to work for Activision PR. But just because he works for Activision PR doesn’t mean he had to defend his CEO — well, I mean maybe he was ordered to, I don’t really know. But I’ll give him the benefit of the doubt.

First off, he’s right in the sense that the average gamer may have misunderstood Kotick’s quotes. But he’s wrong in painting Kotick as being dramatically misunderstood. Here’s what I mean:

Belief: Bobby Kotick wants to “take the fun out of making videogames.” He cultivates a culture of “skepticism, pessimism, and fear,” and wants to keep his employees “focused on the deep depression.”
Source: Comments made at the Deutsche Bank Securities Technology Conference, September, 2009

Truth: As soon as I heard this quote when I was at OXM, I knew (and said at the time) that what was being reported, while likely word-for-word accurate, was not the full information or spirit of the quote. So I went digging and found the full, correct meaning.

You have to start with a look at exactly what was said in full and in its conversational context, which was transcribed from the audio recording and posted by Gamespot:

Jeetil Patel, Deutsche Bank Securities – Analyst
“What do you think the retailers’ willingness these days is to hold inventory on the video game side? Are they building positions today or are they still very reluctant and very careful of how they are buying?”

Bobby Kotick, Activision Blizzard, Inc.
“I don’t think it is specific to video games. I think that if you look at how much volatility there is in the economy and, dependent upon your view about macroeconomic picture and I think we have a real culture of thrift. And I think the goal that I had in bringing a lot of the packaged goods folks that we brought in to Activision 10 years ago was to take all the fun out of making video games.”

“I think we definitely have been able to instill the culture, the skepticism and pessimism and fear that you should have in an economy like we are in today. And so, while generally people talk about the recession, we are pretty good at keeping people focused on the deep depression.”

No, You’ve Got It All Wrong! He Just Hates Developers!

Amrich goes on to argue convincingly that Kotick was trying to make a joke with that “take the fun out of video games” thing. I completely believe that — I assumed it was a joke from the get-go. Okay, settled.

But Amrich doesn’t successfully explain the rest of that quote, the part about the fear and the pessimism. There’s no way to convincingly spin that, frankly. And even if all of it’s a joke, it’s not like this is sarcasm. Kotick didn’t follow up by saying “Ha ha, I gotcha! It’s opposite day! What I meant is that I want developers to feel less fearful and depressed!”

No, he was talking to a room full of bankers and he gave a spiel he’s used before (Amrich’s article proves it’s a semi-canned spiel) about how he keeps employees as fearful and worried as he can. And this isn’t exactly the first time we’d heard Mr. Kotick’s philosophy of minimizing creativity, maximizing cheap sequels, focusing on quarterly profit above all else, and keeping costs down with fear and intimidation. This is pretty much his status quo stuff. So I’m not trying to pillory him for any specific words in this quote. But he’s been doing this stuff for years; there’s tons of data to provide any context that might ambiguous in his quote above.

Interestingly, Amrich’s primary goal is less about that angle and more about making sure you understand that Kotick doesn’t hate games themselves. He doesn’t want to make the games less fun, what he meant is that people who work in the game industry should be afraid for their jobs and livelihoods. See? You’ve taken him all out of context!

No, I got it. I do appreciate that many regular gamers probably didn’t understand the background to the quote. But when developers like Tim Schafer go on the record about him, there is not one iota of misunderstanding.

The reason this whole thing became a thing is because developers reacted negatively to his words. Yeah, developers probably helped misrepresent him to game players along the way. But developers hate him because he’s a jerk, not because they can’t source a damned quote.

Game Companies Are Run Poorly Because…

Kotick has a point that a great many gaming companies have very poor financial management these days. That’s because only a financial dipshit would try to create a AAA game studio in today’s environment. Those billions of dollars made in “the gaming industry”? They aren’t made by the artists, designers, or coders. They are made by the middlemen: the console manufacturers, the brick-and-mortar stores, and — most upsettingly — the publishers often take a huge chunk of the pie.

But you have to use these middlemen if you want to make a big game, especially a console game. So you have to play by their rules, give away the vast majority of your profit, ship quickly, and try to stay alive. Is it any wonder that sane businessmen stopped running these studios?

The result is that most “AAA” teams are headed by charismatic game developers with few financial skills, and they get taken advantage of amazingly quickly — if they’re lucky they’re bought by a publisher for dirt cheap, but mostly they just sign all the profit away and then can’t make payroll. Even when these teams have a big successful game, the employees still get laid off. Most game developers I know have been laid off, fired, or “asked to quit” numerous times. Most game developers are already fearful for their jobs and livelihoods, trust me. Kotick wants them to fear even more, work even harder, and accept even less compensation.

And that is exactly what shareholders would hope to see from the CEO of Activision — it makes sense, at least in the short term, because it will earn them more money. Why? Supply and demand. If you’re a game developer, you know every teenage hacker wants your job, and many are happy to do your job for free — or at least for ramen, a cot, and some Dr. Pepper. Even if you have years of experience, you can be replaced by three or four newbies who may not be as good as you, but hey, they still manage to get a new sequel out the door every year, and people buy it, so who loses? Well, for starters, the employees lose.

Amrich argues that "exploit" is just a financial term. Okay, but I think what people were upset about was the whole "we'll make so many low-quality sequels that all your favorite IPs will become burned out husks" part.

In my opinion, game developers are not generally very good at finances, either company-wide or personally. You don’t get into video games to make money — at least not for long! Most game developers earn less per hour than the lowliest of web developers (again, I know this first-hand, having been both); they work very poor hours, and they have zero job security. Do you know what gets a lot of them through the grind? What they mutter to themselves as they model the feet of the 28th orc of the day at 4am? “At least I work for a fun company. It’s not some crappy bank job. And I get to be creative. ”

This is a facade — and a very thin one. Sure, they get to be creative sometimes. And the office has subsidized sodas and there’s a ping-pong table, and during lunch you can play xbox with some really fun and clever people. But does that make up for the general crappiness? No, not in general — not for more than a handful of years, anyway. Most people get burned up and go to those “crappy bank jobs” or whatever they can get, while others find niches on the periphery, making middleware, edu-games, indie games, anywhere out of the spotlight. These people still want to make games… they just can’t keep getting punched in the gut every day to do it.

But since the facade of “fun” — specifically, of a non-conformist and creative atmosphere — is the very thing that helps people stay in the industry even as long as they do, it’s really telling that Kotick would even joke about removing that.

“You Are Utterly Replaceable” – Bobby Kotick*

* This is a joke, he hasn’t said that specifically. At least not in print. Yet.

So when Kotick talks about taking the fun out of video games, please understand that he’s not saying he wants video games to be less fun to play. What he really means is that game developers need to work harder and be even more afraid for their livelihoods, because every one of them is trivially replaceable. And he has done a good job of making sure they know this and understand their economic value, which is nil.

I hope it is obvious why that upsets the nil-value cogs.

Why should non-industry people care? Because an industry with this kind of turnover rate isn’t the best it can be. Most games aren’t very good, and that’s because most game teams (especially management) aren’t very good, and that’s because developers gets squeezed and overworked and quit the industry, taking their experience with them. But the middlemen like Activision still make cash even on schlock games. Sure, dedicated gamers may not like it, but what are they gonna do? Play indie games? Ha! Come on, get real. (Sigh… eventually it will happen!)

But I don’t really even mean to argue the pros and cons of his business strategy. My main point is that he’s not being misunderstood here. This is a guy who’s worked with developers for decades… he knows the score, he knows how to say things that won’t inflame them. He just has no respect for developers and doesn’t care what they think of him. That’s probably true of a great many CEOs that profit from their employees’ youthful ambition and naivety… but they at least know not to announce the valuelessness of their human resources. Kotick, on the other hand, doesn’t care, which is why developers think he’s a jerk.

I think Tim Schafer summed it up:

His obligation is to his shareholders. Well, he doesn’t have to be as much of a dick about it, does he? I think there is a way he can do it without being a total prick. It seems like it would be possible. It’s not something he’s interested in.

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12 Responses to No Seriously, Bobby Kotick Really is a Jerk

  1. Ibn says:

    Without Bobby Kotick’s management I wouldn’t be employed right now. If he wants me to be realistic about the economy and work hard I’m gonna give him the benefit of the doubt, since his management turned a bankrupt organization into the #1 company in the industry in 20 years. Kotick is no different than the head of any other large corporation — he’s just more honest about it, and I respect that.

    Regarding Tim Schafer, I think he’s a great designer but he comes across as an idiot whenever he talks publicly about the business side of things. “Gee, I don’t understand why Activision wants money for Brutal Legend even though they cancelled it!” C’mon, Tim, you’ve been around the block enough times to know better than that.

  2. Dan Amrich says:

    “But Amrich doesn’t successfully explain the rest of that quote, the part about the fear and the pessimism.”

    Actually, it’s right there in the quote. He’s talking about the business aspect of it — skepticism, pessimism and fear “that you should have in an economy like we are in today.” That is, being skeptical of the market’s health; not assuming that everything is going to work out just fine, and being afraid of what happens if the market fails. What if EVERYTHING goes wrong, what if the whole game market crashes (again)? Do you have a plan for that?

    Personally, I think it would have been more clear if he simply said “assume the worst about the business end of things.” It likely would not be taken the way it was. But it doesn’t mean the misinterpretation is right, even if it’s wildly popular.

    He was talking with financial interviewers — you have to remember that in this case. “How do we run the business end of things” is not “how do we treat our developers.” I totally see how people took it the wrong way, but the word “developer” doesn’t appear in either the question or the answer — how did that leap happen? I think it’s because gamers and developers connect with game experiences, and investors connect with fiscal ones. Anything they read about gaming goes back to “this is what I played.” Anything investors read about gaming is “this is what I made.” The viewpoints of game as investment compared to game as experience are very different.

    I really think that’s the key misunderstanding. And like I said, I get it, because you’re coming from the developer point of view, too. But when I look at the thing in its original context, it seems clear he just wasn’t speaking to or about you guys.

    Also, for the record, It’s not my job to defend Bobby Kotick. I chose to write that article and I did my own research. As the company blogger, I talk about games, I do some cheerleading, I interview developers like I used to do as a member of the media — it might have PR benefit, but I didn’t sign up to be a spin guy. Before I came to work for Activision, I suggested some of those misinterpretations were happening, and the podcasts on which I did it are out there — I said it just didn’t make sense at face value. So I could have written that article on behalf of any outlet that wanted it, but my gig is here now. My situation is somewhat unique.

    And I love Tim Schafer. I got to interview him and he’s awesome. That’s not news.

  3. axhed says:

    YES! i freaking knew it was all PR bullshit when the very end of the article talked about how he played GH with his kids and ‘dabbled’ in MW2.

    the author’s comment that bobby kotick was “funding” diablo 3 was also full of the lulz. mr. amrich, how much of the diablo 3 budget comes from kotick and how much comes from the roughly $50,000,000 per month that wow is bringing in?

  4. Sandra says:

    Thank you for stopping by, Dan, and clarifying the motivation behind your post.

    I think, however, that you are missing the larger point here. In a sense this isn’t about Bobby Kotick at all. Of course he is focused on the financials. But the financials of our industry dictate that the best way to make money for your shareholders in the short term is to use the resources you have: the easy availability of eager young developers, the veneer of creativity and the fear of being forced to take a boring bank job, and the continued exploitation of established series.

    In other words, the best way to be a successful CEO of a game company is to cultivate a ‘culture of thrift’ – a culture that helps maintain that thrift by ‘keeping people focused on the deep depression’.

  5. Ian says:

    @Ibn – I’m glad you’re still employed, but your implication that his management style keeps people securely employed is ridiculous in the face of all of us that have had our studios closed or slashed by Activision recently.

  6. Eenheid says:

    Yikes.

    What do you suggest gamers (purchasers of gaming content) do about this mindset? Even if we wanted to buy from companies that did not treat developers badly, how would we distinguish such companies from the rest?

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  10. Stabs says:

    Depressing stuff but I think there is some light at the end of the tunnel.

    The recession is probably turning. I work with employment here in the UK and it’s getting easier to find people jobs. Kotick’s strategy rather depends on people having nowhere else to go.

    Self-publishing is working for some of the independents. For example: http://www.escapistmagazine.com/news/view/103828-MineCraft-Makes-350-000-a-Day

    And I think with the rise of the personal blog over the last ten years changes in the market have been created which have yet to manifest themselves in sales figures. Perceptions of games companies form slowly, change slowly. WoW has reaped the success of what Blizzard did in the 90s, both what they produced and how they conducted themselves. Kotick is sowing the seeds of a significant downturn in popular enthusiasm for Activision. People used to buy these games because of the studio. Now they’re buying because of the game. Once these games get too old new products are going to be harder to sell because they’re Activision. Independents are going to cost more because selling out makes Kotick their boss.

    Still the man himself will be long gone by then, laughing all the way to the bank but the long term damage he does to his company will be salutary.

  11. wufiavelli says:

    What gives the middle man their power in the industry? Do you think digital distribution will help in crushing the middle man here?

  12. BIN says:

    Where there’s smoke, there is usually fire. Kotick is a dick.