The Hidden Way Video Game Companies Exploit Workers

Hello, it's OneTakeShryer. Did you know that the video game industry has a somewhat secret way of exploiting people that most people don't know much about? It is called contracting or agencies or vendors or whatever your particular game company calls it, and it is just one way to take advantage of people in the video game industry. You know, it's interesting. I feel like over the last few years we have actually seen the gaming industry improve in a lot of ways. Lead I we've seen better work conditions in a lot of ways, despite the fact that currently there is this just kind of complete upheaval and sea change and layoffs all over the place and companies just kind of shifting as they try to deal with a new climate after the ZIRP craziness of zero interest rates and um massive investments that didn't lead to much return. Um things have not

quite stabilized yet, and so that is I I'm I'm I know I recognize that I'm say talking about improvements during a very volatile time for the games industry. But still, we have seen improvements. For example, um crunch. Um I won't say that crunch isn't an issue anymore. I reported that, for example, Naughty Dog has been asking employees to work mandated overtime um for the last year, and that's continuing. Um other companies have certainly uh went through periods of crunch to ship their games, whether it was people just kind of crunching on their own cuz they saw the list of tasks um and realized it was insurmountable without putting in overtime, or people actually being asked to come in or kind of pressured to come in. That still happens, but crunch and crunch culture are discussed a lot more. A lot of companies are trying to mitigate that sort of thing more. They're trying to create environments where people have a little bit more work-life balance. A lot of people are getting older in the games industry. No longer to work no longer able to work

the same kind of nights and weekends that they might have in the past. So, that is one area where things have gotten a little bit better, just as an example. Um there's much more willingness of video game workers to speak out and talk about these issues. A lot of workers have actually been trying to unionize as a way of getting a seat at the table and confronting these issues head-on. And I'll talk about that in a video at some point in the future. Um but there is one aspect of working in games that has always been uh problematic, let's say, and never really stopped. In fact, I I just discovered this old article. I was reminded talking to someone about this and reminded of an article I wrote in August of 2020 for Bloomberg's Businessweek magazine. I will post a gift link in the show notes of this video. Um but this is 6 years ago and it is about contract workers in the video game industry, which is um that really interesting, unique way that the game

industry can take advantage of people. Okay, so what does that mean exactly? Well, so if you go to work at a video game company, a developer or a publisher, um you are probably uh going to work for Well, there there are kind of a few different buckets that you could be working there in. There's the traditional full-time employee. You go there, you sign up, you are a full-time employee of EA or Activision or Ubisoft. They give you a salary, they give you benefits, you are part of the company. Um if you are fired, uh you will be removed from the company. Um but you'll get some sort of benefits as a result of that, whatever's in your contract, severance usually is is part of that. Um you're essentially you are a full-time employee, traditional employment. There's also people who freelance. And so, if you are um working in a discipline or a field that isn't necessarily needed for the entirety of a video games production, um you might find it more useful to go out and be a contractor, a freelancer,

maybe have your own little shop that goes around and and does consulting or contracting, or maybe you just do it on your own. And that could be because you're a narrative consultant or a writer or a concept artist, and you don't need concept art the entirety of a video games production, just at the beginning phases, so maybe you just do contract or concept art on a contract basis. And then when you're done, your contract is up after 6 months or a year, or you just kind of charge people for the amount of work you're doing, whatever that looks like. That is essentially just kind of traditional freelancing contract work. Somewhere in the middle of those two though, is this kind of murky amorphous territory where you are a contractor, but also a full-time employee at the same time. And so often what that looks like is you are going to work for a game company, say Epic Games or Warner Brothers Games, and um you are kind of essentially working as a

full-time member of that company, but you're not technically an employee of that company. Instead, they bring you on through an external agency, and there are a lot of these out there. Volt and Experis and Assembly, there are a bunch of them. And so you are technically hired by that company. And what that means is that you don't have the same benefits and rights and options as the full-time employees of that company. In this uh Business Week article that I mentioned, I bring up some anecdotes including this holiday party that Activision Blizzard held at Christmas of 2018. And um they invited everybody in their Santa Monica office to the uh the big holiday bash, go drink and unwind and celebrate the year with everybody. Um and then a bunch of people got told, "Hey, actually you got these invites by mistake. You're not actually invited to this party." Because they were actually contract workers and they were uninvited from the party. And these were people who worked for companies like Volt. Um

sometimes their employee badges come in a different color. That's a famous thing at Microsoft. Um they will often times not get paid time off. So like if a if a game studio closes for the holidays, a lot of game studios take a week off during the holidays or take off for Labor Day or whatever else it is, um the contractors might not actually be paid for those days. Uh so they will essentially be just getting a pay cut because the company that they're working for decided to to take a holiday and give people off. Um sometimes after a game ships, uh everybody who worked on the game will get swag associated with it. Maybe they'll get the collector's edition of that game with like a nice statue or like some sort of cool outfit. Maybe sweatshirts that say like, "I was on the ship team for this new Call of Duty game." But if you are a uh contractor, if you are part of one of these agencies, you might not get that. Despite the fact that you are ostensibly, for all intents and purposes, you are a full-time employee

working on that game. You are not there on a temporary basis just coming in when you're needed and then leaving afterwards. You are working side-by-side with everybody else. Only difference is that you are part of this agency. And this is a real trend in the games industry. These people are kind of they they are temps essentially, but they're not actually temps. And often times, they are working at these companies for years just under this status of agency employees. Sometimes this promise of full-time employment gets kind of dangled over their head. Um and they have to kind of they feel like they if they put in a little bit of extra work, if they show that they're coming in early and staying late, that they're putting in time on the weekends, maybe they will get that full-time employment. If they are exceeding expectations, maybe they get that full-time employment. And occasionally that happens, but often times it is just kind of that carrot that is forever out of reach. If you are an agency employee, you will stay an agency employee. And

so, I mean, this can have all sorts of just kind of adverse effects as a result of this. Um for example, at Xbox this year, as all of you know, Xbox has laid off thousands of people throughout this year, um starting in July, and it's been kind of a wave that's continued since. Um most of the people who got laid off from Xbox, or the people who got laid off from Xbox who were full-time Xbox employees, uh they got certain things associated with that. They got um severance as a result of that. Um they might get an opportunity to, I don't know, look for other I'm actually not sure. Some Some companies like PlayStation when they've laid off employees, they often do like a you can apply to other positions within the organization. I'm not sure if Xbox actually did that, but severance is a big one, right? Like you get an X amount of uh paychecks um based on time served and based on whatever the baseline is. Um if you're part of an agency, if you're a contractor, you might not get that. In fact, if you're part of the agencies, you might not even be included

in that 3,200 number that Xbox has mentioned of the number of people that they are laying off. And in fact, um I mentioned this in a previous video, but one thing that has gotten a little bit under the radar is that in addition to the 3,200 jobs it was cutting, Xbox announced that it was cutting 50% of vendor spend. Vendors are what Xbox calls the agencies that it brings in to bring in full-time employees who essentially work side by side with the other employees, but are not technically Xbox. Um those people are not included in the 3,200, so it's actually much more than 3,200 people who lost their jobs as a result of this, and those people might not get severance. Uh Um so, they might be really screwed and on top of everything else um because they're part of an agency and not technically Xbox employees, even though they worked alongside those Xbox employees side by side every single day. And this happens everywhere. I just use this as Xbox as as one example. In fact, at Xbox, it's been particularly um it's it's been an unusual situation because Xbox actually

has Microsoft overall um due to all sorts of legal battles they've faced over the use of vendors and contractors over the years. They implemented a policy, and I've talked about this before, uh that um in some cases um in some situations, if you are a vendor employee, if you are a contractor employee, you can only work for 18 months, and then you have to take a 6-month break before you could potentially go back. And this happened most notably, I would say, on Halo Infinite. I've reported this when I when I talked about Halo Infinite for Bloomberg. Um but this is a big problem because you had a large chunk of Halo Infinite and 343 employees who were vendors, and they would work for 18 months, and then they would be forced to leave even if they were integral parts of the project and the game. If they were responsible for some key feature or some key component of the game, um they would be forced to exit, and other people would have to pick up the slack and like could spend another months of their lives just like learning how to um make up for that and

and take up that mantle, pick up that work. Um so, it's an almost a counterintuitive thing where it could be more expensive for a company to bring on these vendors than to not. Um yet at the same time, companies keep doing it. And I think there are a few reasons for that. One is that benefits are extremely expensive um and only getting more expensive under new healthcare changes here in the United States um thanks to the new bill um that was turned into law under the Trump administration that um did a lot of just kind of cutting the legs out of Obamacare and other healthcare things and has led to a massive rise in healthcare premiums all across the country. Employers across the country now have to pay a lot more to give healthcare to their employees and going through agencies and not having to pay healthcare um makes things way cheaper for them. Um another part of this is of course severance like you mentioned earlier. Shutting down a studio and laying people off is actually very expensive for game companies. Um

not to pick on Xbox too much, but I think it's relevant. There's been a lot of hay made about the fact that Xbox kind of allowed the game studios that it wanted to part ways with to go off and do MBOs, management buyouts, and go independent rather than getting shut down. And I think there's a lot of good to that, don't get me wrong, in the fact that Xbox that these guys were able to negotiate um to get their IPs and sometimes get runway uh in order to be able to live independently. I think that is a good thing. But um there's it's not altruistic by any means. Xbox knew that it is extremely expensive to shut down a studio because of all the severance costs and other kind of associated costs that you have to pay when you're doing that sort of thing. So, if you bring on people from agencies and contractors, uh you don't have to pay them severance when you decide to part ways with them. And again, you might be thinking, well, in the video game world, you don't need everybody working the entire time, right? Like you need a small number of

people at the beginning of a project and then you have to scale up when you start getting into production and you start building out the game and you need more artists and writers and designers and programmers actually build the game. And then when it's done, maybe you need fewer people to work on the next project. And yeah, that is definitely true. But what often happens in the case of these agencies is that people don't just come on for a single project or for a single kind of period within a project when the company needs more people. Often times they're brought on essentially like they are full-time workers and sometimes their contract might be up at the end of the project, sometimes it might just continue and they might be just kind of strung along indefinitely as contract workers to be dismissed only when it's time for layoffs at the company above them. So this is not kind of a typical like oh we're going to scale up and then scale down sort of thing. Sometimes it's the opposite, sometimes they don't actually scale down until till the economic climate is such that they need to lay people off. Um so what you wind up just happening is

this world in which at a game company you might look around and see a hundred people and uh maybe 30 they all look the same, they're all sitting there every single day, they're all working the same hours, but maybe 30 of them don't actually work for that company and they don't get the same perks and benefits and um uh they are essentially like working the same job but getting uh less for it. Um so this is a situation and this is a situation that really hasn't changed and isn't really talked about the way that um some of the other issues plaguing the video game industry are such as crunch and sexism and kind of bro culture and other things like that. Um often times testers are part of this group too um and testers despite I think there's kind of a misconception out there that you might only need QA testers, game testers at the end of a game when it's done and it needs to be uh bug tested which is absolutely not true. Um people have testers working on

a project from the very beginning um from the time and like as soon as you have a working uh prototype and you start adding into vertical slice you might have testers coming in to try it out and play around with it um give feedback. You might ask testers not just to give feedback about bugs but also about how it feels to play and you might monitor them um as if they're just kind of like focus testers coming in to check out a game. So, that's another big part of it. I'm going to read a quick quote from this from this Bloomberg article I wrote in 2020. This is from Renee Gittins, who at the time was executive director of the International Game Developers Association, which is a non-profit group for a game developers, not a union, but like kind of a I don't know, federation, a non-profit federation I would say. Doesn't have any power, but it can kind of speak on behalf of industry issues. Quote, This is Renee Gittins, quote, "There are many roles applicable only to it during a certain point of a project. So, contracts are well suited for these positions, but contracting should not be

used as a method to avoid employment expenses. But, the reality is it is and it's still happening today and in fact, I've been keeping an eye on how it's happening now in particular because a lot of companies out there have been shedding jobs, getting rid of people, realizing that actually they need some of those people to finish the video games that they need to make because they are video game companies and it turns out you need people to work on video games. And so, they are bringing them in through agencies and contractors so that they are more easily disposed and they are cheaper employees. Because, hey, it is the video game industry. All right, I'll see you all next time.