Lessons from Hollywood

For such a juicy situation, the online debate about Infinity Ward has been pretty dull. A summary, for those who haven’t been following along: 99.99% of people believe that Activision committed a grievous error and is clueless about the value of talent — the other 0.01% of people work for Activision. Either the wisdom of the crowds has revealed itself, or anyone who sympathizes with Activision has been unwilling to speak up for fear of being mocked.

It won’t surprise regular readers of this blog that I’m on the “pro talent” side of the debate. Making great games on a strict schedule is exceedingly hard, and anyone who can reliably manage a team to that end is probably worth their weight in gold. That said, there’s an interesting question to be asked here: if we take for granted that Jason & Vince were worth their weight in gold, is it possible that they were simply demanding “too much” compensation in their ongoing negotiations with Activision (i.e. all the gold, and more on top — leaving too little for Activision’s shareholders?) Or was Activision simply greedy and unappreciative?

I doubt that we’ll ever know the definitive answer to that question; the relevant facts seem unlikely to become public knowledge. And since Activision has bungled the removal of Jason and Vince so badly that most of Infinity Ward’s senior leadership has already decided to jump ship, this situation will almost certainly end poorly for the company. Activision’s shareholders can’t possibly be well-served by the crippling of the company’s marquee studio. But hypothetically speaking, if Activision had managed to retain most of IW’s lieutenants and other employees, would it still have been a terrible mistake to drive away Jason and Vince?

I’m inclined to believe that, yes, it was a terrible mistake. That said, research on this topic is all over the map. On one hand, there’s plenty of data to support the value of star performers like Jason and Vince. Some very famous companies, like Pixar, have very publicly attributed their great performance to the leadership of one or two key stars at the helm of each production. And Pixar has obviously served its shareholders very well.

On the other hand, multiple academic studies have indicated that in Hollywood, top-tier stars tend to consume all of the value they generate (in economic lingo, “stars capture their economic rent.”) A recent study by Anita Elberse of Harvard Business School went further, claiming that when film studios employ top-tier stars, their financial valuation does not significantly increase (financial valuation being the only metric that shareholders ultimately care about.)

Film production and game development are obviously very different beasts, so it’s unclear to what extent the experiences of Pixar or other film studios are relevant to the game industry. It’s also unclear that we can compare “stars” like Jason and Vince to “stars” like Tom Hanks, as they play very different roles (if you’ll pardon the pun.) Nevertheless, it’s unquestionably true that game development, like film production, is a complex team effort – Tom Hanks couldn’t make Castaway by himself or with a weak supporting team.

So, to rephrase my earlier question: as more individual game developers become celebrities (which seems to be the direction in which our industry is slowly tracking), will video game publishers begin to look like Hollywood studios and find themselves at the financial mercy of their stars? Or will video game publishers find a way to become like Pixar and thrive hand-in-hand with their star creative talent?

Time will tell. But I’ll say this: I’m glad that I don’t work for the average game publisher. 😉