This Week in Business: The Gaming Industry’s Fear of Transparency
Industry’s Fear of Transparency
The gaming industry has a longstanding aversion to transparency, and it seems to be getting worse. From the secrecy surrounding development to the unnecessary non-disclosure agreements (NDAs), this industry thrives on keeping its cards close to the chest. Even situations where a certain degree of secrecy may be warranted, such as marketing plans, the industry goes to extreme lengths to prevent leaks and sue individuals for sharing game news.
The lack of transparency extends to various aspects of the gaming industry. For instance, there is often confusion regarding pre-rendered or in-engine footage in game trailers, the presence of downloadable content (DLC) on game discs, and the use of non-fungible tokens (NFTs) in games. Companies like Epic, The Pokémon Company, and MiHoYo have been known to take legal action against those who leak game news, further contributing to the industry’s opacity.
Over the years, the gaming industry’s inclination towards transparency has deteriorated. Previously, there was greater access to sales figures, year-over-year comparisons, and other relevant data. However, these days, companies like Circana (formerly NPD) provide limited information, often omitting important sales figures and only sharing the top 20 software list without any specific numbers. This lack of transparency extends to engagement figures, as publishers and platform holders selectively release data that portrays their products in a positive light.
It’s not just sales data that lacks transparency; the gaming industry has also struggled with transparency in other areas. Free-to-play games, for example, were initially opaque about microtransactions and the potential for spending real money within the game. It took public outcry and legal action for companies to disclose the odds of obtaining desired items from loot boxes. The industry’s response to these concerns was a minimal informational label indicating the presence of loot boxes in games, but even this label is not consistently applied.
The refusal to be transparent extends beyond the gaming experience itself. For instance, developers are often reluctant to share information with governmental bodies, citing “commercial sensitivity” as an excuse. This lack of transparency only serves to fuel public suspicion and reinforces negative assumptions about the industry.
The gaming industry’s lack of transparency is particularly evident in recent events. Naughty Dog, a prominent game developer, recently laid off numerous contractors without offering severance or providing support. Furthermore, the studio attempted to keep the layoffs quiet, pressuring employees not to discuss the situation publicly. This lack of transparency only exacerbates the negative impact on individuals affected by the layoffs and reflects poorly on the studio’s reputation.
In contrast, other companies have shown a more responsible approach to employee layoffs. Epic Games, for example, provided generous severance packages, accelerated stock options, and career transition services to employees affected by layoffs. The company also promptly and openly acknowledged the layoffs, providing accurate information to the public.
The lack of transparency not only damages the industry’s reputation but also harms its employees. Contractors, in particular, often face precarious employment, low pay, and minimal job security. The disregard for their well-being and the inadequate support provided during layoffs further reinforces the industry’s exploitative practices.
The gaming industry must recognize that transparency is essential for building trust and maintaining a positive public image. By being open and honest about development processes, sales figures, and treatment of employees, the industry can address public concerns and dispel negative assumptions. Failure to do so may ultimately harm the industry’s long-term prospects and reputation.