749
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 24 Sep 2023
749 points (90.3% liked)
Games
16834 readers
942 users here now
Video game news oriented community. No NanoUFO is not a bot :)
Posts.
- News oriented content (general reviews, previews or retrospectives allowed).
- Broad discussion posts (preferably not only about a specific game).
- No humor/memes etc..
- No affiliate links
- No advertising.
- No clickbait, editorialized, sensational titles. State the game in question in the title. No all caps.
- No self promotion.
- No duplicate posts, newer post will be deleted unless there is more discussion in one of the posts.
- No politics.
Comments.
- No personal attacks.
- Obey instance rules.
- No low effort comments(one or two words, emoji etc..)
- Please use spoiler tags for spoilers.
My goal is just to have a community where people can go and see what new game news is out for the day and comment on it.
Other communities:
founded 1 year ago
MODERATORS
Yeah, the reason why Valve can do that is that they are not a publicly traded company but a privately owned one. Gabe Newell doesn’t have a fiduciary duty to any shareholders, so they don’t have to squeeze every penny from their users or abuse their quasi monopoly.
The whole idea of investments always going up is an absurd idea that needs to go. At this point I infinitely prefer a private company over a publicly traded one.
It's a bit of an inherent issue sadly, if your goal is to multiply money why would you invest in a company whose profits stay the same over one whose go up? And you have no reason to care if the company eventually dies as a result, you just move your money into the next one.
And most people investing money will be doing so with the only purpose of multiplying that money, as it's mostly banks and similar institutions. In theory if the main investors of a company want it to prioritize user experience over profits, the companies' duty to its shareholders would also be to ensure good user experience. But that's never going to happen.
It's not even an "idea". They legally have to do whatever they can to make it go up. It's idiotic and poisonous.
If Gabe ever leaves Valve and the powers that be decide to go public I hope it’s done in a way that gives power to the users instead of faceless investment firms. I don’t even know what that would look like but I fear the day that Valve comes under control of an ex-AAA game company CEO or the like.
I wish something like that existed, once you go public you are obligated to grow and that has limits so you always end up squeezing your users! :/
Perhaps a transition to a not-for-profit organization structure might be what folks would prefer? It seems like a potentially better alternative than going public, but I'm not sure how it might work in practice for something like a digital storefront.
In a weird way, one could almost argue that's roughly how Valve's been operating anyway, except I imagine they've been lining their pockets more than a not-for-profit organization's owners/employees do.
I bet they make a shit ton of money but they certainly seem to reinvest enough of it too. There is a interesting concept called purpose companies here in Europe but it's not especially wide spread or planned by regulators so the transition is extremly complicated and expensive. The search engine Ecosia is a relatively well known one, it's basically a company in self ownership where no one from outside can become CEO and no one can sell or go public, they are obligated to their chosen purpose and that's where their profits go (in the case of Ecosia that's planting trees), not sure how it works exactly or if it's doable in the USA at all tho.
I said this elsewhere but that’s not true. The idea that publicly traded companies have a duty to maximize shareholder value is a myth, and anyone privileged enough to sit on a board of directors likely knows this. See this article for an explanation. Every time a board squeezes a company for short term profits at the cost of long term good will, long term profits, etc., that is because they chose to do so.
Well the relation is wrong but it's a real thing, they have a duty to grow infinitely or the sroxk price will crash and since that's impossible to achive they essentially have to squeeze their users for short term gains to seem like they still grow sooner or later
This isn't a thing.
Here's another article explaining why and how it isn't a thing, and also why people like you think it is.
Honestly, I don't care to continue this conversation, even the attempt to convince people like you is rather pointless
“People like me” meaning “People who cite their sources and investigating claims before making them?” Yes, I can understand why you might find it difficult to convince “people like me” to believe something that’s trivially shown to be false.
Each game on your account represents a share.
That sounds fun.
We should do this in the food industrie. Then I would become a steakholder.
Bro what do you think those Steam levels and experience are for? Obviously they're gonna divest the company across the playerbase and divvy it up based on Steam levels!
/s
Epic is also private though I agree with your sentiment 100%
One of the big reasons many companies go public is it's naturally a really nice retirement package for the owners of the company. The owners of the company may have put so much time and money into building the company that they don't have sufficient retirement savings, so by going public they turn a portion of their ownership into a boatload of cash as well as a boatload of wealth that can be leveraged, then simply elect a new CEO, retain their significant voting power on the board so they aren't entirely abandoning their baby and then peace out
The idea that publicly traded companies have a duty to maximize shareholder value is a myth, and anyone privileged enough to sit on a board of directors likely knows this. See this article for an explanation. Every time a board squeezes a company for short term profits at the cost of long term good will, long term profits, etc., that is because they chose to do so.
EDIT: See also This NY Times article. And note that I'm not saying that corporations, board members, etc., aren't pressured or incentivized to maximize shareholder value - I'm saying that they do not have a legal duty to do so.
It's not a myth, it's called Fiduciary Duty. The board, officers, and executives of a public company have a legal responsibility to put the financial interests and well-being of the company above other personal interests. The article you linked doesn't deny this, and it also isn't discussing the legal definition of it. It's discussing what you might call "toxic fiduciary duty", or more or less the Ferengi Rules of Acquisition. It's the idea that profit is the primary motive and should always trump all other considerations.
Fiduciary duty is important to create a concrete stance against corruption and misuse of the company's assets for personal gain. But when taken to an extreme, it becomes toxic and has negative consequences for the company. Employee wages are probably the most obvious example. There has to be a balance between underpaying and overpaying. If you chronically underpay, the best employees will seek more gainful employment elsewhere and the company will suffer from a poorly qualified workforce. If you overpay, like 100% revenue share with employees, the company will cease to make a profit and will be unable to function. A balance has to be struck to retain the best talent in order to drive success for the company; that is the point of the article you linked.
TL;DR extremism is always bad
(Please don't mistake this for a pro-capitalism rant, there's nuance to be had here)
All of that is true, but it doesn't contradict my point. Fiduciary duty isn't a duty to maximize shareholder value.
It literally is in practice.
It isn't. If it were, that would mean that in practice, board members act to maximize shareholder value because they are legally obligated to do so, and that simply isn't true.
In practice, board members and C-suite employees are incentivized to maximize shareholder value. They are not legally obligated to do so.
Fiduciary duty is a legal requirement, meaning that if you don't fulfill your fiduciary duty, you're liable. But nobody has been successfully sued for not maximizing shareholder value when their actions were in line with the business judgment rule ("made (1) in good faith, (2) with the care that a reasonably prudent person would use, and (3) with the reasonable belief that the director is acting in the best interests of the corporation"). Successful lawsuits regarding breach of fiduciary duty (in the context of corporate law) require the defendant to have acted with gross negligence, in bad faith, or to have had an undisclosed conflict of interest.
The closest instance of legal precedent that I know of (aside from "" of course) that eBay v. Newmark (Craigslist), which Max Kennerly took as meaning that corporations are legally required to maximize profits. In this case, Craigslist was found to have violated their fiduciary duties to eBay because Craigslist, in Max's words, "tried to protect the frugal, community-centric corporate culture that was a hallmark for their success."
Except, if you actually read the case notes, it's clear that the issue wasn't that Craigslist wasn't maximizing their profits, but that they were diluting the percentage of stocked owned and flexibility of selling those stocks of other stockholders. The issue wasn't that Craigslist wanted to spend half their profits supporting charities or anything like that - no, it was that they were trying to artificially limit, thus directly devaluing, the shares they had already sold. In other words, I agree that this was a case about minority shareholder oppression as opposed to being an edict to maximize profits / shareholder value.
And other than people threatening legal action, the most recent case we have (other than eBay v. NewMark) in favor of shareholder primacy is 124 years old - Dodge v. Ford. But the opposite is true:
The belief that a corporation is legally obligated to maximize shareholder value isn't just wrong; it also:
I said in practice, not in law
Just pointing out I'm a different person lol