this post was submitted on 28 Sep 2023
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Gaming

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[–] thingsiplay@kbin.social 27 points 1 year ago (7 children)

Company was ‘spending way more than we earn,’ CEO said in memo

It needs a genius to see that. All those contracts for timed exclusivity, all those games given for free. Most people just play free to play games on the platform and get the games for free. I thought the idea was to eat the cost and spend more money than to earn, so they can build a loyal customer base. If that wasn't the entire goal, what was it then? Why punish the staff (holy cow its 870 employees!) by cutting them off the company now? The store and launcher of Epic games already struggle to get better.

Unfortunately I can't read the article on Bloomberg, as it requires an account.

[–] Thrashy@beehaw.org 21 points 1 year ago* (last edited 1 year ago)

All these companies that are suddenly having layoffs and/or enshittifying everything at once all shared the same basic business model (pardon the Bronze Age meme format from Slashdot...):

  • Give goods or services away for free
  • Attract customers on the basis of getting goods or services for free
  • ???
  • Profit!

Years of basically free debt service and stupid VC money let them kick the can down the road for a long time in terms of figuring out what Step 3 was gonna be, up to the point that many such services didn't even bother, replacing both Steps 3 and 4 with "Sell to whichever FAANG is sucker enough to think they can leverage our userbase for their own product." High interest rates have suddenly put a stop to the money party, though, and now they're all scrambling to find ways of aggressively monetizing their services.

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