this post was submitted on 17 Oct 2023
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Valve seems to be the only company on this capitalist world that actually understands that company profits cannot and should not grow exponentially forever without eventually destroying itself. All other companies don't know or want to stop the greed ad are constantly pushing for more profits to see until where they can push the greed and milking without losing "too much" costumers. They even weight the amount of costumers lost vs the extra profits to see if its viable to lose those costumers and still profit, like Netflix. Valve does not work like this. Valve grew to a size, and that size is giving them stable and steady profit. And they are holding that size, slowly growing more here and there but nothing big. The biggest thing they did in like 10 years was the Steam Deck and they will not update it with a Deck 2 anytime soon. Valve plays the very slow, but steady profits game. This is how you win as a company. You try to keep yourself on a balance between good profits and good public perspective.
Is Google destroying itself? Facebook? Amazon?
No dude. These companies are several decades old and continue to make money hand over fist by exploiting their customers. They do this shit because it makes them a fuckton of money, because their users have no fucking principles or backbone and just lick boots every time they're stepped on.
I am not an optimistic person but literally the only explanation I have for this sort of thing is altruism. That Valve is a company that simply loves its' community and doesn't want to exploit their customers. Nothing else makes sense.
I'm not sure it's entirely accurate to say these companies aren't destroying themselves though. Are they just going to explode and die all at once? Probably not, but they will likely fade to obscurity like IBM or HP (two powerhouses of the last century). I agree that exploiting customers is how they make money hand over foot (and we just roll over for it) but the point is to make the largest possible short term gains, not to maximize profit. It's important to maximize short term gains because it makes big shareholders happy, and the shareholders (e.g., the CEO and the board) want to enrich themselves. The issue with optimizing for short term gains is that you miss out on the dividends of long term effort, which is usually significantly greater.
Something I think about occasionally is how it is that a no-name startup beat the likes of Google, MS, Facebook, etc to chatgpt. Chatgpt is the single greatest innovation in search in almost 3 decades. Google's whole business relies on users needing Google's search platform to find information. Google gets to place ads here, and that makes up the largest part of their revenue, but chatgpt threatens to upend that whole business. There is the potential for a whole new generation of advertisement technology to be baked into chatgpt that delivers an unprecedented level of ad targeting. In case you need a translation, that is massive $$$$$$$$, because advertisers want their ads to be placed in front of people who will actually buy the product (and they will pay a premium for this!), not the spray and pray strategy you see today.
So yes, in a way, Google and other companies that rely on simply extracting wealth rather than innovating/building wealth risk losing billions of dollars and eventually fading to irrelevance. I really think Facebook has passed the point of no return already in this regard, and has allowed numerous social media sites to steal market share very easily.
Which was immediately absorbed by the anti-consumer company MS for several tens of billions of dollars.
How so? Literally half the planet still checks into Facebook on a monthly basis.
They haven't stolen market share, they've created it. Facebook didn't lose any users and these other platforms still operate with a tiny fraction of Facebook's users.
Microsoft didn't "absorb" open ai, they have a partnership where Microsoft pays assloads of money to sustain openai so that Google doesn't get it. Ironically, this might be considered "long term thinking" but I wonder how long shareholders will tolerate such a hit to the books. There is supposed to be a profit sharing model here eventually (up to a certain point) but Microsoft isn't getting chatgpt, otherwise bing would have replaced chatgpt. I have to wonder if, by the time chatgpt is profitable, if there will already be better models produced by other groups (maybe even open source), especially given the pace of AI innovation. I would not be surprised if this was a net loss for MS. GPT is amazing but it has numerous drawbacks at the moment. I admit that, if they figure things out quickly, this could be a huge win for them. I would go so far as to say that this is not anti consumer at all and is exactly how the free market is supposed to work.
As for Facebook, the only data you need is that the younger generations think it's for boomers and don't use it. I'm a little older and (to your credit) I check in about once a month. I know that meta has a very powerful user data harvesting business (arguably more valuable than Facebook), but Facebook's user engagement will continue to slide if they can't capture younger users and keep millennials and gen x users on the platform. This devalues their ability to make money from ads directly, and again, they did this to themselves by destroying their reputation for short term gains. They will eventually become like Yahoo! or AOL, both of which have almost zero brand value.
Not but they do very much use Instagram.