I don’t understand how what you’re saying applies to movies. Do earlier rounds of investment get a higher return? The idea is there is a budget and you don’t start the movie until you’ve raised the money. In that case, the only two things that matter is that there are enough investors to start the project, and that the project is a success.
But it’s all a bit shortsighted, whatever is happening, because all the profit maximization is actively alienating customers. Console gaming is flat-out dying because games suck. Though, in the case of Microsoft, there is an investment angle, because they bought a lot of companies and saddled themselves with debt, so they can’t afford to take risks… but refusing to take any risks across an entire ecosystem is a guarantee of failure…
It only applies to movies and because they’re expensive enough to make that the major titles almost all are things funded by a few major producers, and the investor-first approach has been pervasive long enough that the major shareholders of the studios are that kind of investor, so they pick people to be on the board who agree with them, and the board selects C-suite staff that are good at talking to investors rather than that are good at making their company produce good movies. The kind of movie they then want to make is the kind of movie that costs a lot so they can tell investors that it’s the most expensive ever and therefore the best ever and therefore will make a morbillion dollars (and also says nothing so it offends no one and can be marketed to everyone) rather than making lots of mid-budget movies that might make many times what they cost or might barely break even or might become a timeless classic that makes a profit for decades. If their morbillion dollar movie flops, but the share price is higher than before it was made because investors expecting it to do well invested, the company’s still considered to be better off, and they’ll happily do it again.
I don’t understand how what you’re saying applies to movies. Do earlier rounds of investment get a higher return? The idea is there is a budget and you don’t start the movie until you’ve raised the money. In that case, the only two things that matter is that there are enough investors to start the project, and that the project is a success.
But it’s all a bit shortsighted, whatever is happening, because all the profit maximization is actively alienating customers. Console gaming is flat-out dying because games suck. Though, in the case of Microsoft, there is an investment angle, because they bought a lot of companies and saddled themselves with debt, so they can’t afford to take risks… but refusing to take any risks across an entire ecosystem is a guarantee of failure…
It only applies to movies and because they’re expensive enough to make that the major titles almost all are things funded by a few major producers, and the investor-first approach has been pervasive long enough that the major shareholders of the studios are that kind of investor, so they pick people to be on the board who agree with them, and the board selects C-suite staff that are good at talking to investors rather than that are good at making their company produce good movies. The kind of movie they then want to make is the kind of movie that costs a lot so they can tell investors that it’s the most expensive ever and therefore the best ever and therefore will make a morbillion dollars (and also says nothing so it offends no one and can be marketed to everyone) rather than making lots of mid-budget movies that might make many times what they cost or might barely break even or might become a timeless classic that makes a profit for decades. If their morbillion dollar movie flops, but the share price is higher than before it was made because investors expecting it to do well invested, the company’s still considered to be better off, and they’ll happily do it again.