What does oil represent? Us. Gamers.
April 12, 2013 6:19 AM Subscribe
It seems like this could be easier to explain without the analogy. The gaming marketplace is not that complicated.
posted by Brocktoon at 7:03 AM on April 12, 2013 [2 favorites]
posted by Brocktoon at 7:03 AM on April 12, 2013 [2 favorites]
You can also substitute "gamers" for "movie goers" and it still more or less works. I would bet there are a lot of other industries where it could apply, too. It's really not that new a story: big companies get too big, they're slower and less agile than small companies, the small companies thrive while the big ones are suffocated by their own inertia, the big companies die, the small companies get big and slow, the cycle of life capitalism continues. So it goes. Computer gaming is just a new enough industry that we haven't seen that cycle a lot of times for it like we have for most every other industry.
posted by mstokes650 at 7:18 AM on April 12, 2013 [1 favorite]
posted by mstokes650 at 7:18 AM on April 12, 2013 [1 favorite]
The analogy didn't work for me, since the author doesn't seem to know much about the oil business and gets most of his oily facts completely wrong. I think he could have improved the article by dropping the oil analogy, and just expressing his simple idea in a few simple sentences.
posted by Balna Watya at 7:38 AM on April 12, 2013 [4 favorites]
posted by Balna Watya at 7:38 AM on April 12, 2013 [4 favorites]
This analogy broke down for me, and when they said: The wildcatters are in position to drill for the rest of their lives, if they want to.
because that is so far from reality that it is just silly.
Some of these wildcatter's wells pay off. Many more, though, turn out to never be profitable, because the oil company overpaid to such a degree to acquire the well that it never paid back the original investment.
One in 10 oil wells results in a discovery historically (shale might have changed that... but even that requires prior drilling), but they have the whole "borrow money to drill wells to prove oil potential to sell to bigger oil to pay back debt" treadmill happening. They just don't make it work.
(Drilling for shale is a bit like speculating real estate based on Luthorcorp projections).
posted by Mezentian at 8:10 AM on April 12, 2013
because that is so far from reality that it is just silly.
Some of these wildcatter's wells pay off. Many more, though, turn out to never be profitable, because the oil company overpaid to such a degree to acquire the well that it never paid back the original investment.
One in 10 oil wells results in a discovery historically (shale might have changed that... but even that requires prior drilling), but they have the whole "borrow money to drill wells to prove oil potential to sell to bigger oil to pay back debt" treadmill happening. They just don't make it work.
(Drilling for shale is a bit like speculating real estate based on Luthorcorp projections).
posted by Mezentian at 8:10 AM on April 12, 2013
Yeah, nobody's hurting like the big oil companies ... ???
posted by rikschell at 8:25 AM on April 12, 2013
posted by rikschell at 8:25 AM on April 12, 2013
Yeah, nobody's hurting like the big oil companies ... ???
Most oil companies aren't big.
Hell, in the US you have a lot of mom'n'pop companies as weird as that sounds.
Apparently where you live you have the Cumnock Shale. Assuming it's 1,500 feet below where you are it's not overly
taxing to drill and take samples. Find the right TOCs and you can sucker some idiot into funding even more drlling, giving yourself a royalty from production in the process.
It's a bit like gamed slot machines, if I want to return it to the topic du jour: really, we're in the era of the first PCs with your pacman, panic and space invader clones.
posted by Mezentian at 8:53 AM on April 12, 2013
Most oil companies aren't big.
Hell, in the US you have a lot of mom'n'pop companies as weird as that sounds.
Apparently where you live you have the Cumnock Shale. Assuming it's 1,500 feet below where you are it's not overly
taxing to drill and take samples. Find the right TOCs and you can sucker some idiot into funding even more drlling, giving yourself a royalty from production in the process.
It's a bit like gamed slot machines, if I want to return it to the topic du jour: really, we're in the era of the first PCs with your pacman, panic and space invader clones.
posted by Mezentian at 8:53 AM on April 12, 2013
dubious quality.
posted by mrgrimm at 9:15 AM on April 12, 2013 [1 favorite]
posted by mrgrimm at 9:15 AM on April 12, 2013 [1 favorite]
And then there's the part where the gaming industry isn't polluting the world and its accidents don't cause birds to get covered in oil.
posted by DoubleLune at 11:15 AM on April 12, 2013
posted by DoubleLune at 11:15 AM on April 12, 2013
I guess I find fault with the analogy because it seems to say big companies like EA are doomed, just like BP, Shell, Exxon, etc. And it seems to me that those oil companies are doing just fine, so maybe EA isn't so doomed after all.
posted by rikschell at 11:57 AM on April 12, 2013
posted by rikschell at 11:57 AM on April 12, 2013
The analogy of game companies mining their potential customer base is fair apt IMO. Especially the part where large companies have a capital base that is to expensive to go after smaller market segments. You see this pretty plainly where companies shut down the servers for MMOs that are still making money.
posted by Mitheral at 7:37 PM on April 13, 2013
posted by Mitheral at 7:37 PM on April 13, 2013
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posted by rebent at 7:02 AM on April 12, 2013