zomg don't take my meatfriend!

The wife and I watched Indie Game: The Movie the other night, and a) it was really good and you should watch it, and b) it led me to some thoughts relating to my earlier thoughts on the firm.

Adam Smith said a key to understanding the existence of firms is that they facilitated the division of labor which was key to unlocking higher productivity and thus more wealth. Interestingly, though, Indie Game: The Movie depicts a world where this force is potentially reversed – one where there is some market for goods that are consciously produced with undivided labor, that is, where every part of the production process is performed by the same individual or very small group of individuals. Essentially, reversion to past forms of production from more impoverished times have become a kind of luxury good in which people want to not merely play a game that is good but one that represents an artistic vision, one that is connected specifically to an individual.

Now, this isn’t a terribly novel argument, and it’s something that’s become common as a whole biosphere of local individual artisanal this’n’that has cropped up everywhere hipsters and yuppies have money to spend on nanobeer and $10 pickles or whatever. But what makes this really interesting in the case of video games is that unlike physical objects the instrinsic nature of digitization obliterates the distinction between arisinal and mass production. Super Meat Boy sold over one million copies.  One million copies. How long would it take to make a million artisanal pickles? Probably a long, long time. Yet the marginal cost of distributing a copy of a video game is now essentially zero so as long as you don’t have endemic copyright violation two guys who could make a Super Meat Boy every two years could, assuming it’s $10 a pop and Valve or whoever takes 30% half of the proceeds, could each make $1.75 million/yr. That’s a lot of money! In some sense, that’s how the internet and digital technologies are chipping away at the necessity of firms.

It is worth noting, though, that receiving one’s income in lumpy increments is tax-penalized relative to a smooth equivalent.