> Oh yeah I forgot 5 BILLION dollar in revenue is a signal that the market does not want your product

Doesn't matter how big the revenue is if the market is not interested at the price you are selling.

I mean, by your logic, if I sell a dollar for 64c, and do $5b revenue, that's an indication that the market does indeed want the product, but not an indication that the market wants the product at the price you need to sell at to stay in business.

The issue is both. They're inefficient in that they hire too many people to work on things people don't want. They collate all of their workforce and capital into projects that will perform poorly, rather than splitting that up between different projects that will individually vary but have a much healthier release and lifetime. The thing that people very high up in the organization lose a view on is that while there are operating costs to running multiple individual small projects, overall they balance themselves out because the risk isn't concentrated and each budget is an entity unto itself that doesn't affect the others. A supermassive failure like Concord however takes everyone's budgets and puts it into one giant project that has to succeed well beyond reasonable or even sustainable returns because now you have the costs of the core developers, the half dozen assistant studios, and the dozens to hundreds of asset producers on contract. And because of that you have to target as many demographics as possible, which for marketers means shaving off as many of the pieces that are necessary for complex mechanisms functioning within their niche but are incongruous with the other complex mechanisms that have been deemed as appealing. In other words, they're gambling their entire income on the equivalent of a spaceship boat plane car that can't land on water, can't re-enter the atmosphere, can't drive on the roads because it's too big, and is awful to fly because it's all of those other things.

The scale is also very different. Costco earned $70.53 billion in a recent quarter (not 5B here). Their operating margin is 3.93%, which is also healthier.

Yes very different business models. Supermarkets have the benefits of frequent repeat customers

Of course it is a problem for consumers if it bankrupts the company. Healthy company is better than no company. And I mean healthy, not greedy.

It absolutely became a problem for consumers.

I think a lot of people in the gaming community would agree that Microsoft has ruined, or hindered (instead of helping) many studios they bought.

Our society has a finite capacity to do projects and to run industrial processes. We want that finite capacity to provide as much quality of life as possible (and as much expansion of our capacity to do projects and run processes as possible), and achieving that is a thorny intellectual problem, which for many centuries in our society has been solved mostly by lawyers and judges knowledgeable about corporate law, stock markets, corporate managers, accountants and investors. This entire ecosystem is predicated on the assumption that investor will try to maximize their return of investment, which is strongly correlated with profit margin.

Indeed, I had a brain fart. Thank you.

But doesn't that make situation even worse? They likely would be 100B+ market cap/total asset value if spun off into independent company, but not able to generate even 1B in annual profit? Activision Blizzard managed 1.5B income/20% margin by themselves before being bought by Xbox -- and somehow whole of Xbox now earns less?

> Why is it impossible for businesses to do long-term accounting?

3% is pretty close to 0% which is very close to -1%. Think of it as a 3% margin for error.

They have been doing long term accounting, and that's why they're resetting their business

Many reasons:

- Investors bail - You run out of cash

We should try our best to improve our society. Sometimes that will mean doing things that are economically inefficient. Your example of Stanford professor Nir Eyal is an excellent illustration: by advising corporate managers and product designers how to fulfill their role in our economic system more efficiently, Nir Eyal made our society worse.

We should expect more from our elite professors. Nir Eyal should've known better than to make a career out of studying how deliberately to addict users. But we should also expect our professors, politicians and policymakers to understand the basics of our economic system and to understand when a proposed change to our society sounds good or feels good, but has severe adverse effects on economic efficiency that outweigh the societal benefits. Those aren't the only proposed changes we should avoid, but they form an important class of them.