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There are downsides, it’s just that it’s the best move from a business perspective. That doesn’t make it the best move from any other angle.
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It delivers more value to customers while consuming less resources. Why isn't that a better move than something that costs more and delivers less?
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It's a prisoners dillema. It might be best choice when viewed individually but when everyone does it, it's worse for everyone.
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What are you basing “it delivers more value to customers” on?
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Customers are willing to spend more money on it.

How else do you define value?

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For a game a reasonable definition of value might be based on how well people like it or how much it entertains then (as if that could ever be measured).
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The way you measure that is by how much people are willing to pay for it.
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Twitter must be the most entertaining video game ever. Someone paid 44 billion dollars for it.
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Things get squirrely when there are small numbers of buyers and great inherent uncertainty. But for a market with many millions of buyers, yes.
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Try actually playing a modern Doom game and then a modern UE5 game or look at some benchmarks. UE games mostly run like shit, whereas Doom/idTech games are the smoothest in the entire industry.
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Fortnite is UE5 and runs well on phones. There's a lot of studios who can use UE5 poorly, and not a lot using idtech poorly to compare against.
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Efficient for who? The people who lost their jobs?
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Game making.
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