I recently uploaded a video titled “Sweet Baby Inc. is WORSE than you think?” about this controversial consultancy company and its role in promoting diversity, equity, and inclusion (DEI) in video games. In the response, I noticed a recurring objection regarding the success of Alan Wake 2. So, I’m going to try to provide additional context and address that objection.
DEI initiatives often serve a dual purpose: on one hand, they appear to promote inclusivity and diversity; on the other hand, they often obfuscate a human resources paradigm that minimizes corporate liabilities. In the case of the gaming industry, I am asserting another purpose: DEI is functionally a marketing mechanism to seek out consumers who prioritize representation and social messaging and who have the financial means to support products that align with their values, even if those products may not excel in graphics or gameplay.
DEI and Whales
I have spent a lot of time on DEI initiatives. My book, Woke Ouroboros: Segregation and Essentialism, demonstrates that it isn’t just about promoting inclusivity and diversity (obviously, read it!). But in the gaming industry, I posit that DEI also plays a crucial role in the business strategy many call “whale hunting.” This strategy involves targeting a small group of high-spending consumers, or "whales," who can significantly impact a game’s revenue.
A “whale” is a borrowed term from gambling, referring to an individual who spends a disproportionately large amount of money compared to the average consumer – a “high roller.” In the context of gaming, whales are usually players who make frequent and substantial in-game purchases, often contributing a significant portion of a game's total revenue. Game developers and publishers seek out these individuals because their spending habits can do the heavy lifting in a game's financial success.
In the mobile market, for example, 1-2% of the consumer base — whales — account for 50-70% of the money spent.
The intersection (get it?) of DEI and whale hunting becomes even more strategic when considering the economics of targeting high-spending consumers. Attentiveness to DEI standards is usually the domain of well-to-do people of traditionally marginalized backgrounds and well-to-do white liberals. Both subgroups are easy to cater to: say DEI shit.
Targeting one person with more money is smarter than targeting 1,000 people with less. In this business model, companies do not need the “best-selling” product to make money; they need to cater to a tiny number of people who will keep forking over money. The fewer people a company is catering to, the more predictable those people's spending habits will be. This is why games-as-a-service (GAAS) “works” – not because everyone wants to play GAAS, but because some people with money to spend and a propensity to spend it feel like it’s a good thing to spend it on.
The effectiveness of this strategy lies in its ability to create a loyal consumer base willing to spend more on products (and, more importantly, services) that resonate with their personal and social identities. This goal is easier to fulfill than high-effort graphics or mechanics.
Alan Wake 2
An objection I encountered in response to my video is encapsulated by a comment that questions the success of Alan Wake 2:
“Alan Woke 2 is not a massively successful game. It barely sold over a million copies. And even that number is highly sketchy... Considering places like IGN and GameStop featured it heavily for over 2 months and it was on the front page of every woke gaming website around, oh, and it won the corrupt game awards... Yet it couldn't hit the sales numbers of Yakuza Infinite wealth or Persona 3 reload... There are even rumors that it barely made back its massive development budget with advertisement. So does that really sound successful to you?”
- beckroics via YouTube
This comment raises valid points about the game’s sales and visibility. However, it's essential to look beyond immediate sales figures to understand the broader strategy at play.
Alan Wake 2 (AW2) is not a GAAS game, but its success should be measured by more than just sales numbers. In an earnings report, Remedy Entertainment stated AW2 has outpaced the sales of its previous releases, likely bolstered by the exclusivity deal with Epic Games that funded the game’s development costs. I think the intent behind these companies is clear: they're playing the long game, with narrative games potentially serving as "ads" for future GAAS projects in their shared universe.
By investing in high-quality, narrative-driven games (particularly if they can get other companies to fund development), a developer can cultivate a loyal consumer base more likely to engage with and spend money on future GAAS titles. This long-term strategy aligns with the whale hunting model, which focuses on retaining a small, high-spending group of consumers who are invested in the company's ecosystem.
In this context, Alan Wake 2 and similar titles are not just standalone products but are part of a broader strategy to build a sustainable revenue stream through a combination of acclaimed narrative and GAAS monetization. The eventual GAAS “play in the same world as Control and Alan Wake” benefits from these narrative setups.
Depending on specifics I do not have, it may not actually matter if Remedy can profit from AW2. But I would suggest that if Epic just straightforwardly funded development in exchange for exclusivity, they probably already have.
Culture War as a Red Herring
The culture war surrounding topics like DEI initiatives acts as a red herring, a sophisticated distraction from the economic mechanics at play. It exploits people of diverse backgrounds (or well-to-do white liberals) and serves the interests of the capitalist system, not necessarily by maximizing profits but by pursuing easier profits through targeted strategies. Instead, consider that this strategy seeks the path of least resistance, prioritizing secure, predictable, and lower-effort revenue streams over the pursuit of more challenging (but potentially larger) profits.
This strategy cleverly diverts attention by framing the debate within a culture war narrative, pitting progressive values against perceived traditional gaming norms. This dichotomy shifts focus from the industry’s real objective: cultivating a loyal base of high-spending individuals (whales). DEI narratives make it look like “fighting bigotry” by appealing to values and identities. This creates a false dichotomy where consumers are led to believe that supporting DEI initiatives in games is inherently progressive while opposing them is regressive. But make no mistake: it’s always about ownership and control.
As consumers or critics, we should be able to see beyond the surface-level representation and question the underlying motives of DEI initiatives in the gaming industry (or any other) at this point. Recognizing the incentives satisfied by these narratives is crucial in navigating an understanding of business. Which we should at least try to understand better as people on the business end of business.
Conclusion
By understanding the mechanics behind these initiatives, we can make more informed choices — not about the games we play and the narratives we support but in every facet of our lives. Companies are always working to take advantage of the public in every industry.
I see the video game industry as a test bed for practices that will be seen elsewhere. Thus, it makes sense to investigate and understand.
Great essay. I'm curious, why do you see video games as a test bed for other industries? Is there something about them that makes them especially suitable for this?
I loved your concept of "whales". I think I'm a whale in a GAAS game that I've been playing for about 6 years. I spend about $50 per month on it, which I know is outrageous, but yet it provides a lot of entertainment value for me, and the makers update the game monthly with new stuff. The game has nothing about diversity in it; I just thought the whale concept was interesting.