Is it as simple as supply/demand? People love games and game-loving developers are willing to take lower compensation to be in the industry? As a former obsessed gamer, I remember in my 20s I almost would have been willing to work at iD Software without pay if they let me.

I am a unionized software developer in media, not games. I helped the game workers at Blizzard unionize and they all spoke of the "passion tax". One reason the "passion tax" is possible for employers is that there seems to be a degree of labor monopsony for the kind of development done by AAA game studios. In this respect it's quite a bit like Hollywood film production in its heyday.

It has not lagged behind depending on how you look at it, video game development can be split into engine programming and gameplay programming. For engine programming, you only need a handful of senior engineers specializing in low level details of a video game engine, and these will get paid high appropriate wages that match industry standard salaries. For the gameplay programmers, they just seek the cheapest labor that can do "quantity over quality" type of work to pump out content and there's a large pool of juniors/interns that will accept these low wages just because they want to be a part of something popular.

Modern AAA video game development has much more in common with a traditional factory assembly line than a typical tech startup (for better or worse) - or maybe movie production is an even better comparison (especially now where most of the production seems to happen 'in post').

Also VC doesn't seem to be all that interested in investing into game dev companies, I guess because it's such an extreme hit-and-miss business (e.g. even when a game-dev company lands a massive hit, the next attempt may be a massive flop and sink the whole company).

> Ostensibly they are doing remarkable similar engineering problem solving

The engineering problems have been mostly outsourced to Unity and Epic Games (e.g. Unreal Engine)

I think a never-ending pool of young, fresh, and naïve graduates happy to sell their soul to make video games has been a strong contributor for low wages for a while. Any time someone gets too senior, just replace them with another graduate. Naturally, the product quality and timescale suffers too.

You could invert this question and it would be equally valid.

The question is why the gulf, rather than why the lag. Why is big tech pay so high?

When you compare it to other trades and industries video game dev pay is much more “normal”

Supply and demand. There's a high supply of people who want to work in video game development, which drives down the price of labor. It's the same reason why nearly all actors work for a pittance.

Video game development is largely grunt work outside of the engine

I work in tech. I would be happy to work on gta 6 for 30% of my current income.

Supply and demand would suggest that there's more supply of those willing to be paid less to work in entertainment 'on games' to meet the demand. Would be cool to see actual economics on it though.

Major studio pay the same as in tech for the base salary, the big difference is in bonus/stock.

Passion tax.

Because pay is not directly correlated to technical finesse. It is primarily dictated by how much money a company can expect to make.

And Advertising (FAANG) is insanely profitable, while doing software in other difficult fields (firmware in automotive or embedded, etc) may be technically challenging, but the margin is is only like 6-10% max

People are willing to work for less because they enjoy the work more. Also wouldn't be surprised if the gaming industry trends younger, so less experience negotiating.

Supply/demand.

For example, GPU shader programming is something people will practically fight over doing because it's so non obviously utterly addictive.

I would say dev roles in tech in general that lack an operational component also lag in pay, and much of gamedev is pure dev in a sense the wider tech industry has since largely forgotten exists.

On the art side it's even more extreme.

More people dream about building the next game than building another CRM system.

I think the usual theory is: So many of us got into computers because we loved playing video games, and wanted to make them, and then loved making games. So the game companies that will pay you money to make games (even if there's a lot of non-fun to it) don't have to pay as much as, say, a surveillance capitalism company of sharp-elbowed careerists.

IIUC, the majority of FAANG is people who are there, first and foremost, for the paycheck. (And then maybe they get interested in the work, especially if it seems like progress towards a promotion for more money, or because it gave them skills or resume keywords that they can then use to get more money elsewhere. It's the money/career that's interesting first -- craft and product are only a consequence of wanting the money.)

It's really the same in any creative industry. Employers exploit you through this combination of factors:

1. You love the area and are willing to take a cut to work in that area, particularly when the alternative is working on CRMs for a PBM;

2. Demand for these jobs still exceeds supply; and

3. The very top of this pyramid makes a shitload of money. If you get to like a Lead Engineer type position, you might be making points on unit sales. And for a big hit that can be big money; and

4. Historically, indie development wasn't a viable route to making a living but it suffers from the same distortions too. For every Notch or ConcernedApe, there are thousands of pepole who below the poverty line. Look at something as widely regarded (but niche) like Dwarf Fortress. They made bank (and deserved it) from the Steam release but they spent 10+ years making a couple of thousand of dollars a month between the two of them.

Just look at the music industry. There are artists and bands who are trying to make it, training for years and making $50 to play some local venue and they're just hoping to get noticed. In years gone by that was a record contract. Nowadays, there are alternate routes. Justin Bieber was a Youtube breakout.

Fun fact: the first artist to have a #1 single without a record contract was Lisa Loeb for Stay in the early 1990s because it was picked up for the sound track (those used to be a big deal) for Reality Bites.

Because they put up with it.

Too many people are willing to do it for low pay and long hours because of their passion for it. Also most games are not guaranteed clients and thus profits like with large corporate software.

Has it? A lot of 'big tech pay' is based on US salaries which are astronomical compared with all of Western Europe. And big game companies are lot more spread out globally. For example, in this case they're in the UK so how do their salaries compare with UK dev salaries?