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Why do big companies save on product and spend on marketing? (alien.top)

submitted 1 year ago by quantum-fitness@alien.top to c/entrepreneur@indiehackers.space

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Okay riddle me this why do big companies save on product but increase spending on marketing and admin?

I was reading though Blizzard-Activision financial statement and saw how they increased spending on both sales and marketing and admin by more than twice what they increased spending on product development.

This is coming Ib the wake of the flop on their newesr CoD game. The same thing is happening for Creative assenbly and the total war franchise. Way to much time spend on milking the product and not enough on making a good product.

It seem to be something that mostly happens when the companies think they cant grow anymore. They live on past glory while they slowly tank the product.

However this really seems like a bad strategy. We have seen that with games like BG3, but it also seem to be the goals with stratgies like content marketing.

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[–] andylibrande@alien.top 1 points 1 year ago

From working in large companies there are a few things, 1: marketing is easy to spend on and always gets results (or vague results that appear to be helping) vs product development is expensive and doesn't always work out with a lot of sunk cost risk 2: people that run marketing tend to be very personable as they are sales people. They tend to do a better job selling to leadership that they need more budget. 3: marketing is easily hired out to 3rd party contractors who can do the whole marketing plan for you without much employee involvement. Whereas product development requires you to be really effective at running your company, team cohesion, vision, etc.

In the case of Activision, it seems they have been challenged with development for years now so they doubled down on the part that was easy for them to execute, as they struggled to retain talent and develop product.