The Prof G Pod with Scott Galloway - Office Hours: The Booming Video Game Industry, America’s Skilled Trades Labor Shortage, & Putting Your Partner’s Needs Over Your Own

Episode Date: May 10, 2023

Scott gives his thoughts on the video game industry and its promising future. He then speaks about the decline of trade skills in the United States. He wraps up with advice on how to be a good partner and put others’ needs over your own.  Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. Welcome to the PropG Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehoursatproptomedia.com. Again, that's officehoursatproptomedia.com. I have not heard or seen these questions. First question. Hi, Scott. This is John, a geology professor from Vancouver. I'm also a mentor in a startup incubation program out of the University of British Columbia. One of the tech sectors that I don't recall you talking about is the video game

industry. A young data scientist that I've been advising is a big soccer fan and an avid player of electronic arts soccer game. She recently asked me what I thought the prospects are for the industry because she's considering applying for a job with EA or one of its competitors, despite the fact that they, like most tech companies, have recently laid off a large number of employees. I'd be interested in hearing your ideas about the future of the industry in general, and EA in particular. Thanks for your great podcast, Scott. You're an inspiration to us old academic geezers, as well as to our students and their students. John from Vancouver, thanks for the kind words and the interesting question. First off, congratulations on living in what is such a beautiful city.

I've been invited to speak a couple times in Vancouver, and I'm always inclined to say yes, because every time I go there, I just think, A, first off, Canadians are just very nice people, and B, such a gorgeous city. Anyways, UBC, that sounds like a great place to teach. The video game industry, it is one of those industries, it's like climate change. Given how important it is, I know way too little about it. We're having Yusuf Andrin, who's a colleague of mine at NYU on soon, because I recognize this industry is so important. We need to get smarter about it. Now, simply put, attention translates to time. And this is anecdotal evidence, but I'd be

comfortable extrapolating it to the whole world. When my 15-year-old comes home from boarding school, he maybe says hi. He won't even hug me anymore. I pretend, I ask if I can adjust his back, crack his back as a means of trying to fool him into hugging me. And I just hold him for 10 seconds until he starts to squirm away. And then I say, okay, breathe in deep. And I adjust his back. That's how desperate I am for affection from my 15 year old. Anyways, when he comes back, he lets me adjust slash hug him. And then he immediately goes and he plays FIFA. I would bet my kids on the weekends play two to four hours a day of video games. Wow, I sound like a bad parent saying that.

But anyways, I actually think that's better. It's more social than being on fucking TikTok where it's like, oh, you should be depressed. Here's another person thinking of killing themselves. Anyways, this industry, I think it's about $100 or $150 billion industry. We're so obsessed. We're so obsessed with the U.S. domestic box office receipts. I think the entire domestic box office industry is like $10 billion. And video games are 10 or 15 times that. So just based on the amount of attention, the innovation, I play FIFA with my

kids. I can't get over how remarkable that game is and also just how entertaining it is and how much it's progressed since I was playing Pong. My mom's boyfriend, this in the early stages when the boyfriend's nice to the son, bought me a Pong. It was like a giant computer and TV that weighed 7,000 tons.

And we set it up. And after seven hours of trying to figure it out, I got to play Pong. That was my video game when I was growing up. Anyways, and I used to go to the 7-Eleven and play Asteroids and get a big slurpee. Ooh, reminiscing, the good times, the good times. Anyways, video games, I think it's a fantastic business. In 2022, a PwC report predicted the gaming industry would be worth $321 billion by 2026. A third of a trillion dollars? According to the Entertainment Software Association and the NPD Group, total consumer spending on video games in the US totaled $60 billion in 2021. That's up 8%. So the industry

or spending is up 8%. In an economy where you have growth of 1%, that means it's growing much faster than the economy. And some, you want to get into growth industries. Why do you want to get into growth industries? Why is growth so important? Why can't we just be happy with a good company that's making the same amount every year? Because young people want to make more money every year, because we all want to make more money every year. So you need growth. Growth is everything, right? Businesses are like a shark or a relationship. If they don't move forward, they kind of die. Most of the relationships I've been in, I would describe as dead sharks. Anyway, data from Nielsen's Superdata revealed that over half, 55% of U.S.

residents played video games as a result of COVID-19. That's true of me. I'd never played video games until COVID. Research from Ampere Analysis found that the game industry market expanded by 26% between 2019 and 2021. Despite the two-year-long boom fueled by the pandemic, the momentum appears to be slowing down. I would guess some of that. Some of that is that they're now lapping really good numbers, right? I bet home delivery of grocery is probably off a little bit because people are going to the grocery store again, at least a little bit. So Nintendo reported its net profits dropped by about 6% from a year earlier. And Electronic Arts reported a 7.1% net income decline. I wouldn't let that discourage anybody, though. This is an industry that gets better and better.

It brings together creativity, technology. There's a media component. There's an advertising component. There's a subscription component. You got an industry that calls on a lot of different skills. There'll be some catastrophizing about how AI will take a lot of the jobs, maybe in certain sectors around programming or some of the social or marketing aspects of video games. But I would say this is, you would be hard pressed to find an industry that has probably got more growth prospects and is probably a better place to invest or as good a place as you could imagine to invest your finite human capital. Thanks for the question. Next question. Hey, Scott, Jonathan from St. Petersburg, Florida,

former longtime corporate employee who lost his job during the pandemic and decided to finally start my own business as a contractor here in the West Coast of Florida. I've grown a team of about 10 skilled tradespeople. The business is doing really well, but I will say I'm a little surprised as someone who's moved over from white collar to blue collar to understand the challenges that we face as a country in regards to the fact that we have a large, large shortage of skilled tradespeople in this country, how that impacts so much that's going on from our overall economic health, but as well as the opportunities that we provide to mostly young men. I'm fortunate to say I do

have young women who work for me as well. But it would seem to me that until this country decides to make the skilled trades a valuable part of our economy. We will live in a deficit of being able to get the things done that we want to do. I just don't know if we need any more great tech billionaires from Silicon Valley. And what we really need are a lot of really talented young people who know how to use geometry and build things with their hands and make things work. So Jonathan from St. Petersburg, I have a one word response. Word. I can see why my producer picked this question. You basically summarize kind of like

everything I'm feeling and advocating for right now. And that is, we in America have started, have decided that there's one track for success in our economy. And we put, as parents, our kids on this ambition wheel, hoping they'll get into MIT and go to work for either Google or Bridgewater or Salesforce. And if they don't check those boxes, which is getting increasingly hard and expensive, they failed. And we have failed as parents. And we shame them and we shame ourselves. And it's total bullshit. It's total bullshit. There are amazing jobs in the mainstream economy. Jonathan, you are going to kill it. You're clearly a smart,

thoughtful guy. There's going to be so many similar businesses up for sale as baby boomers retire with small trades companies that are looking for an exit. Will there be seller financing? I just think if I could invest in you, I would. I think you're just going to do really well. As it relates to a larger issue in America, yeah, we have decided or kids have decided and their parents, it's better to be in a barista at Starbucks and make $60,000 than a welder who makes $110,000. Anyone, the roofers, re-roofing my house in Florida, they make $150,000 a year. And they can't find them because people don't want to work in the sun anymore. Plumbers make over 200 grand. I was talking to the guy, I have dogs, big dogs, which means I develop an intimate relationship

with my local carpet cleaner. And he's a guy who used to be a pilot. And in the last, I think in 2008, the great financial recession, he got laid off from Delta and he decided, I've had enough of this. I want to take more control. And he bought a van and went to school for like six weeks on how to mix crazy potions that can literally get any substance out of any fabric. And so I've gotten to know this guy really well for a lot of reasons I won't go into. And he hired a young woman and then he hired his nephew and he walked me through the economics. This guy in his second or third year was making $180,000 a year.

And I mean, $300,000 for the business, $120,000 for the cost, and was clocking $180,000, which that's good money in Florida. Getting stains out of carpets from exploding dogs. Think about how many specialty construction jobs are going to open. We're going to start building nuclear power plants again. Who on earth maintains these solar panels? Who can fix these batteries or these energy efficient heating systems? We're going to need all sorts of skilled trade labor. We need it everywhere. And unfortunately, as an economy, we just haven't embraced it systemically. So yeah, we have failed your business. We have failed that part of the economy.

We have failed young men. Your role in it, Jonathan, is to come up with some sort of apprentice program on your own. I'd like to think that there's some sort of government subsidies that help you or maybe offset some of those salaries for apprentices. I say that not knowing if that's true or not.

An opportunity for me to virtue signal, I'm looking at a big win economically. I now try to give away more money than I make. I'm at that age where I want to start giving back. I gave away fuck all the first 40 years of my life. It was all about me and how I could be more awesome and do more awesome things with more awesome people. So I'm trying to catch up.

I'm going to have hopefully a decent amount of capital on the back half of this year. And where am I going to invest it? I'm going to work with UCLA and Berkeley with the chancellors there to come up with a series of vocational certification programs that leverage one of the most amazing government entities in the history of mankind, the University of California, that says to parents and kids, maybe you're not cut out for college. Maybe college should innovate or campuses should innovate and not try to shove

everyone through a traditional four-year liberal arts degree and maybe start producing certifications over 12 or 18 months, no internships, no bullshit, whatever, just 12 to 18 months, work hard, work hard and get a certification in cybersecurity. How many employers would be lining up to find someone who understands maybe a 12 or 18 month degree in AI, maybe a 12 or 18th or 24 month degree in specialty nursing or some sort of specialty construction, come on. Let's find, let's go into the economy and find businesses like yours and do an estimate of where there are great paying jobs,

where we can get someone upskilled in 12 to 24 months, where someone will line up and say, I will take 50, 100, 1,100 of these people once they graduate. And let's not have any admissions. Let's make it like the Navy SEALs where you just show up. I think this just ticks a bunch of great boxes in our society. And I appreciate the question and the opportunity to talk about it. And thanks for your good work. We have one quick break, but for our final question. Stay with us. Support for this show comes from Constant Contact. You know what's not easy? Marketing. And when

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Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Welcome back. Question number three. Lucas here from Paris, France. I call you my mentor. You just don't know it. Welcome back. Question number three. My wife and I, both from Paris, recently moved back to Paris after 10 years in London to be closer to my 80-year-old parents.

They're in good health, but time flies, and I want us to spend as much time together as possible. The problem is, my wife really hates life in Paris and wants to go back to London, where she prefers the work environment, the quality of life, and the environment for our child. I agree with her on several of those points, but I've always told myself I'll be there for my parents. I'm an only child and feel torn between my obligations to them and my wife. Professionally and personally, it's easy for us to either stay in Paris or move back to London. We need to make an urgent decision, and your wisdom would be greatly appreciated. Thanks, Scott.

Lucas, this started kind of scary because this started like, this is obviously an important question. And sometimes the questions are, there isn't a user manual, and there's a lot of nuance, and I feel like I need to jump on the phone and ask this person more questions. And I worry that if I make a snap judgment that people place too much faith in me and followed my advice too closely and it might be the wrong advice. However, that's not the case here, Lucas.

This is an easy one. The answer is one word, London. The most important relationship in your life is a relationship with your partner. And to be very reductive here, a happy wife, happy life. And that is your ability to be happy yourself. One of the most rewarding things in your life will be to raise competent, loving, secure children that is largely dependent upon the dynamic you have with your partner,

your satisfaction. Just so much about success comes down to a healthy relationship with what is oftentimes or should be the happiest relationship or the most important relationship, and that is the relationship with your partner. And I'm not just talking about your romantic or your sexual partner, but the person you decide to raise kids with because you're in their life for 18 years plus, probably more like 25 years. And my friend, the Eurostar, can get you to Paris in about two or two and a half hours. And if your parents are still healthy, then figure out a way for them to be in maybe in London one or two months during summer. So yeah, I get there a lot. But your ability to have a happy home life is going to make you more productive. You're going to make more money. More money gives you kind of the lubricant or the resources to take care of your parents as you get older. I'm taking care of my dad from 5,500 miles away. Why? Because what shrinks distance? Money. I can hire people. My dad is having cognitive problems and is getting anxious and is imagining, called me the other day from the desk downstairs saying, there's people with

guns here. And I can't manage that. And the first inclination is, well, I need to move to San Diego. That's not going to happen. On my professional opportunity, on my personal opportunity, no one in my family would move to San Diego right now. But with money, I can ensure there's someone who can stay there at night. I can hire a health aide. And I know that sounds, you know, nothing replaced caregiving, but money helps a lot. And your ability to have a professionally successful, harmonious home life is largely dependent upon the health and wellbeing of your family. And also, what does it mean to really love someone? And that's what you're kind of signing up for when you get married, is you're going to put their needs in as many instances as possible ahead of your own. And if your parents are healthy and they're just in Paris and they realize that your

wife is not happy and that you would be happier because C above your wife would be happier in London, then they should understand that. I've been in certain situations. I have someone very close to me whose parents are running their life and it's bullshit. Unless your parents are selfish people, which I doubt they are, they want you to be happy. I mean, let's stack rank it. People ask me how I'm doing and I'm like, well, okay, in London, the dogs are pretty happy.

The kids are happy. My partner is really happy. For me, I'm not loving London. I love the football. I love the city. I love the people. But the circumstance is I have absolutely nothing professionally going on here. And I'm on planes all the goddamn time. I'm about to get on a plane to San Diego, see above. My father's not doing well. And then I will be in Seattle, Austin, New York, Miami, trying to compensate and catch up for the professional opportunities that I've let kind of stack up. So at this age, I didn't want to be back on planes. The weather

really fucks with me here. By the way, the weather is awful. But like I said, love the football, love the city, love the people, but it doesn't compensate. So I am quite frankly, I don't want to say I'm unhappy. My worst days are better than most people's best days, but I'm not loving this. But guess what? You know why I'm happy? You know why I'm happy? Because my kids and my partner are happy. And that's what it means to be a good partner. And I find most men are sort of transistors, unless you're really selfish, and that is the people around you, especially if you like to think of yourself as masculine and kind of a head of household, you're a transistor for their happiness. So my brother, London calling. Thanks for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording

to officehoursatproftymedia.com. Again, that's officehoursatproftymedia.com. This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer, and Drew Burrows is our technical director. Thank you for listening to The Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly markets show.

Who's doing edibles? Who's doing some shrooms with the dog and going into the desert? This horse has, I'm on a horse with no name. I am on a caballo with no nombre, said the man on chocolate mushrooms. Hey, it's Scott Galloway. And on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions.

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