Sweatshop Silicon Valley
A hit video game with an ugly secret raises the question: Can the high-tech creative class become the new underclass?
By DK Sweet
If archaeologists excavate our society a thousand years from now, one wonders what they'll make of a guitar-shaped device with push buttons instead of strings. Their bafflement will no doubt increase if the episode of 'South Park' survives which compares playing the device to shooting heroin. They will wonder how and why a big chunk of society seemed to have, momentarily at least, lost its mind over a plastic toy tied to something with computer chips inside.
Ask most anyone who has played the video game phenomenon Guitar Hero even a few times, and be prepared for gushing praise. Everyone from nongamer twentysomethings to preteen girls to middle-aged men speak of it in terms you wouldn't normally associate with a mere game. Bryan Cole, a fortysomething consultant for Sunnyvale's SigmaQuest, describes the transcendent enjoyment so many apparently get playing the game.
"Oh, it's just ridiculously fun," he says before going on excitedly about the game for another minute. His previous mild-mannered demeanor morphs into arms-waving enthusiasm. He actually uses the adjective "visceral" at one point to describe it.
"There's nothing like it," he says. "It really feels like you're playing all this great music. It's totally addicting."
Fourteen-year-old Cheyton Whiskey got turned on to the game at a friend's house and "fell in love" as he puts it. Cheyton wasn't a novice to video games, but puts Guitar Hero in a category all its own: "I definitely enjoy Guitar Hero a lot more than anything else I've ever played," he says. The viral nature of the game's astonishing growth in popularity over the last year comes out when I ask the young teen how many of his friends have played it. "A good majority of my friends have played it. It's their favorite game now, too."
Whiskey has a particular fondness for the music: "My dad turned me on to bands like the Doors and Creedence when I was younger, so I like the classic rock music in the game."
Those sentiments, and particularly the latter, make video game music producer Will Littlejohn smile with satisfaction.
"I feel really fortunate to be part of Guitar Hero, because it allows people to enjoy some of the greatest songs around in a whole new way," Littlejohn says. While you might expect that from the guy who pays the rent doing music for Guitar Hero and other music-related games, Littlejohn is a true evangelist for an entertainment he believes has an almost soulful value.
Of course, Littlejohn—along with Wave Group Sound, the production company he founded—has little choice but to rejoice primarily in the nonfinancial rewards from Guitar Hero. By the standards of the entertainment business outside the game industry, his company, plus all the singers and musicians contracted by Wave Group, supplied the major portion of what makes the game series so enjoyable.
But financially, they got left in the dust.
And so did many other little-known musicians and singers who contributed to Guitar Hero and its follow-up versions—at the same time that other contributors were receiving ceiling-high stacks of cash. How high does that ceiling reach? According to VGcharts.com, various incarnations of Guitar Hero III occupy all but fourth place in the top five rankings of American video game sales. That success mirrors the monster footprints left by the first two versions of the game. Total sales approach a billion dollars.
Trouble in the Creative Class
Los Angeles and Silicon Valley are both places where it's way better to be on top, but most of the rest of us still drink from the same overpriced cup of Starbucks, regardless. The very idea of "abused workers" seems almost absurd in places much of the world views as two of the wealthiest and most talent-friendly places on earth.
The seemingly endless success stories coming from both regions produces a gold-rush mentality. In L.A., it's the waiter with a screenplay. Here, the rags-to-riches cliché is the receptionist with stock options. Marketable talent is the coin of the realm down south, while here getting hired by the right company at the right time can be the key to the early, wealthy retirement of which no Hollywood receptionist would ever dare dream.
There's always been a dark side to the dream. Down south, entertainment industry workers famously nicknamed Disney Inc. "Mousewitz" for that company's stance on wages and working conditions. Rock bands seeking attention in Los Angeles get reduced to paying clubs for "stage space" and having to sell tickets to their own shows.
In Silicon Valley, stories about janitors getting the shaft from hugely successful tech firms littered the business pages for years. In many cases those same subcontracted janitors were cleaning up the gourmet cafeteria meal remnants left by the kind of "information workers" over which companies intensely compete for still. An alleged shortage of such workers even necessitates importing highly educated folks with technical skills from India, Asia and other regions. The bottom line: play a front-line role creating electronic stuff that makes big money and nobody screws with you.
But the ugly story behind the creation of the Guitar Hero video game series may be the harbinger of a new Silicon Valley. Could we become a place where making millions off grossly underpaid local creative talent makes even the brass-knuckle accountants at Disney green with envy?
Keep Your Head Down
Sound melodramatic? Meet "Alan." Like all the people interviewed for this story who lent their musical talents to the producers and publishers of the most successful video game in recent history, he's afraid to use his real name. Just like the New York or Hong Kong sweatshop worker, he fears a replacement will step in the instant he complains about making only $300 per song on Guitar Hero I and II. When you're not making bank the chump change matters even more here in expensive Silicon Valley.
He's afraid for his friends too.
"I'm not going to complain, because that could jeopardize other people's jobs" Alan says. He looks at his contribution to Guitar Hero philosophically, like an intern who landed a summer job with a big company might. "I got a great demo out of it and hopefully that will turn into something." Pretty game attitude for a musician with over twenty years of experience.
Can't get there from 'Hero' : Screen shots from 'Guitar Hero III,' the latest in a franchise that has cut many contributors out of the profits.
How hard was the work?
"Those sessions kicked my ass, and it took a toll for a couple days afterwards." Alan recalls about the effect it had on his voice. "Wave Group has extremely high standards for all their game work so every syllable, every trill, gets microscopically scrutinized. We're talking countless takes over two or three hours for each finished song. By the end of the session, your voice is hurtin' for certain."
Littlejohn is proud of the results and especially the degree to which the finished product sounds as good as the original classic rock tracks. Fans of the game seem to agree and Alan confirms that assessment with an anecdote about listening to the radio one morning. "KFOX played one of the Guitar Hero tracks I sang on over the phone for one of the members of the band who recorded the original version. The guy said he thought it was their version and KFOX was playing a joke on him."
Outside the walls of Wave Group, Alan enjoys an exceptional distinction as a "one take" vocalist in recording sessions. So two to three hours per song is an aberration of exponential proportions for him.
"Let's put it this way. I feel like I earned every penny of that session fee" the veteran singer asserts.
Intellectual property in Los Angeles is often protected with union contracts, royalties or back-end deals. That Alan's performances aren't compensated with even a fraction of a penny every time a Guitar Hero game prominently bearing his voice is sold is undoubtedly sweet music to the management at Activision, the nearly $1.5 billion dollar game software developer now headquartered in Santa Monica. It's a lovely beach town filled with people receiving "mailbox money" from acting, singing, writing and other things that generate more customers and more income over time. According to L.A.-based songwriter, composer and film orchestrator Tom Mgrdichian, "residuals keep creative people from falling into poverty between gigs."
Who is getting rich off Silicon Valley's new sweatshop economy? Certainly not Littlejohn's company, which might best be compared to the janitorial contracting companies Big Tech hired to avoid paying decent wages and benefits to the people cleaning their buildings. Both businesses provide services essentially for flat fees and while their owners do better than employees, nobody gets rich. Littlejohn points out he drives a 2003 Ford Escape and that the musicians he hires are well paid compared to the area norm.
Other contributors to Guitar Hero did better. Figures weren't released, but when Activision bought out the owners of original publisher Red Octane a few months ago for about $100 million, founders Kai and Charles Huang, who played a big role in inventing the game and its guitar shaped controller, no doubt got a nice payday. If total sales of Guitar Hero are anywhere near the nine million units it's said to be, the franchise may reach a billion dollars in gross retail sales by Christmas.
Could the Huangs, Red Octane/Activision afford to be more generous with the talent that made them so much dinero? Let's put it this way: if Alan received one-thousandth of 1 percent of Guitar Hero's gross revenue, it would provide a $6,000 down payment on a car to replace his limping 15-year-old car. One-tenth of 1 percent stake would enable Alan to move out of his 600-square-foot rental into a condo on San Jose's East Side without a mortgage. Virtually any decent level of residuals would help him pay for the college tuition his daughter will shortly need.
But unless Activison experiences a sudden attack of conscience, neither Alan nor any of his fellow musicians will see another penny for their hugely successful work regardless of how many more units sell. Why is that?
In short, Alan and his fellow musicians made the mistake of wanting to live and make money off their entertainment skills in Silicon Valley. In Los Angeles, it's nearly impossible to be employed on a TV or major movie set without the protection of a labor union that is enormously powerful by Silicon Valley standards. Even writers, who are about as far from the "front line" as one can get, enjoy union protection as the writers strike underscores. This makes Southern California an expensive place to produce entertainment, and many a low- and medium-budget production exits to Canada or to more affordable, less unionized, parts of the United States.
For the overwhelming percentage of mainstream entertainment projects, front-line talent is compensated more when a particular show or movie earns more. This is even true in some corners of L.A.'s video game industry. Voice-over talent (well known Hollywood actors in many cases) receives big flat fees and often residuals for work on video games.
Not so here in "digital entertainment capital of the world." In Silicon Valley, the musician's union in particular is as close to a total joke as one could imagine. Besides bothering nonunion wedding band musicians at government-owned venues or playing a minor role in local symphony contract negotiations, the union seems invisible, powerless and irrelevant. Unless you own stock in the company for which you toil, or receive overtime pay, tips or sales commissions, you're working for a flat, monthly fee.
So when Guitar Hero publisher Red Octane came to Littlejohn's Fremont production company requesting a quote for producing the music for the first two of an eventual three versions of Guitar Hero, "L.A. things" like residual payments for the musicians and singers never entered the picture. Nobody even thought about getting any grief from the union.
Your Own Personal Sweatshop?
What lessons should other members of Silicon Valley's so-called "creative class" draw from Activision-Red Octane's treatment of musicians and singers here? Is a gleaming two-story office building concealing a "creative sweatshop" headed your way?
One answer comes from
New York Times columnist and noted author Thomas Friedman. In his seminal book about globalization,
The World Is Flat, Freidman observed: "If I can buy five brilliant researchers in China and/or India for the price of one in Europe or America, I will buy the five; and if, in the long run, that means my own society loses part of its skills base, so be it." Replace "researcher" with "IT worker" and one sees the brutally efficient logic that put thousands of college educated, highly skilled, local information technology workers out of work, many permanently. Is there any reason to believe American musicians and other creative types are somehow insulated from the same fate?
According to a recent Zogby poll, more than half the American population believes we're a country "in decline." A lot of the media and many politicians focus on outsourcing as a main source of that consternation. Perhaps there's better explanation for that depressing state of mind. Maybe it's the emerging reality few of us are prepared to compete in a world where no one even stops to consider whether 1/10,000th of 1 percent in sales revenue would be better distributed to a worker than to thousands of stockholders. In that context, what country the workers come from and how many crumbs each get to eat from a particular bare bones flat fee contract is almost beside the point.
According to Freidman, musicians and singers getting recording session pay rates considered "good" by Hollywood or even Silicon Valley's low standards should realize their English-speaking potential replacements in India are but a Skype call away. The number of Mumbai-based music producers happy to provide Activision and other game firms with music for a 10th the price paid to U.S. contract producers is plenty long. Despite all those American flag lapels adorning suit lapels of corporate managers, Brownie points and promotions get awarded for lowering costs and increasing profits and not doing right by the home team.
Another answer comes from Hollywood. If you've ever tried to arrange the participation of a famous, or once-famous, American artist in an untested entertainment form for a share of the proceeds you know a returned call is rare. So almost without exception, when Guitar Hero I was a mere idea being developed by then-little-known companies, big name acts—or more accurately their representatives—weren't the least bit interested in being, quite literally, part of the game. Fast-forward two games and a half-billion dollars later and these same people are climbing over each other to get their "classic" songs from decades past licensed into Guitar Hero's monster cash-generating machine. Big Entertainment's cowardly and craven sensibilities demand a sure thing and the rising fortunes of the Guitar Hero franchise is just the kind of sure bet the entertainment industry loves.
Ironically, Littlejohn and his band of merry music makers may have put themselves out of business by helping make Guitar Hero too enjoyable, too popular and too profitable for the pimps with 90210 addresses to keep ignoring. Piling irony upon irony, Alan watched the
South Park "Guitar Hero" episode and noted the series producers misrepresented the actual game soundtrack by using the original Kansas' version of "Carry On Wayward Son" as opposed to the "play-enhanced" version Wave Group produced for the game. "That's pretty funny if you think about it," he says without a trace of bitterness at circumstances that made yet another "residual performance" payday unobtainable.
Video games now bring in more cash than the music and movie industries combined. But without the regular pay and health benefits that come with, say, a 9-to-5 job animating games for a company such as Redwood City's Electronic Arts, freelance musicians and singers who perform on video games here are, essentially, Silicon Valley's newest janitors, maybe to be replaced one day by India's. If you believe companies like Activision and other game companies wouldn't mind expanding that distinction to other members of the supposedly protected "creative class," take a hint from the title of a Judas Priest song included on Guitar Hero I: "You Got Another Thing Comin'."
in any case, not the gaffer. 
ing things up for everybody and not listening to the players like they're supposed to.
