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.

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

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.

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

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.)

Passion tax.

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.

Because they put up with it.

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?