Salary distributions in the video game industry are starting to look a lot like salaries in the movie and TV industries. The bottom tends to pay peanuts and demand long hours, because there's an oversupply of willing applicants relative to the demand for low-level talent. (The question "Who wants to make games/movies/TV shows for a living?!" will always be exciting enough to attract entry level applicants by the boatload).
The top tiers of any of these industries, however, pay millions. I'm not talking millions because people started their own businesses and got acquired. I mean millions in salary and/or bonus per year, as employees. This is because, as you put it, the supply of extremely talented and skilled workers at the higher tiers is outpaced by demand. (And also because they're hit-driven businesses -- and, absent any real data as to a causal relationship between Superstar A's presence and Supergame B's performance, Superstar A receives the full benefit of correlation).
So you end up with a sort of pyramid structure to the business: lots of workers at the bottom, slightly fewer at the middle, very few at the top, and the compensation flows disproportionately from the top down.
A lot of industries function this way, but the various entertainment industries have especially interesting distributions because they're so inherently attractive to potential applicants.
People outside the industry make these kind of generalisations all the time but in practise it's nonsense. Sure millions of kids may want to be video programmers, but very few are qualified (i.e: can program well enough and have sufficient CS background to cope with the job.
Where I work we have a good mix of veterans and recent graduates. Typically they are from top North American Universities including Stanford and Waterloo.
The top tiers of any of these industries, however, pay millions. I'm not talking millions because people started their own businesses and got acquired. I mean millions in salary and/or bonus per year, as employees. This is because, as you put it, the supply of extremely talented and skilled workers at the higher tiers is outpaced by demand. (And also because they're hit-driven businesses -- and, absent any real data as to a causal relationship between Superstar A's presence and Supergame B's performance, Superstar A receives the full benefit of correlation).
So you end up with a sort of pyramid structure to the business: lots of workers at the bottom, slightly fewer at the middle, very few at the top, and the compensation flows disproportionately from the top down.
A lot of industries function this way, but the various entertainment industries have especially interesting distributions because they're so inherently attractive to potential applicants.