I greatly appreciate the way you've framed this thread
@billcorr
To begin, I see a few logical errors in this very thread. The main one being a failure to compare like-to-like. This occurs when people make an "apples-to-apples" comparison by comparing two things that are fundamentally different as if they are the same. In this case, that's comparing the sales of HOI3 to HOI4.
Paradox was a fundamentally different company when it released HOI4. Its advertising, quality of life improvements, polish, DLC model, etc. were all radically different. Its popularity due to CK2 and EU4 was also at an all-time high. Paradox was still fairly niche when releasing HOI3, and it was released under the "old model." Thus, comparing the two is comparing apples-to-oranges. It's not a valid foil.
"Self fulfilling prophecy"
The combination of these two is probably the biggest set of logical errors people might make when evaluating HOI4.
First, a little history/background to illustrate this.
HOI4 released with a lot of experimental features. Some areas of the game were much deeper than previous releases, some were much shallower or, in some cases, nonexistent. Focus trees were very basic. It's no secret that the AI was atrocious at release and there were a host of issues. Some people stopped playing the game because of this.
Then, as things began to improve, the devs seemed to focus on adding more focus trees at the expense of mechanics with TfV and DoD. Some features that many argued should be in the base game were gated behind DLC, for example the spearhead order. Some people stopped playing the game because of this.
Then, with WTT, the devs went heavy on alternate history. But, there was enough plausibility to some of the branches (Nationalist China fighting the Warlords, Puyi actually being in power during this timeframe) that many history-minded players were willing to accept these paths, especially since Japan got plausible alt history with the crazy stuff. With Germany, I think many players were relieved that they could now play a warlike Germany during this time period without playing as Nazis.
MtG went off the rails entirely for the most part. Aside from a good plausible alt-history focus tree for Britain, the rest was rather outlandish, particularly the United States. I only purchased this DLC because of the naval rework and because it was required for compatibility with several mods.
This is where I "got off the train" so to speak. I mostly stopped playing the game once it became readily apparent that the devs are no longer catering to me, someone who bought the game because I wanted to
"take command of any nation in World War II; the most engaging conflict in world history."
Simply put: I like a little more WWII with my WWII game. The fact that it took so long to add
fuel, the fact that the USSR still hasn't been reworked and when it is, will inevitably have a Romanov path (taking time from interesting paths within the Communist sphere), and that, as
@kimidf mentioned, it
took a community outcry on the forums to even
have a historical path for Portugal, all point to the devs trying to make a different game than the one I was advertised.
So, as OP puts it, what are the logical errors?
Survivor bias looms large, especially when using telemetry. Paradox only has data on players
playing the game. So when you see those tables talking about the percentage of players who take these alternate history branches, those are
only the players who have kept playing. HOI4 sold over a million copies. Far fewer than a million people play this game on a regular basis.
Further, that
only includes players who play without mods. According to Dan Lind himself,
about 64% of players play mods. That definitely includes me, since I don't think I've played vanilla since 2016.
Unfortunately, Paradox does not disclose the exact numbers of players from which they are drawing these percentages, and even still we would need more detail to really get into the stats ( For example, is all that's required to be counted to start the game? If so, could just firing up a new game once as each nation to look around, then not playing, be counted in the stats? If so, then the stats are misleading for the conclusions that are drawn from them).
Survivor bias is also present on these forums. Many like myself who are dissatisfied have stopped posting entirely, or only come back occasionally.
Self-Fulfilling Prophecy follows quite easily from this. If all your business decisions are being made based on data drawn from people who are satisfied with the current trajectory of the game, why would you ever change that trajectory? If you continue on the same trajectory, you put off more dissatisfied people and attract more satisfied people. That reinforces the development trend even more. Now, Paradox is full of smart people and, I suspect, after going public they have likely become a lot more savvy in their business.
To perhaps put OP's question in a slightly different way, what market trends does Paradox see that drives it to do what it does?
To begin with, I don't think Paradox actually falls for these logical fallacies because, let's face it, the people they have analyzing these sorts of things for the company have surely realized the same problems I and other forum posters have. I think they're smart enough to realize that they are in a niche market which, through making their games both deep and accessible from a UI and general QoL standpoint, they have effectively cornered. Though other markets are larger, like the FPS market, it doesn't make sense for Paradox to think of "bigger market=better". It has its brand, and that brand is worth something to a certain type of gamer. That kind of gamer likely does not play Fortnite on a daily basis.
In similar fashion, I think it is likely (though it is less likely than the above) that Paradox realizes the mistake of catering to those who only want to world conquest as their nation of choice. Focus trees are at their best when they involve tradeoffs and hard choices, not simple power-ups so you can throw blue turtle shells at the Soviets until they capitulate. Gameplay is at its best when you have to seriously engage with all the relevant mechanics to overcome the challenge associated with your chosen goal. I think the developers and the company people understand the dangers of catering too much to simplicity and map-painting, and even if they haven't truly understood them, they have been suitably chastened against that approach by the Imperator release.
So, to conclude this overly long post, I think Paradox sees two major trends:
1. Youtubers
2. Mods
Youtubers are a corporate executives' dream. Free publicity, free exposure, all targeted for free by Youtube's algorithms at gamers, your target audience. The problem is that Youtubers make their money based on mass viewing, and, as shown time and again by news agencies, TV shows, etc., if you want something to get a lot of attention, make it outlandish. Most people on Youtube, when choosing between "Watch me play HOI4 and conquer the world as the COMMUNIST United States!" and "Watch me play HOI4 but use the Northern Strategy as Japan!", will choose the former. The average person is not going to understand the significance or interest of the second thing, and even if they did, the first is still more outlandish. The business decision along these lines is clear: Give the Youtubers and their algorithm as much outlandish material as they can handle to boost your exposure. The problem with that approach is that it tends to bring in a certain type of gamer who, in addition to wanting the outlandish, wants it to come easy, but I've already covered that.
Mods pose a different, but more interesting question. They broaden the available experiences a gamer gets by purchasing your game. But, they also siphon off players from the base game,
and they may cause players to enjoy a type of game that is not what your developers want to make, or the players of the vanilla game want to be made. So what does a developer do when they realize, as with HOI4, that almost two thirds of their players use mods? Do they treat their game as something like a platform for mods, like Mount and Blade? Or, do they try to capture some of that audience by doing what mods do? Paradox has opted for the latter, I think. By broadening the availability of alternate history they are trying to capture some of the audience from Kaiserreich and other such mods.
I believe this is an error. In economic terms, Kaiserreich is better viewed as a complement rather than a substitute to a good WWII grand strategy game. The more of a WWII grand strategy game HOI4 becomes, the more this is apparent. As HOI4, however, becomes more of a "1930s-1940s sandbox", then KR becomes a substitute. By making HOI4 more like KR, rather than a distinct experience, I think Paradox is shooting itself in the foot.
In closing, HOI4 has certainly captured a decent market, but it is very unclear how much of that market is here for HOI4, and how much is here for HOI4's mods. It is also unclear how many of the 1 million who bought the game, but do not play it, would play the game if the devs had taken a different path. Ironically, that in itself is an alternate history analysis.