Is that really true though? I remember when me and my engineering peers were in our teens, some of us dreamed of working for a gaming company, but now that we're older no one does. Most actually have a very negative perception of employment conditions in that industry.

The reason why there is a negative perception of employment conditions is because employment conditions are not very good, and they're not very good because a lot of people want to work in the industry.

Yes, but that demand isn't coming from everyone, it's coming from a certain demographic (young people that are into games). Having your pick from that demographic is far from having "choice pick" when it comes to the overall talent pool. And we haven't even talked about attrition.

I for one would prefer to avoid the gaming industry, but would not turn down the opportunity to work at Valve.

Game development is what gives the games industry a bad name. While valve is supposedly working on a few new games now[0] and updating 3 of their older games (tf2/dota 2/cs:go), it would be entirely possible to work exclusively on Steam (their online store) and never touch game code, especially with their rolling desks that literally roll so you move to whatever department you want, whenever you want.

[0]: https://www.youtube.com/watch?v=5fSt7BjJ29c

My perception is that Valve are the exception to that rule. They've got the money on tap from Steam, meaning their game development side is more of a hobby than anything else, giving a lot of freedom to the teams working on new games. I could believe it's a bit less rosy working on new hats for their Avatar Dressup games.

Actually Valve no longer make these "hats". Most of items that included in content updates are created by the community.