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they still interview with the lead designer, producers, and other designers

I know very little about these things but I always got the impression that the interviews were done by someone else not directly involved. So if that's true, I think it's a very good practice.

Any responsible one has a primary goal of making the best product possible, not employing as many friends as possible regardless of their abilities.

Yeah, but knowing people personally may bias your opinion ;p

But the point is not even that one. I was just saying that contacts come BEFORE everything else. Without contacts you get nothing. While WITH contacts you get many opportunities (that you may or may not waste).

Contacts = opportunities

You may "fail" an interview, but with many opportunities you can surely go closer to the goal.