Quote:
Originally Posted by Vevster
That's what I said (I think) about gross revenue
As for "the only time" etc...) please, expalin me what would be the difference between gross revenue and net revenue in your explication....
Gross revenue = price at which the game is sold to the retailer. In some countries, you sell them at retail price (minus VAT) and you emit a credit note for a rebate (the retailer margin) at the same time or after + other credit notes for returns, price protection (when the price of a product already sold to the retailer is lowered) etc...
In other countries, the original invoice is at the retail price (minus VAT) - retailer margin.
But in any case, that invoice could not take into account returns (they come later), price protection (they come later), back end rebates (when a -5 USD -for instance- sticker is applied to the product for a limited period of time ) or period end rebates (calculated on total volume done with retailer for instance):
all these are removed from gross revenue to make net revenues
Gross revenue = original invoice
- Credit notes (returns, BER etc...)
= Net revenues
Please look at EA & Ubi financial: they show only Net Revenues (which is the net they get from sales to retailers). I can guarantee you that they do have in their accounting the difference between gross revenue & net revenues. (That is if you finally admit the possibility that I do have some experience in that industry)
Again, I know quite well what net profit is, thanks.
Sorry put Forbes doesn't talk about net profit but about gross margin. You quoted the article, please check it.
Gross margin is defined clearly. I quoted the definition and it is also writtent in both Ubi & EA financials.
As I said several times I disagree with what Forbes write because:
- either the term "gross margin" is wrong in their article
- the % if they do talk about gross margin is wrong
Either case, they are wrong somewhere (it's just an article, some people, even from Forbes can make mistake)
As for the cash advance, many companies would not have survived without. If they do ask for these advance, there is a reason; if they could do it differently, they would.
I'm just saying that you have to take these advance in the calculation of revenue given to the dev (and frankly, in most articles, these are forgotten).
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O ffs, why do I have to finally admit you have experience in "the industry", whats your evidence for that? Guess what? I am in economics and your use of definitions is consistantly wrong.
Gross profit margin can be used to demonstrate the amount of $ the retailer or distributer takes from the sale (markup) vs the original purchasing price. So below is an example.
Also the % net profit has NOTHING to do with amount of copies sold or the copies cost when sold online vs retail. You are completely confusing yourself and I suggest you stop digging the hole about now... The % profit margin represents the net profit of sales for that product, for example if a game sells at $50 in retail, I might make only lets say $10 because $20 went to production and distribution costs and I sold the original game to the retailer at $30. Thats a 33% net profit margin for me and a 66% for the retailer. Basically your gross profit becomes closer to your end net profit, as on the steam sale your net and gross profit are the same, but the retail sale gross margin is lower because it requires a mark up for the retailer to make $. If on the other hand I sell a copy through steam at $50, and steam takes $10 on each $50 sale then that leaves me with a 80% gross profit margin due to the fact that there is no shipping or production costs that would not factor into gross but DO factor into net profit. As these factors no longer matter on steam my net profit more closely follows my gross profit which means the dev/pub gets more $.
Also the EA and Ubisoft financial statements cover a large range of things such as paying for adverts and salaries and everything else for many many games. Your analysis of the statements is not at all indicitive or even related to the argument of profit in retail vs digital distribution. Basically it would be like comparing a whole hedgefunds portfolio and then from there jumping to assumptions about individual stocks.