Going gold?

[Vevster]

Originally Posted by Heliocon

Wrong - gross revenue is the profit from the number of units sold to a retailer, the chunk a retailer takes is not factored into gross revenue/returns because the retailer marks up the price from the original sales price (say the publisher/dev sells the game for $45 to the retailer that sells it for $60. The $45 is the gross revenue/profit). Therefore this is purely a mechanism of units sold x unit price. The only time you would remove revenue from this is if you were calculating that the revenue would go to more than 1 source (publisher and dev for example).

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)

Originally Posted by Heliocon

Net profit takes into account all the associated fees with manufacturing, shipping, loans/interest etc and gives you the end profit all things being equal (all factors accounted for). *

What steam is giving is a higher net profit - not gross (although it is also higher because more copies are moved). So since there is less overhead and steam takes a much lower chunk then a publisher usually does there is MUCH higher net profit (30% vs 70%+).

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).