Going gold?

[Vevster]

Originally Posted by Heliocon

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.

Well I provided links for definition; have you? Do I have to belive you're in economics? Your confusion about gross margin, net profit and everything else doesn't help

Please provide your own definition of gross margin; nothing else, as it is the direct quote from the Forbes article; you know, the one you linked.

Originally Posted by Heliocon

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...

Guess who is confiused.
I didn't talk about net profit. You did.

Originally Posted by Heliocon

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 $20 because $20 went to production and distribution costs and I sold the original game to the retailer at $40. Thats a 50% profit margin for me and a 20% for the retailer. 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.

Yes, but did you note that Forbes talk about GROSS MARGIN not about net profit?
I have provided a definition for Gross margin, and linked 2 financials showing it, clearly as Net revenues (sales) - Cost of goods and showing that R&D is not included in that...Please look at those

In your example:
I sold the game to the retailer at 40$
Cost of goods (manufacturing etc...) is 10$ (believe me that would be one hell of a cost of goods. A DVD cost 2$ to make or less...

Gross margin = 30$
= 75% of revenues

From that you'll take out all the other operating expenses (Marketing, R&D, wages , overheads)
= Operating result

etc...
Please look at the financials I linked if you don't belive me
For EA Gross Profit = Gross Margin for Ubi

Net revenue .
Cost of goods sold .
Gross profit

Operating expenses:
Marketing and sales .
General and administrative
Research and development
Restructuring charges
Amortization of intangibles
Acquisition-related contingent consideration
Goodwill impairment
Certain abandoned acquisition-related costs
Acquired in-process technology
Total operating expenses

Originally Posted by Heliocon

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.

Everything you mention (adverts and salaries etc..) is not included in the Gross margin. Please look at the financials.

You keep talking about net profit when the quote is gross margin. If you are in economics and do not see the difference, please study harder.

Start with looking at the links I provided.


Some videos are out, finally better things to do than this