tahadar wrote:
so that should be about $15 million max. that gives EA a profit of $30 million. damn.
Wow, seems some people don't know the difference between Revenue and Profit. There are many, many other operating expenses that no one is taking into account here.
The #1 expense of just about any company is labor. Even though they paid Dice to make the game, EA still has it's own emplyees as well: marketing, designers, project managers, etc, etc. Then there are other operating costs such as building rent, utilities & advertising.
Those are all pretty much fixed costs - costs that remain the same no matter if you produce one unit of the game or 1 billion. Then there are the variable costs - the costs which are directly proportional to the number of units produced. Such as CD/DVD creation, packaging, shipping.
Lastly, there is the cost of the servers and bandwidth that they must maintain for account logins, rankings, etc. (not a true fixed or variable cost in my opinion)
So, if you can accurately determine those costs, then maybe you can determne the profit. Otherwise, you can't.
Last edited by Psycho (2006-06-03 10:24:47)