Within the industry financial
planning is extremely important because within the industry you need planning
to stay organized and enable the company to because financial better off ifs
it’s more organized if for say the company is not organized it will more than
likely suffer due to lack of organization this could also lead to becoming
bankrupted and it could lead to the company loosening money by making games
because they could have spent too much making the game and not making that much
back from the game so the companies need to organized to be financial stable
within their business.
The fixed costs would be cost in
which the business like rock star would set for themselves it is the cost in
which does not change with an increase or decrease in the amount of goods or
services produced. Fixed costs are expenses that have to be paid by a company,
independent of any business activity. It is one of the two components of the
total cost of a good or service, along with variable cost. The fixed cost
is
The variable costs of a games
business would be the cost in which they depend on as a company’s production
value this could be things like direct material costs or direct labour costs
necessary to complete a certain project. For example, a company may have
variable costs associated with the packaging of one of its products. As the
company moves more of this product, the costs for packaging will increase.
Conversely, when fewer of these products are sold the costs for packaging will
consequently decrease without variable cost a company would struggle to make
money because there production serviced would come to a hold so products would
not be reaching the shop floors and making money for the business.
A break even point is when in economics & business, specifically
cost accounting, the break-even point (BEP) is the point at which cost or
expenses and revenue are equal: there is no net loss or gain, and one has
"broken even." A profit or a loss has not been made, although opportunity
costs have been "paid," and capital has received the risk-adjusted,
expected return. It is shown graphically as the point where the total revenue
and total cost curves meet. In the linear case the break-even point is equal to
the fixed costs divided by the contribution margin per unit.
In the games industry monitoring is a
crucial part of the industry within the industry they use monitoring to monitor
there budget witch they need to do to see what there spending there money on
and to see if there making any profit or any losses within there company an
example of this would be rock star they had to monitor what they spend there
money on and weather or not they would either make there money back or make a
larger profit witch would allow them to get better technology and to make a
bigger and better game like GTA V or Red dead redemption. They would also
monitor there budget buy watching what they spend on DLC for games witch are
new or old and just need something to attract players on it.
