informa
/
2 MIN READ
Blogs

Losses in a Growing Market: Am I Missing Something Here?

Almost every quarter, most major publishers and developers seem to post losses for their company. Coming away with more questions than answers, I wonder why so many companies seem like they're performing badly.
    I'm not an accountant; I don't have an in-depth knowledge of posting profits, announcing losses, or the nuts and bolts of running a company. I will admit I have a naive, albeit common-place, view of how things operate in the marketplace: growth and profit is "good", losses and reductions are "bad".

    So when I see major game companies continually posting losses quarter after quarter, I am puzzled. I thought the industry was growing, moreso than other sectors in the market. But even with industry-wide growth, it seems quarterly success is measured by who failed the least.

    Perhaps I just don't understand how the market works, or how public companies grow. Perhaps there is no good or bad in the market- just the constant exchange of money. Or, maybe video game companies are exceptionally bad at handling money- something of an occupational hazard. This is a risky business, and sometimes games flop, which would account for losses.

    But it seems more often than not, articles have a headline of '[Major Game Company] posts losses albiet higher than expected sales of [Game Name]'. Is the cost of running a major publisher/developer too much? How can a major game ship millions of units and not turn a profit for those who made it? Where is the money going? Is this an industry-wide problem, or is it just a few major players that are standing out?

    As I said, Im no accountant, but I am a game developer, and its concerning to see constant losses in the industry I work in. I wish I had answers to these questions, at least a better understanding of how games translate into money for a major developer. Something tells me I'm not the only one- it seems most developers have a 'fun-first' mentality for making games. The idea that making a fun game comes first, and that pleasing the costumer is paramount. This is EA's well publicized theory of game development- make great games, and the money will come. But seeing as EA seems to be posting the most losses, how much credence is there to this theory?

    So I ask, whats the deal? The industry is growing, more people are playing video games than ever before. So why are so many losing money? Are they losing money at all, do I just have misconceptions on what posting losses is? 

Latest Jobs

Treyarch

Playa Vista, Los Angeles, CA, USA
2.03.23
Senior Physics Gameplay Engineer - Treyarch

High Moon Studios

Carlsbad, CA, USA
2.03.23
VFX Artist - High Moon Studios

Anne Arundel Community College

Arnold, MD, USA
1.30.23
Instructor/Assistant Professor, Game Art

Treyarch Vancouver

Vancouver, BC, Canada
2.02.23
Producer - Treyarch Vancouver
More Jobs   

CONNECT WITH US

Explore the
Subscribe to
Follow us

Game Developer Job Board

Game Developer Newsletter

@gamedevdotcom

Explore the

Game Developer Job Board

Browse open positions across the game industry or recruit new talent for your studio

Browse
Subscribe to

Game Developer Newsletter

Get daily Game Developer top stories every morning straight into your inbox

Subscribe
Follow us

@gamedevdotcom

Follow us @gamedevdotcom to stay up-to-date with the latest news & insider information about events & more