2 replies to this topic

[Roadbeer]

Having had to type this a few times in response to the "OMG, PGI made $5mil off the founders, DO THIS". posts, I'm going to put this up one last time so I can link it.

$5mil isn't a lot of money for a business like PGI, I be surprised if it was even enough for one year of operation. People seem to think that all that money just gets divided among the programmers and corporate officers and they're just laughing all the way to the bank.

The Realities of the Cost of Doing Business:

Businesses don't just magically exist, there are many recurring costs to keep it functioning. Some of these are.

Office space: Probably between $15k and $20k / month given the size of the company. I'm being conservative as Vancouver is a higher rent area and that cost is probably MUCH higher.

Electricity
Internet service: Your home DSL connection won't cut it we're talking a massive pipe, limited research puts this at over $16,000/month just for a single OC3 or TS3 connection, I'm sure they have multiples of this.
Water and Waste Management: May be included in the cost of office space, if so, increase the cost of rent about 15%
Payroll: I've seen a number thrown around that PGI has between 50-60 employees. I don't know if this figure is programmers or total employees. Let's assume that it's total employees. Looking at the average rates in Vancouver we'll look at the lowest paid employees (Receptionist / Custodial) at $40k / year and the programmers somewhere around $70k / year. Average that out, and assuming that they have more drones than skilled employees, we'll say that puts the cost per employee at $50k / year x 50 employees = $2.5mil. I used the figure of 50 employees assuming that they have some unpaid interns to flesh out to the 60 employee figure.
Liability and Asset Insurance
Legal Services
Server Maintenance
Workstation Maintenance
Payroll and Income Taxes: They are in Canada, so these rates are higher than in the U.S., unless you're in New York or California, then they're about the same.
Licencing Rights: Both the Mechwarrior IP and Cryengine software have to be paid for on a recurring basis.
Publisher Fees: IGP isn't backing PGI's play for altruistic reasons, they want their cut.
Advertising: Many can argue "What Advertising?", in this I would agree, but if nothing else, they still have to advertise employee postings.

This is just a thumbnail sketch, there are many other recurring costs associated with running a business on top of just basic consumables (ping pong balls, coffee filters, paper, pens, etc). This also doesn't cover asset costs like ping pong tables, furniture, servers, workstations, etc. that constantly require upkeep and replacement.

So see kids, while $5mil may seem like a lot for an individual, $5mil for a small/medium business doesn't go very far.

I'm not doing this to be a PGI apologist I'm just annoyed that people keep acting like that was a huge lump of money where a crapton of new employees could have been hired to fix (insert gripe here)

​We won't discuss the allegations that some of this went to MW:T because that has little to do with the costs of running a business.

Edited by Roadbeer, 20 October 2013 - 05:05 AM.

[SPencil]

Roadbeer, on 27 March 2013 - 08:39 AM, said:

"What Advertising?"

I knew there was a reason I screen-caped that.

Companies don't exist to make money, they exist to provide services and products. Making money is a happy benefit from doing so. I'm content with PGI's business model, they aren't screwing paying customers over with BS anti-consumer policies like EA or Ubisoft (DRM, anyone?). How many people bought the new SimCity and couldn't play it for the first few weeks because their servers were trash? How many people actually have a stable internet connection for that "always online" single player BS? I understand they're trying to lessen the impact that piracy has, but the way they're going about it they also hurt actual paying customers.

Hell, you don't even need to pay PGI to play their game and it isn't even piracy. I equate much of the noise on the forums to a high school cafeteria during lunch time: the sense of entitlement is about on par.

[Commissar Aku]

We are only upset because I paid 80$ for Phoenix with the promise that UI 2.0 would come with it. November 15th patch they said the December patch would include the start of Loyalty points and the first part of Community Warfare, only to be told that instead of even beginning to work on CW they are spending their time drawing gold plated mechs with no stats. They haven't even started programming CW, and to put icing on the cake we have the old UI and it barely works, they have screen shots of UI 2.0 and it can't have more bugs than the original. The phoenix package hasn't even been fully released to those who bought it and they come out with a money grab? This is PGI however, and it isn't like they have ever made a successful game ever, my hope is though it will no longer be free to play some one else take the reins on this one.