QVprod wrote: ↑05 Aug 2022
Something to also keep in mind is higher expenses as well. RS is paying to have all those packs created. That wasn’t an expense they had before R+. That plus a bad R12 release. A loss doesn’t surprise me nor alarm me. Considering the amount of content marketing they do now. They’re probably in an okay (for now) place.
Yes, they can still be in an ok place on the overall balance sheet to weather seasonal high and lows and bounce back, and I don't think anyone here has suggested in they're trouble in the short term. But near-halving income in a year. In the 2013-2019 period it was a steady rise and decline as RE's grew then peaked.
But sample pack expenditure and some videos on Instagram? That's your takeaway from that chart to explain near-halving
revenue?
OK, take a moment: ask yourself, what does increased expenditure have to do with dropping $4m revenue despite claimed growth in the user base, including a major upgrade? They're mutually exclusive figures: If I sold a single copy of an RE and was paid £50 for it, but I'd paid someone £200,000 to make it, what's my revenue?
Well, it's still $50, isn't it? That's my income.
It doesn't matter that my profit in that scenario is -£199,950, because that's a different figure, applied after revenue (EBITDAFTW!). So in that hypothetical sense you can spend as much as you like, but your revenue is your total income and has nothing to do with expenditure you made to achieve it.
And in any event think about what you're suggesting for another beat: a few tens of thousands spent on sample packs isn't going to make but a light scratch in the non-stick surface of two million wooloogs, is it? If they were releasing one pack every day of the year, at say $50 a pop that's only going to be $18,250 a year. It's a drop in the ocean even on $6m revenues and is probably in the expenditure column as "Other" it's so insignificant (well, to them, it's a lot of money to most of us mortals
). The biggest outgoings are rents/taxes/wages/capital etc. (I don't know about Swedish rental prices, but if it's like elsewhere, those will be rising steadily. The easiest thing to cut is
always wages.)