3 ms·
Sure, they had a choice in which engine to use, but that's not the point. Your logic regarding sales figures and percentages is also missing context and is prob
by Two4 2y ago
Sure, they had a choice in which engine to use, but that's not the point. Your logic regarding sales figures and percentages is also missing context and is probably a bit too generous when it comes to how much money has been made.
The point here is that they started out with a certain set of terms: Unity wasn't a significant cost, nor was it ever expected to be, but now they've switched up the terms of the deal more or less unilaterally. This is not good business. No one wants an essential supplier or vendor to go out of business if they can't be easily replaced, and this can be leveraged in negotiations for terms that satisfy both parties, but dictating terms like this leaves a sour taste.
You also assume that every copy has sold for 40 dollars, but a huge chunk of sales will be from early on when pricing was low or during promotional pricing events. You also don't know how fat or thin the margins are, and using percentages of overall revenue doesn't reflect how much a change like this could be affecting their bottom line. If their margin is 10%, a rise in cost of 1% of overall revenue eats a tenth of their profits. If we use less liberal assumptions about their revenue, we might go as high as half their bottom line being taken out by a mandatory spend figure such as this.