4 ms·
Billion USD grocery chains operate on 2-3% margins just fine...
by foepys 3mo ago
Billion USD grocery chains operate on 2-3% margins just fine...
- tracker1 3mo agoYeah, because video games are as essential to the home as groceries.
- deleted 3mo ago[deleted]
- breezybottom 3mo agoGroceries are important, but the choice of store isn't.
- adithyareddy 3mo agoIf you're a grocery chain you know exactly how much an item costs and exactly how much you sell it for. You also simply order more or less stock of the item depending on how it's selling. If you're a video game company, you invest millions of dollars in a project up front, for years, and you don't know until after release whether you: - Make back all the money you spent plus a healthy profit on top. - Just break even, but you lost the opportunity cost of all the other things that money could have been spent on with better utility. - Your game flops and you wasted all the money you spent developing it. It's also highly uneven. Extremely likely that King (Candy Crush) and Mojang (Minecraft) are making a ton of money, and everything else is a money pit where you pour in millions of dollars and you don't even make your money back.
- breezybottom 3mo agoFood prices can change significantly depending on natural disasters, diseases, supply chain issues. There's more uncertainty than you acknowledge.
- rvba 3mo agoPeople have to eat. They dont need to play games, especially bad games. Or they play some indie game like Among Us and not some big studio expensive game.
- tracker1 3mo agoThe stores themselves aren't losing money if there's a natural disaster.. the farm does, the distributor likely does.. but not the store. The store just raises prices against future inventory pricing, often ahead of the inventory itself.
- jayGlow 3mo agofood demand is pretty inelastic their margins are low but they're fairly consistent. modern games can have budgets of a few hundred million dollars with absolutely no guarantee of sales. at those margins 1 failed triple ai have could wipe out several years of profits.
- MagicMoonlight 3mo ago[dead]
- deleted 3mo ago[deleted]
- peder 3mo agoEveryone in this thread thinking they know what's best for other people's money. They're getting below the rate of return of treasuries. That's abysmal.