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Videogames: Knowing What Really Sells

Many things about the videogame business have changed in the past decade. One very important thing hasn’t: Gamers still need to actually buy the games.

But tracking this important activity has become rather difficult, and not just because fewer games are being sold at retail stores. Most games these days have online functions that demand continual upgrades and, hence, bear costs for publishers. So accounting rules require some of the revenue generated from the sale of such games to be deferred over several months, and even more than a year in some cases.

Videogame publishers have gotten around this by reporting a form of adjusted revenue every quarter that includes the effect of...