costs? They don't own it, after all, the subscribers do.
I'm not sure if it's a viable business model either way ( I worry much more
about them getting subscribers in sizable numbers, not too many) but it
definitely doesn't seem like they could recoup coast by reselling hardware.
Jim Davis
_____
From: Won Lee [mailto:[EMAIL PROTECTED]
Sent: Tuesday, August 24, 2004 9:08 AM
To: CF-Community
Subject: RE: [gaming] Infinium Phantom Econmic viability analysis
At 17:28 8/23/2004 -0400, you wrote:
>Yes that was me misspelling the title.
>*smacks self*
>bad me..bad bad me..
>^_^
>
>The gist of what I got from the article, was that the upfront costs to
>manufacture the console, then sell it, is only just offset by the
>revenue from a one year subscription from someone.
Yes it does. Which is the real crime of the article. Although the article
doesn't come right out and state that this is a bad thing, the not to
subtle inference is this is a bad way to run a business. But that is not
the case. Many businesses will run in the red for the first couple of
years. This is especially true for tech-hardware companies as the COGS and
Inventory cost will outpace early revenue. One thing to remember, when you
are preparing a financial statement the money you spend on hardware doesn't
disappear. You purchased physical goods and at the very least your company
is worth the hardware it purchased. IF Infinium purchased 30 M worth of
hardware, theoretically it should be able to re-sell that hardware and
recoup back a portion of the money as well as take depreciation against the
hardware.
Roblimo should stick to writing crappy Linux editorials.
_____
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