FairGames Cancelled (Studio will become a Support Studio).

[James Sawyer Ford]

It is literally a cost they accounted for. What difference does it make if they are accounting for a $750m impairment loss or a $200m game development budget?

It’s a loss of book value. The cost was incurred when they aquired the company. This is simply an accounting change on the balance sheet if they were to ever sell the company again (this is what they think they company and IP are worth)

Book value can also increase in the future (if one of their games takes off)

 

[Yrassinad]

It’s a loss of book value. The cost was incurred when they aquired the company. This is simply an accounting change on the balance sheet if they were to ever sell the company again (this is what they think they company and IP are worth)

Book value can also increase in the future (if one of their games takes off)

It's recorded as an operating expense, just like game development budgets and R&D. The only difference is that it's not a cash expense, but it's an expense nonetheless. And it also means that if they sell Bungie tomorrow for whatever they paid minus $750m, they don't have to incur that loss then and there since it's already accounted for. And yes, it can also go up again in the future and in that case they will likewise account for it on the positive side. They'd single it out as an impairment reversal and count it towards their income.

I really don't understand what you are arguing here. I cannot count the Bungie acquisition costs against the live service costs/gains, but I also can't count the impairment charge even though Sony themselves are? And yes if Bungie magically becomes worth $5bn because they knock it out of the park that should also be counted as $1bn in value that the life service push provided. But that's not what happened. All we have so far is Helldivers 2 being a success and generating about $1.5bn in revenues, and a bunch of flopped games + their biggest acquisition having lost so much value that they had to do an impairment charge which will easily amount to that same $1.5bn in expenses.

 

[Shmunter]

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