Analysis of the financial stability of a gaming company

Analysis of the financial stability of a gaming company

Analysis of the financial stability of a gaming company February 5, 2021 11:37 am | Reasoning | Computer and mobile games

Approaching a detailed analysis of the analysis of the financial stability of a gaming company, or rather the disclosure of this topic, I would like to immediately note and say which brand of games we are dealing with, what niche it occupies in the market, in which area it occupies its position – it is thanks to the specifics that you can most accurately reveal the essence of the topic concerned. And already based on certain examples, make a consistent chain of conclusions, and then conclusions.

What factors influence development itself?

Let's say our company Tensent is taken into consideration. This is the “Mega Giant” campaign not only on its own (in China), but also on the global video game market as a whole. In addition to developing and supporting its mobile and computer games, this organization is also engaged in animation and other information services, that is, in fact, it is a monopolist that does not specialize in one sphere of services and goods.

On the financial side, this firm is in the black: revenues and profits are reflected in its financial statements for the quarter (s) on the positive side. Based on this, I want to dwell on video games and focus on them, since they mainly bring huge amounts of money to the campaign – the donation system is the most striking example of this ( games-services ). The success of this trend lies in the relevance of demand among young people, adults, children and the elasticity of their products.

For clarification: the computer code is rather complicated and at the same time it is so in demand, so there is nothing surprising in the fact that this product finds and feels good on the market. Especially with the timely occupation of a niche and the retention of the brand (image) in the future. If we talk about financial stability, then we can bring huge funding from investors. Money is always in circulation: it comes, and in the event of a crisis or other negative factor from the outside, the campaign can solve its problem in a fairly simple way – by redirecting funding to another channel, for example, to media content, if a situation with a different type of activity can worsen the overall situation campaigns. But at present (with the well-known situations in the world), the asset (s) contributed to the direction of gaming, only several times (200-300%) increased both the profit itself and the income for investors, and also strengthened its position in the market due to increasing your own capital.

Conclusion: Fin. The sustainability of an individual enterprise (campaign) depends on many factors, both internally and externally, the above serve as examples and arguments, but the main ones are such as external financing and position in the market for goods and services. (capital is not taken into account, since its size does not play a special role for finance. Sustainability, in my opinion, depends on the talents and skills of the campaign itself (managers, marketers, CEO directors), a lot depends, including reaching a new level … )

tencent holdings - Initial public offering

What difficulties can you face?

However, to a greater extent, we touched on the positive aspects, while the negative or potentially negative effects and factors were not considered to identify the overall picture (situation). For example, and to prove my words, I can cite the situation with adjusting my product to the world market (to the West). Since this product is specific, it requires localization, for its release in individual countries, it is also necessary to take into account the laws of a particular country, there is also a situation the other way around, when the circle of those interested and able to buy or use the product is much lower than what is desired and may be in the red if the costs associated with localization, marketing and registration of your trademark is much higher than the expected (projected) profit, and then the net proceeds for the enterprise. This is an indicator of financial stability, or rather its shift (potential) for the firm.

How can the state influence the development of the campaign?

If in the previous paragraph we touched upon such topics and words as states and countries, then this problem can be raised again and considered from a financial point of view. Let's say the potential risks that may arise from the policies of individual countries and their trade relations. We all understand perfectly well that the state has very powerful levers of influence, which are reflected in the economy as well. Sanctions, certain bans and restrictions have a negative impact on the securities market, on the development and competition of business in the market. It is primarily in the interest of the campaign to enter the world market, which is understandable, but this is followed by taking into account possible long-term or short-term risks. Trade relations between the US and China can serve as a living example , or rather blacklisting Huawei's campaign, thereby we can look for negative reflection for campaigns to a certain extent.

    - Player versus player


Summing up the general result, I want to present everything that has been said in a short and accessible form. The financial strength of a video game company is a constant indicator for a campaign, characterizing its potential potential, interest in it from the outside, the right balance of its talents and resources. It depends on the firm itself how this indicator will be reflected in the long term.