Quoted from VividPsychosis:
Just spit balling here. but like I said, this really wouldnt be that hard, or that costly to someone with money. 40 games at 8500 is 340k. Dear investor, I will need the 1 mill to get going with all these parts to set up factory and restart. The game is already complete, just need to start making them again so the timeline will be fairly short. Also I will need 340k to produce the games purchased previously. Once back in production, you will take 75% of the margin from all future sales after normal operation costs until paid off for the original 340k, afterwords it will return to the normal split of 60/40 or w.e. as well as 49% control of the company. Cost of the games will be 12500, BOM is 6000k after costs of factory etc 8k per game. 4.5k remaining per unit sold.
done and done.
Missing from your math is how many games you need to sell to break even... plus the initial seed money. And they need more than 40 games built to make the EAs whole... 40 is just the next batch of games that didn't leave ARA initially.
In your numbers (to keep it simple).. 4.5k gross per game. They need to give away roughly 100 games to make the EAs whole right? (I forget how many prepaid EAs there are.. so use a round number)
100 games x 8k cost per game = 800k needed to make the EA games.
When selling and making 4.5k gross per title.. at 75% split... 3375 investor cut per game... leaving DP only 1125 per game sold to fund operations and the games to be built.
Or put another way... DP needs to sell 7 games to pay off ONE EA owed game.. and still is just net zero for DP. At 7: 1, they have to sell over 700 games to fund the EA builds... if you are even at spooky speed.. 10 games a week, that is a year and a half of building... plus the extra 10 weeks to build EA games.
Even after your initial seed money is paid off, you still only clear 2700 a game in your model.. meaning it still takes 3.5 games sold to pay off a EA game.
Now consider... how much capital you really need to build that many games. DP can't self fund the builds when it has to pay off the investor AND build EA games and doesn't have their own capital. So something has to give... They can't source parts in small batches.. they need big batches of like 100 or more.. That means capital investments of 850k or more are needed up front to build the next batch of 100 games. Someone has to front 850k, for upwards of several months.. and keep doing that. Because there is no money left to fund the next batch of games if you are paying off the investor and setting profits aside for EA games owed.
With your 75% split of 4500.. they need to sell 296 games for the investor to just break even on the initial 1 million seed money. But it will take nearly 2.55 million in capital to actually build that many games. And DP can't self fund the missing 1.5M dollars needed with just the 25% they are getting per game.
So you can see... 1 million may get them making some games.. but its not enough to actually pay off the investor, nor the EAs (or any other debts still owed to ARA and others). So you have to find the number of games that need to be sold, how quickly you can build them (to control your costs) and then... figure out if selling that many games at that price point is even market viable...
Here we are talking about selling over 700 games just to break even...
Even on this napkin math you can see how it's a hard sell to think it can work for the EAs as a whole.