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Company News Taking Care of Business - Iron Tower Studio 2018 Business Diary

Vault Dweller

Commissar, Red Star Studio
Developer
Joined
Jan 7, 2003
Messages
27,926
Shadow Tactics is a very successful game that sold 400k copies in the first year.
But supposedly they almost went bankrupt and if you'll read their posts on Steam and on the gamasutra article they aren't satisfied with sales.
As Einstein discovered, it's all relative. For us 400k sales would have been a Christmas miracle and secured our future once and for all. For Obsidian it's a disappointment (Tyranny). For these guys it's a near bankruptcy event. Our overheads are low because we worked on pure enthusiasm while making AoD. These guys had an actual studio in Munich and employed 19 people. That's a lot of overhead. If they paid each person 50k a year, which is on the low side, that's almost a mil a year in salaries alone. Plus taxes, office, hardware, and other stuff. I wouldn't be surprised if it cost them 4-5 mil to develop it.

Even with a rather successful release, it's still really hard to reach the people out there – despite all those great reviews and press coverage we luckily had. So those are the things that still didn’t work out as intended
And yet they don't want to go lower than 50% to reach more customers.
Sure, they want to sell more - everyone does, but as long as the sale spikes dwarf day-to-day sales, they have no reason to increase the discount. When we were selling 3-4,000 copies a day, we wished we could sell 5-6,000, or god forbid 8-10,000, but we didn't increase the discount until these sale events started running dry.
 

Zanzoken

Arcane
Joined
Dec 16, 2014
Messages
2,970
Do you think people respond more to sale percentages or absolute price points?

E.g. "the game is 50% off" vs "the game is $15"

With the increased production values will you be setting TNW at a higher initial price?
 

Vault Dweller

Commissar, Red Star Studio
Developer
Joined
Jan 7, 2003
Messages
27,926
Both, I think. 50% off gets their attention (vs 10% off that nobody really cares about), but it's the actual price that seals the deal.

No, we won't go higher than $29.99. For an indie that's pretty high as it is.
 

YES!

Hi, I'm Roqua
Dumbfuck
Joined
Feb 26, 2017
Messages
2,088
Yes. They did a pretty good job and we'll definitely use their services in the future.

Did you use them pre or post release or both? How did you track their "good job." Was there an increased bump in traffic or a sales spike? Do you have an idea of what percent of traffic from general gamer sites translates into sales? Does steam track your game's page traffic (I also wonder if they track how many people have a game of yours on their wishlist)?

This is probably great information for small dev teams in doing a cost/benefit analysis on whether to get a marketer. What specific metrics do they gather? Is it hard information or just hoping the increased exposer to general gamers helps? I'm assuming you can at least track the percentage of increased sales after a general gamer article? What percentage of spikes in traffic to either ITS site or the steam page results in sales? Have you done an actual cost/benefit analysis or do you need have the metrics or data to conduct one? If steam tracks wishlist people for you, do general gamer site article traffic spikes translate to people wishlisting and future sales?

Also, would you recommend a marketer for a small dev team pre-release - and if so how early and are there any solid metrics a marketer can provide while a game is a year or two from release that translate into sales? Is the best time to spend money on a marketer during release, or during the first sales slump, when? Is it hard for you to get regional websites that cater to the general audience of your games to interview you, do you go to them, or do they come to you? It seems to me target market exposer would be much more valuable than general exposer, as your game isn't a console game with scantily clad children. Also, you provoke interest in the heavy pirating populations that are more likely to pay money for a game that checks all their boxes if the regional pricing is reasonable I'd guess.
 

Vault Dweller

Commissar, Red Star Studio
Developer
Joined
Jan 7, 2003
Messages
27,926
Did you use them pre or post release or both?
Two weeks prior.

How did you track their "good job." Was there an increased bump in traffic or a sales spike? Do you have an idea of what percent of traffic from general gamer sites translates into sales? Does steam track your game's page traffic (I also wonder if they track how many people have a game of yours on their wishlist)?
We didn't hire them to get traffic as that's not a very important factor. Yes, Steam tracks everything, the tools are fantastic.

Also, would you recommend a marketer for a small dev team pre-release - and if so how early and are there any solid metrics a marketer can provide while a game is a year or two from release that translate into sales? Is the best time to spend money on a marketer during release, or during the first sales slump, when? Is it hard for you to get regional websites that cater to the general audience of your games to interview you, do you go to them, or do they come to you? It seems to me target market exposer would be much more valuable than general exposer, as your game isn't a console game with scantily clad children. Also, you provoke interest in the heavy pirating populations that are more likely to pay money for a game that checks all their boxes if the regional pricing is reasonable I'd guess.
About marketing.

If one can't write a decent press-release or present a game in an interesting way, he/she needs someone who can do it. Same way if one can't handle talking to people, he/she needs a community "manager". If you can do all that on your own, all you need is media contacts. You can develop them too but it takes time (it's basically cold-calling, the worst aspect of a sales job), so you need someone who already has these contacts, ideally someone who worked with the media before and developed them naturally.

To give you an analogy, while doing interviews for the Codex I've slowly developed relationships with different developers. They don't owe me favors but they know me so if I email them something, they will read it because they know me now. That's what you need in a marketer - someone who knows people.

For example, when I was trying to get a certain magazine to take a look at our game, I emailed the editor 4-5 times, emailed another person I was in contact with before a few times, and this person told me that the best way to get your game reviewed is not talking to the editor but by ordering pizza for the entire review team (to give them a reason to give a fuck), even gave me a phone number of their favorite pizza place. Sales wise, it was a sound advice. No different than taking your prospective client for lunch a few times but I don't have time for this nonsense now. That's where marketing comes in.

From this perspective, hiring someone to help you 2 years before the release is a waste of time and money. When your game is done and you want to generate some awareness, that's when you do it.
 
Joined
Dec 12, 2013
Messages
3,894
For example, when I was trying to get a certain magazine to take a look at our game, I emailed the editor 4-5 times, emailed another person I was in contact with before a few times, and this person told me that the best way to get your game reviewed is not talking to the editor but by ordering pizza for the entire review team (to give them a reason to give a fuck), even gave me a phone number of their favorite pizza place. Sales wise, it was a sound advice. No different than taking your prospective client for lunch a few times but I don't have time for this nonsense now. That's where marketing comes in.

And did it work? And if yes did you start buying pizzas for all gaming magazines in the world?
 

Vault Dweller

Commissar, Red Star Studio
Developer
Joined
Jan 7, 2003
Messages
27,926
We hired a marketing firm instead.
 

Davaris

Australian Game Developers
Developer
Joined
Mar 7, 2005
Messages
6,453
Location
Idiocracy
Any marketing firm worth its salt knows pizzas are for amateurs.

image02.w710.h473.jpg
 

YES!

Hi, I'm Roqua
Dumbfuck
Joined
Feb 26, 2017
Messages
2,088
Did you use them pre or post release or both?
Two weeks prior.

How did you track their "good job." Was there an increased bump in traffic or a sales spike? Do you have an idea of what percent of traffic from general gamer sites translates into sales? Does steam track your game's page traffic (I also wonder if they track how many people have a game of yours on their wishlist)?
We didn't hire them to get traffic as that's not a very important factor. Yes, Steam tracks everything, the tools are fantastic.

Also, would you recommend a marketer for a small dev team pre-release - and if so how early and are there any solid metrics a marketer can provide while a game is a year or two from release that translate into sales? Is the best time to spend money on a marketer during release, or during the first sales slump, when? Is it hard for you to get regional websites that cater to the general audience of your games to interview you, do you go to them, or do they come to you? It seems to me target market exposer would be much more valuable than general exposer, as your game isn't a console game with scantily clad children. Also, you provoke interest in the heavy pirating populations that are more likely to pay money for a game that checks all their boxes if the regional pricing is reasonable I'd guess.
About marketing.

If one can't write a decent press-release or present a game in an interesting way, he/she needs someone who can do it. Same way if one can't handle talking to people, he/she needs a community "manager". If you can do all that on your own, all you need is media contacts. You can develop them too but it takes time (it's basically cold-calling, the worst aspect of a sales job), so you need someone who already has these contacts, ideally someone who worked with the media before and developed them naturally.

To give you an analogy, while doing interviews for the Codex I've slowly developed relationships with different developers. They don't owe me favors but they know me so if I email them something, they will read it because they know me now. That's what you need in a marketer - someone who knows people.

For example, when I was trying to get a certain magazine to take a look at our game, I emailed the editor 4-5 times, emailed another person I was in contact with before a few times, and this person told me that the best way to get your game reviewed is not talking to the editor but by ordering pizza for the entire review team (to give them a reason to give a fuck), even gave me a phone number of their favorite pizza place. Sales wise, it was a sound advice. No different than taking your prospective client for lunch a few times but I don't have time for this nonsense now. That's where marketing comes in.

From this perspective, hiring someone to help you 2 years before the release is a waste of time and money. When your game is done and you want to generate some awareness, that's when you do it.

And in the end how many people bought the game that otherwise wouldn't? How many reviewers reviewed the game post release that wouldn't have anyways? And who read it that hadn't heard of the game, is interested in AoD type rpgs, and only visits sites that review AoD type games for favors or because someone knew them, and then bought the game and didn't refund?

I hear about a bunch of shitty games through this site and rpgwatch. Almost always these games are big console games like whatever that new Czech game, some retarded kids game jrpg, or just pure hipster trash like Pyre or Darkest Dungeons. Awareness does not translate to sales, and even a sale doesn't result in money the ability to return products on steam.

Hipster successes like Undertale and Stardew Valley are out of your prevue and probably have more to do with watching people play it than anything of substance. Without a single datum, without solid metrics, you cannot do a cost/benefit analysis. You realistically have no idea if there was any return on the money you spent.

We didn't hire them to get traffic as that's not a very important factor.

That is the only important factor. What good is a review on a site that no one sees? What good are contacts if they don't result in exposure that is directly tied to traffic that is directly tied to increased sales? What good is an expense that can't be tied to a return (by actual values that can be used)? My advice is to treat a marketer like an investment instead of an expense. Don't invest to get reviews or articles, invest to increase sales and net a return that can be measured. I don't know much about the internet but I do know that there are these cookie things that track where you go, and tracking this shit is common and big money. There has to be smaller, science focused marketer that has tools to track data from reviews on various sites as well as get reviews on various sites. Putting your faith into science yields much better results than putting it into magic. Your comments on needing to schmooze prospective clients and paying for contacts are nice, and remind of the advice people used to always give me about how to succeed - network, network, network, and its not what you know but who you know. It always seemed to me to be better to work harder and know more, rather than make friends and hope some sort of magic event happens. Why pay for the ephemeral when you could pay for data that lasts forever and will help in all future decisions and models?
 

Vault Dweller

Commissar, Red Star Studio
Developer
Joined
Jan 7, 2003
Messages
27,926
I rarely check the refund data because... well, see for yourself. Each line is a different complaint.

Combat is impossible, if you can't even survive the first encounter after trying it multiple times then whats the point in even playing the game.

I have not expected this game to be that hard as it was said that it was like Divinity 2 and that I will be intrested in the product, it is way more difficult and more complex than I have it expected to be

I expected hard fights, but combat is WAY too rigged against the player. This is going with mercenary background + imperial legion and blacksmithing.

I can't progress in any way. It seems like every option is impossible.

Was not expecting this kinda difficulty, simply put...it's not for me :)

The game is far to complex to enjoy , I do like MMO based games but It takes 'Hardcore' to a new level, new help or guide lines and to be honest the game isnt what it says it is and I think it's terrible. I cant enjoy or even play the game but I did try.

Combat is difficult, and unforgiving

There is too much for me to understand.

I don't have enough free time to fully understand and enjoy this game.

I tried everything I could in the first area to see if I could make it work for me somehow, but it is unreasonably hard to the point where I experience no joy playing it in spite of my best efforts.

can't get past first battle

the game is incredibly difficult, to the point of being incompletable for me.

I didnt think you'd be force to fight people in this game, i chose a loremaster expecting to not have to fight people, but i have to and end up dying everytime i try to complete the main quest.

It is too punishing & requires multiple reloads which makes it not fun.

Too difficult. There is no difficulty setting; shame to even be on Steam.

The game is heavily unbalanced and if you dont start how they want, you die. Can't play how you want to. Silly.

wayyyy to much reading, the training itself is a tiresome drag, I can't imagine how the game itself plays.

i dont have the brainpower for this game

The game for me is too hard. I am not good at these types of RPGs. I am sorry.

Demo was promising and fun however after the demo the content difficulty skyrocketed making it near impossible to progress.

This game is really hard. Interested because I love games like Divinity Original Sin.

I'm literally a gung ho, head first, tanky warrior kind of player and this game just isn't for me. I can't really see myself beating it.

The devs specifically state that the game is very difficult and indeed it is. I gave it a try but it's not a game for me.

i dislike the graphics and i don't like the core game play as i feel there is no noticeable progression.

I find the game quite hard and there is a lot of text. The game is not entertaining to me and the system is too difficult for me.

It is a little too difficult when you die multiple times on the training fight...

I wish I could enjoy this game, I really do, but my temper is way too short for me to enjoy this game.

I want to like it but when the first real fight is next to impossible, it becomes a test of patience.
 
Last edited:

Kyl Von Kull

The Night Tripper
Patron
Joined
Jun 15, 2017
Messages
3,150
Location
Jamrock District
[Steve gets a Kidney but I don't even get a tag.]
nd in the end how many people bought the game that otherwise wouldn't? How many reviewers reviewed the game post release that wouldn't have anyways? And who read it that hadn't heard of the game, is interested in AoD type rpgs, and only visits sites that review AoD type games for favors or because someone knew them, and then bought the game and didn't refund?

There’s an old joke in marketing: “I know I could cut half of my advertising budget, but I don’t know which half!”
 

YES!

Hi, I'm Roqua
Dumbfuck
Joined
Feb 26, 2017
Messages
2,088
nd in the end how many people bought the game that otherwise wouldn't? How many reviewers reviewed the game post release that wouldn't have anyways? And who read it that hadn't heard of the game, is interested in AoD type rpgs, and only visits sites that review AoD type games for favors or because someone knew them, and then bought the game and didn't refund?

There’s an old joke in marketing: “I know I could cut half of my advertising budget, but I don’t know which half!”

I remember in the first business statistics class I took we had to go through the process of how to determine the effectiveness of coupons the old way before there were scanners and barcodes. Just because something is a pain doesn't mean there is no way to do it. Marketers and HR should join forces to see which are the most unprofessional guess-work driven non-business types. The only thing that gives me hope is the push from the actual professionals in either discipline to raise up the dregs with SHRM and other professional organizations that understand data driven decision making.

Your joke actually has a valid answer based on data.
 

YES!

Hi, I'm Roqua
Dumbfuck
Joined
Feb 26, 2017
Messages
2,088
I rarely check the refund data because

Have you ever received good input from this? I'm wondering because historically I have taken the time to explain why I refunded a product and it usually boils down to me explaining why their product was mislabeled as an rpg or my having a hissy fit over how savage their UI and controls where. Is there a chance a dev would read it and be like, "yeah, of course we have to add in rebindable keys! This isn't 1982 and we aren't filthy savage animals. We are human beings for crying out loud! Our control functionality is the like having ASCII graphics. He's right! Let's fix this STAT" Or are the like - "My control scheme is the best ever and there is no reason anyone would ever want to change it!" I've also returned games that were borderline but them including the "Check this out something retarded with the Steam controller picture" on their store page and promoting the uncivilized savageness of using a controller on a PC game caused me to refund. I just don't get it. Its like a hot dog stand advertising they have mustard, ketchup, and feces as toppings. Who the fuck would want to put feces on a hot dog? I honestly can't imagine why someone would do it or that they have a big enough population to cater to, especially considering all the normal people that will walk by their stand because they are advertising shit as a topping.
 

Kyl Von Kull

The Night Tripper
Patron
Joined
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Messages
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Location
Jamrock District
[Steve gets a Kidney but I don't even get a tag.]
nd in the end how many people bought the game that otherwise wouldn't? How many reviewers reviewed the game post release that wouldn't have anyways? And who read it that hadn't heard of the game, is interested in AoD type rpgs, and only visits sites that review AoD type games for favors or because someone knew them, and then bought the game and didn't refund?

There’s an old joke in marketing: “I know I could cut half of my advertising budget, but I don’t know which half!”

I remember in the first business statistics class I took we had to go through the process of how to determine the effectiveness of coupons the old way before there were scanners and barcodes. Just because something is a pain doesn't mean there is no way to do it. Marketers and HR should join forces to see which are the most unprofessional guess-work driven non-business types. The only thing that gives me hope is the push from the actual professionals in either discipline to raise up the dregs with SHRM and other professional organizations that understand data driven decision making.

Your joke actually has a valid answer based on data.

It’s an old joke. Before the internet, there were few good, cost-effective ways to track the value of advertising. Google and its ilk have made it easy to figure out what works and what doesn’t, which is why ad space has gotten substantially cheaper in the last fifteen odd years.

Promotions are a different story and tend to be much easier to assess (and AFAIK are not part of your advertising budget).

But some of your questions are still close to unanswerable. Who reviewed the game who otherwise wouldn’t because of the PR firm? That would be a great thing to know, but how do you find that out, especially when it’s your first game without a baseline? This is why marketing/PR is based partially on voodoo, because often voodoo is the best you can do. It worked for Reagan, or at least it seemed to, which is close enough for government work.

But sure, the automation of HR and marketing by SAAS firms will change things dramatically. Still, I always assumed HR’s main purpose was to act as an emotional punching bag so that people don’t blame management when they’re fired or passed over for a promotion. In that sense, they’re very good at what they do.
 

Vault Dweller

Commissar, Red Star Studio
Developer
Joined
Jan 7, 2003
Messages
27,926
It’s an old joke. Before the internet, there were few good, cost-effective ways to track the value of advertising. Google and its ilk have made it easy to figure out what works and what doesn’t, which is why ad space has gotten substantially cheaper in the last fifteen odd years.
It's not a joke. I worked in marketing for a long time and the simple truth is that you never know if your client's campaign is going to work. Two identical campaigns could bring very different results. A client can run the same campaign for a year, it can work great the first 4 months, do absolutely nothing for the next 6 months, then do fucking amazing for the remaining 2 months. Or it does nothing for the first 3 months, the client is seeing red and calls you every day, then the awareness reaches the critical mass and the 4th month is a smashing success. Does it mean that he should have advertised during that magical month and skipped the first three? No, of course not.

What everyone agrees on is that awareness is the most critical factor and you build awareness via repetition, aka effective frequency. Curiosity, recognition, decision. So when you're building this momentum, you never know if you're wasting money or not.

We didn't hire them to get traffic as that's not a very important factor.

That is the only important factor.
When you sell mainstream goods, sure. When you sell niche RPGs, it really isn't. We ran on ad on PC Gamer, got pretty good ratios and traffic, the only problem - no sales increase, like that traffic never happened. So awareness - pretty good, instant gratification - zero. Does it mean it was a wasted effort? Hard to say because most people don't buy stuff right away after visiting the store (physical or virtual) for the first time. They do come back though but that's harder to track.

What good is a review on a site that no one sees?
Is this what we were talking about? Getting reviews on no-traffic sites?

What good are contacts if they don't result in exposure that is directly tied to traffic that is directly tied to increased sales?
If it were so simple the marketing companies would have been charging an arm and a leg (or a big % of sales). Nobody who can print money just like that will do it for a modest fee because nobody is that stupid. If a marketer can boost your sales and get you $100k in sales guaranteed, he would ask for $25k.

What good is an expense that can't be tied to a return (by actual values that can be used)? My advice is to treat a marketer like an investment instead of an expense.
Respectfully, it's an advice of a person who has no idea how marketing works in real world. Nobody can guarantee you results. They sell awareness; it's easy to measure how many people you reached, but impossible to say what the long term effect was.

There has to be smaller, science focused marketer that has tools to track data from reviews on various sites as well as get reviews on various sites.
And he's fucking dying to work for two-bit indie companies that can barely pay for his dinner in his favorite restaurant.

Putting your faith into science yields much better results than putting it into magic. Your comments on needing to schmooze prospective clients and paying for contacts are nice, and remind of the advice people used to always give me about how to succeed - network, network, network, and its not what you know but who you know. It always seemed to me to be better to work harder and know more, rather than make friends and hope some sort of magic event happens. Why pay for the ephemeral when you could pay for data that lasts forever and will help in all future decisions and models?
Because you sell games on a giant, crowded bazaar called Steam and your stall is one of tens of thousands. If people can't see your stall, you don't exist, and even if some folks manage to stumble upon it, the odds they might actually buy your game are very low because there are hundreds of different things they might not like about it. They might like your design but hate the graphics, they might like TB but insist on having a party, they might like everything but hate fantasy or want heroic fantasy or hate the Roman thing, or like everything but insist on magic (like one of the guys from RPG Watch), etc, etc, etc.

What magic data can help you here?
 

YES!

Hi, I'm Roqua
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Messages
2,088
Who reviewed the game who otherwise wouldn’t because of the PR firm?

This answer to this is who cares? The only real question is what is the return? And instead of measuring who reviewed the game, it should measure how many sales, returns, wishlist-ings, etc, resulted from this specific investment? It can be tracked so there is no reason for any voodoo. I'm not internet savvy but there are numbers of people who read the article, clicked on a link to ITS or the steam page, etc.

And my issue with HR has to do much more with hiring than anything else. Historically, no matter where I work, they suck really bad and the person in charge is some smhuck that doesn't even have a graduate degree nor a degree with some sort of HR emphasis and has zero chance of passing the SHRM test. Their retarded policies are put in place by short-sighted nincompoops that do nothing helpful and do everything to hurt your chances of hiring the people you want and trying to throw sand in your well oiled machine at every inopportune chance. What a bunch of cocksuckers. I hate those fuckers.
 

YES!

Hi, I'm Roqua
Dumbfuck
Joined
Feb 26, 2017
Messages
2,088
Nobody can guarantee you results. They sell awareness

People can guarantee you data with their awareness.

I really thought you were in operations at the paper place. I really don't want to argue with marketing people nor HR people as they don't get it (or want to). I have the same issue with people in my own field - the ones that live in the short-sighted world of chasing trends. They literally don't care about dividends, and only stock prices matter, and only short term gains matter. I find it infuriating and just wrong headed, even though they laugh all the way to the bank. I am probably the most risk averse person when it comes to jobs and investing my own money.

I like my current job because there is no real marketing. We make products people only buy when they actually need it, and buy us only because we are cheaper, and the stores that buy from us are the ones that put it on sale or not for the overwhelming majority of all cases. Our "competitors" really aren't, and do all the advertising for us. My own bubble filled with science and no voodoo.
 

Mustawd

Arcane
Joined
Jan 10, 2015
Messages
12,685
And market is minor and used for awareness instead of manipulation in a lot of companies. In a lot of companies they are major and focus on magic and manipulation. And it works because people, especially for the younger markets, are stupid. It also works on the markets targeting old people but in a different way (more with services instead of products - such as investments or insurance)

Not sure what the point of this was.

I've never seen a sales team do a revenue forecast. That is a finance function as far as I am aware. But I've never worked in a commission driven sales market

Of course the finance professional creates the overall financial model. The inputs are derived in tandem with a variety of teams. Finance professionals don’t know what the expected sales numbers are. Why would they? The assumptions are provided by the sales team and them scrubbed if shit doesn’t make sense.

Sales sell and the actual finance professionals takes the hard data of 'what is' and uses that as a factor in predicting what 'will be.'

Umm no. For one it’s called forecasts for a reason. Past performance is not always an indication of future performance. The meme I always heard in grad school is that Accounting deals with the past and Finance deals with the future. Are there ways to use hostorical data to extrapolate to the future? Of course. You can run an ANOVA if you want, but even then you still need some idea of the context of your expected sales in order to plug in accurate inputs into the y = mx+b (and etc) formula.

Or it can be a lot more subjective. For example, at my old company the analysts would meet with the Sales VP, Operations VP, President of the Company, CEO to put together the topline revenue forecasts. Together they’d get an idea of what their big customers were going to be spending on in the coming quarter, feasibility in terms of delivery (they can order X units but if we can’t deliver, it just become deferred revenue and we can’t use it for the upcoming quarter).

Stuff like sales commisions worked similar but the analyst mostly met with the Sales VP for that. Of course they’d use toline revenue as a starting point and then msybe go more granular into different global regions and products (as each may have it own commission structure).

I honestly don't know what you are talking about or if you know what you are talking about. Marketing expense forecast? They work on budgets. Is it them spending all their budget every single fucking time? A forecast is a model to predict something. It takes zero effort to add up costs, and the forecast would be really accurate every time. That's like saying HR does turn-over forecasts. It makes no sense to call anything that can be done with simple math a forecast. Your marketing expense forecast is a budget request to be approved, modified, or denied. And it has nothing to do with the actual forecasts solid marketing professionals do in some companies, and is used as a weighted measure of the real forecasts done in finance that are discussed and used to make decisions at the big table.

For one, departments go under and over budget all the time. All the freaking time. Forecasts are usually tweaked month to month as well as quarter to quarter, and the smaller the delta from forecast to actual the better the analyst. I don’t know how many times I’d hear “what’s going on with XYZ department? We’re way overshooting forecast. Tell them to reel it the hell in cuz they’ve already burned thorugh half the budget and it’s only March”.

Also, you’re assuming there is just one model. Many times forecasts are disaggregated by region. Some larger companies will do a DCF on a per project basis. Something like an EA definitely has NPV analYsis on a region, departmental (think Bioware Montreal) or even project level (think game).

Finally, you’re again misunderstanding how much finance relies on inputs from various departments. How do you think these budgets are created in the first place? It’s a continual forecasting process that is tweaked and adjusted based on current performance. To think you can simply drop in historicals numbers and boom, you’re done is laughable. Let’s say I budget $1M for a game’s marketing at the beginning of the year. Let’s say this game is a military shooter where you get ti play as terrorists and kill Kwans. Somehow the plot gets leaked, press is all over it, and you decide to cancel the game. What happens to that marketing budget? Use it anyway? No of course not. You’d evaluate of other projects are in need of marketing funds. If not, then you can use it elsewhere.

I’m not sure why you think these finance professionals have crystal balls where they know everything ablut a company automatically. Of course you’d need input from different departments.
 
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Mustawd

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Anyway Roqua. This is all missing the point. The whole point I was trying to make is that there is some misconception that finance or accounting professionals are makng these decisions. Thry create the models, sure, but with coordination of the rest of the company, which includes sales, which theoretically are the closest people to the customers in the company. With all that, finance can spit out a number. Say NPV for example. If negative, then that means you’d be losing value on the endeavor. If positive, then you have a decison to make to see if it’s worth the effort or not. Other projects might be more worth more of your time and resources.

Anyway, if you want more details on how this all works I’d recommend you read up on Capital Budgeting.
 

YES!

Hi, I'm Roqua
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For example, at my old company the analysts would meet with the Sales VP, Operations VP, President of the Company, CEO to put together the topline revenue forecasts.

I don't understand this at all. I understand sales working with finance for finance to make forecasts - and by working with I mean providing information. And what would operations do in this meeting besides wait for it to be over? Everyone should know their max production, and if additional warehousing is needed that is just an expense. I wasn't around in a capacity to really understand how shit worked before just-in-time inventory, but I don't know what input Operations could add into a forecast. And what kind of analysts? Cost, budget, the general data analyst? What I guess could be called financial analysts at a manufacturer I've always seen with the title of finance specialists.

Finance started as a way to make money from debt. I've worked at places where payroll fell under us, or fell under HR. I worked at places with weird titles and weird groupings of general duties. But I've never worked at a place where anything with the word forecast in the title didn't come from finance.

What specifically is the type of analyst you are?
 

YES!

Hi, I'm Roqua
Dumbfuck
Joined
Feb 26, 2017
Messages
2,088
Anyway Roqua. This is all missing the point. The whole point I was trying to make is that there is some misconception that finance or accounting professionals are makng these decisions. Thry create the models, sure, but with coordination of the rest of the company, which includes sales, which theoretically are the closest people to the customers in the company. With all that, finance can spit out a number. Say NPV for example. If negative, then that means you’d be losing value on the endeavor. If positive, then you have a decison to make to see if it’s worth the effort or not. Other projects might be more worth more of your time and resources.

Anyway, if you want more details on how this all works I’d recommend you read up on Capital Budgeting.

Making what decisions? They make forecasts. And I made my last post before reading this one.

And we should go back to arguing about something we all agree on - like your shitty taste in rpgs.
 

Mustawd

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What specifically is the type of analyst you are?

FP&A.

And what would operations do in this meeting besides wait for it to be over? Everyone should know their max production, and if additional warehousing is needed that is just an expense.

This was an example. Obviously it depends on industry. However, I’m sure they’d know what the capacity is. How would the finance professional know?

Also, what if you just acquired a company? What if you are in the middle of spinning off a large component of your business? What if a large region of yours in Europe just went on strike? Many times this ends up in very fluid situations where information might change day to day. In addition, I used “meet” as an overall idea. Might be email. Might be a phone call. Might be a report. Might be all three. Analyst gets the report, something seems off, They send an email, still doesn’t answer their question, so they pick up the phone or schedule a meeting.

And yes, I’ve been in my fair share of meetings where I just waited for it to be over.
 

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