Question

What specific costs would you consider fixed and variable in the gaming industry and why?

Answer 1

Assuming the costs relating to the gaming industry mentioned in question is the Video Gaming Industry.

The Specific costs associated are:

Fixed Costs:

• Rental expenses - With the advent of the internet, the rent expenses can be reduced by renting the video game development centers in cheaper areas. Since Internet helps the connectivity issues.

• Expenses related to general utilities

• Financial charges incurred on Fixed Mortgage Debts.
• Fixed Licensing - Some costs of licencing are based over period of time, hence fixed in nature.

Variable Costs:

• Employees - In gaming industry, employees labor turnover is high and the technical experts are often demanding for more perks. Thus, employee costs often vary usually.

• Cost of Products -Cost of copies produced and other associated costs increase in proportionate to the products.

• Licensing - Some costs of licencing are based on the number of copies produced/ sold, hence variable in nature.
• Promotion Costs - Promotion costs are never constant in the industry. It keeps varying as there is no single platform for the advertisements and no costs remain the same at any time.