Follow the money


A short article about the speech of Bill Swartz on GDC:
Follow the Money.

I find the whole economical side of game-making very interesting. Unfortunately, I don’t understand the abbreviations on the slides. What is P&L? What are Cogs? What does Variable Dev mean?


P&L: Profits and Liabilities
COG: Cost of Goods (The cost to make the discs and boxes, etc.)
Variable Dev: ?

His slides show the cost of production being a set number, but the assumptions include “CD or DVD.” Did he discuss if there is any meaningful production cost difference between them?

Beginning Inventory

  • Purchases
  • End Inventory
    = COGS

Variable Development Costs?

It’s been a long time since I went to any accountancy lectures and I tried to avoid them then, but isn’t P&L Profit and Loss?

P&L = Profit & Loss Statement, which is similar to an income statement in its presentation of revenues less costs equals income.
Variable Dev = I think this referred to the wide range of factors which make up a developer’s contract, including their advance and later residuals/royalties.