Shoplift something for a buck in a store and they wouldn't even waste time calling the cops. Steal a song valued at a buck and get fined more than you'll make in over a decade. Punishment fitting the crime? Uhh no.
Fixed, variable and overhead costs have nothing to do with absolute numbers. It's about the nature of the costs.
Overhead costs are portions of costs associated with the company as a whole which are assigned to a particular product (i.e. administration and general business costs).
Fixed costs are costs assigned to a particular product regardless of units produced (i.e. programmer salaries).
Variable costs are costs assigned incurred on a per unit basis (i.e. packaging & distribution).
Video games are mostly fixed costs and overhead costs, with a small variable component.
What? They have hardly any variable costs. Firstly they're all fixed in nature (or at least semifixed, like salaries) and secondly once a game ships they're sunk costs - no cost can be variable if it cannot be stopped due to already having been spent.
don't seem to understand that even if we don't all like some of these companies, there would be no games if they didn't exist. Unless we want everything to be PopCap and Facebook games, if we want AAA games to continue, these companies need to find a way to survive and yes, make money. If we don't support these companies at least sometimes, there's going to be nothing left to play.
That's assuming such a pie pre-exists ready to be consumed by the masses vs. simply created by a few large entities.
When you say "doing okay financially" it depends on who benefits.
Would you make the same argument if slaves were used for production?
If you measure an industry's health purely on profit you overlook ethical and moral implications. Example: Company X is making a huge profit and is very successful with investors, meanwhile a lot of the imported products are from cheap, forced, and abusive child labor.
I'm saying you can't base an entire industry due to a few successes. Also, it's not always about the money. A company can make millions but if they lay-off the entire development team (C&C 4) before a release date, that's not very encouraging. You have to balance this between the profits and the human factor. It's like saying the US economy is doing just fine because the oil industry is making billions.