Serris said:
Starke said:
In a sense, yes, it was made for free. Rather than explain, I'll give an example:
You pay someone 10 bucks to build something you can sell for 20. When you're done, and you've sold it, you've profited 10 bucks, but you have 20. You already paid the guy.
It is a little more complex than that, but that's the general idea.
So, whatever expenses Activision paid in, that money's gone. This is new money, which they can use as capital any way they want, including, as damages by losing a major court case.
you've never had an economics course, have you?
Actually, I've had multiple economics courses, accounting courses and business courses. As I said, the reality is more complex.
Serris said:
the money they used to fund those initial 10 bucks didn't come from nowhere either.
That's a double negative.
Serris said:
that's money that came from a previous project.
This is accurate. The term you're looking for here is operating capital.
Serris said:
however, go all the way back, and there will come a time where there wasn't a previous project.
This is also accurate. Every company has to start somewhere.
Serris said:
so the money had to come from somewhere. now businesses don't usually lend money from the bank.
For beginning your post with an accusation of ignorance, this comment is staggeringly so. Many companies, like Activision, did, in fact get their first operating capital from bank loans in the 80s. They don't raise capital from them now, but, the fact remains they did.
Serris said:
they lend money from their investors (and in return gives them stocks). however, that's not charity on the investor's behalf.
For someone who claims to understand economics this is one of the most convoluted descriptions of how stocks work. The traditional, simple, and accurate description of stocks is: A company sells shares in their future profits to investors. The company doesn't (usually) care who owns it, once they have the money, they pay out dividends based on their profits. It is fairly rare for a company to turn around and buy on their own stocks (effectively what you're describing) unless they fear a hostile takeover. When an investor sells a stock, it tends to be to a third party.
Serris said:
when they sell something with profit, they pay everyone who worked on the project (everyone from programmer to manager), and then split the rest among the stockholders (when the stockholders get paid depends on company to company). this is called paying out dividend.
No. It's not. You're talking about two completely unrelated things. Paying your employees, which you are legally obligated to do. And paying dividends, which you're actually not required to do. In fact, some companies don't even pay out dividends on their common stocks (though this is highly unusual). Second, you will almost never make up the cost of a stock in dividends in the short term, if ever. A stock that cost you $10 to purchase may turn out a dividend of $0.30.
Serris said:
so yeah, even when a company gets over a billion dollars from a game, that doesn't mean they have 500 million lying around.
They probably don't. But, that doesn't mean they don't have assets that they can be forced to liquidate by a court ruling forcing them to cough up 500 million. Which they do. I don't know how large Activision's operating fund is, but honestly, they can afford a 500 million pay out. They might not be able to afford it and keep functioning, depending on what they have to liquidate, but they can afford it.