Control Game Sales Recognition Explained

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Digital Bros S.p.A has just released their first quarterly reports of the financial year. The reported covered all activities from July 2019. Digital Bros S.p.A, the company that is a partner of Remedy Entertainment Plc, announced that the company’s revenue for this financial year was €9.5M. The company also disclosed €17.7M of Control game sales recognition. Both of these reports are related to the financial that that ended in 30.6.2019 (it started in 1.7.2018).

When Remedy signed a publishing agreement with Digital Bros in 2017, the company disclosed that it will receive 45% of game sales net revenue. This income (that Remedy earns) is calculated when the game hits the market. Once it starts to sell, the publisher will deduct upfront specific costs. These costs include the manufacturing and distribution costs of physical game copies as well as marketing costs.

Still, revenue recognition between the two companies is not the same. Remedy reports are based on FAS while Digital Bros S.p.A reports are based on IFRS. The figures reported between these two companies are not comparable.

Source: https://europeangaming.eu/portal/latest-news/2019/11/18/58614/clarification-regarding-the-control-game-sales-revenue-recognition/

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