task 4 HA1

Financial planning is so important in the games industry considering that making profits and earning good money safely, will need to be thought about. Finacial planning will help cover these things. Financial planning is important when it comes to fixed cost. This is because the rent is fixed meaning that it wont change.

In this case The more games you sell the rent will stay the same and this means that there will be less of an effect on your net profits (the fixed cost will not affect the net profits which is a huge importance in the games industry) Financial planning is also very important when it comes to variable cost. This is because unlike the fixed cost which does'nt increase or decrease; the variable does. Consisting that it does change, this does effect the profit as tools they buy from another company to create a video game will effect the money hey have and the profit.

For example; the money would have to be paid for therefore intercepting the profit. E.g. a company sells technology gear in which Rockstar are interested in. The price the company offers to Rockstar increases from £500 to £600; meaning that Rockstar have to pay an increase of £100. Furthermore financial support is needed for ''break even points'' considering that money is included for a break even point to be announced e.g. if a game was on sale in stores and the fixed cost was £300 and in stores the owner of the game decided to put £1000 in sales the profit stands at 30%.

However. if the fixed cost was £500 and there was still £1000 in stores; then that would add up to a break even point as they have met halfway. e.g. £500 to £1000 Lastly, monitoring needs to be backed up from financial support as monitoring means to check the progress or quality over a project like a game, for example over a certain amount of time.

In this case, a video game may not be up to standard with graphics as the monitors have spotted; and so more money would then need to be spent as the improvements to the graphics could then be made (this is an example) Furthermore, as money would be getting spent at all different ranges and for more than one problem; financial support will support the certain issues.