Canada Simple Breakeven question?

[CaptAbacus]

Hi all

I'm sure I'm just overthinking this one and it's very simple in reality. I'm trying to work out a breakeven point but it's for an online gaming business. So while I can obviously split out my fixed costs. But revenue per UNIT and therefore variable costs per unit are a bit tougher as the revenues are derived from the stakes that are lost on the site. So do I take that revenue and divide by the number of active users in a period? Or something else?!

TIA!!!!

 

[CaptAbacus]

Apologies for the duplicate questions - it told me there was a server error so I tried again!

 

[DrStrangeLove]

Hi all

I'm sure I'm just overthinking this one and it's very simple in reality. I'm trying to work out a breakeven point but it's for an online gaming business. So while I can obviously split out my fixed costs. But revenue per UNIT and therefore variable costs per unit are a bit tougher as the revenues are derived from the stakes that are lost on the site. So do I take that revenue and divide by the number of active users in a period? Or something else?!

TIA!!!!

It sounds like you need to figure out the drivers that cause you to incur costs. Maybe it's active users, or maybe it's bets, or bets per hour. I'd be very surprised if your costs all have the same drivers. And since a given cost may have multiple drivers, there may not be "a unit" to divide by, though you might be able to find a combination of cost driver units that can serve your purpose.

 

[CaptAbacus]

Thanks Doc! Many of the variable costs are driven by the actual gaming revenue rather than active users or bets... perhaps average GGR per active user could be used. Either way it's not the easiest thing to calculate and any figure I think is going to be quite rough.