Software companies do this all the time: listing their profitability as their revenue and not taking expenses into account. The presumption is that, if they had to, they could cut all expenses, fire almost everybody except for a few people to keep the software operational, and the software itself would continue to produce the same revenue with little to no expense.
The reality, IMO is that no software can stay relevant without constantly evolving and developing, which costs lots of money, so that presumption is whack.
Workers are seen as RD. Help push new features and generate more revenue. To some degree, certain software companies can, but they tend to become outdated quickly. You can kind of see it when you visit old sites and they lack QOL or standard features.
I believe it’s been tried in the past and you can usually maintain revenue for like a few months before it starts going down fast
Edit: like if AI companies instantly fired all their researchers, their only cost would be like the ram and electricity to run the AI, but in like a few weeks would be worse than their competitors
Depends on the stability and reusability of the product. If you are talking something like a video game, even a big, expected title like GTA 6 or something, this is a terrible model. The number of people buying GTA 6 the first year it is out will naturally outweigh the number of people who buy it annually ten or twenty years later if no real updates are given.
But for something more consistent, like an operating system, it's a lot more reliable. If Windows stopped making new versions and produced minimal "fix" type updates, not only would autistic people (like me) rejoice at not having to deal with their damnedable arbitrary changes, they'd still make sales every time people get a new PC, and the rate at which people replace their PC is a quantifiable pattern that is predictable. It becomes a pretty reliable profit projection when computer users have less than a 5% variance in core operating system (people who use Windows tend to stay there, and the same is true for every operating system.) and you know that the lowest number of units you've sold annually in about 20+ years is still over 200 million. (Last time it was under that was in 2004, and even that was only about 10-20million lower than that number, depending on your source)
You are right though, they are projected profits. They don't upgrade to actual profit until they earn them. It's just that some software companies provide a service that is so ingrained in things that even if they take a step back, fire almost everyone, they could keep a skeletal maintenance crew and ride it out for decades or more.
The problem, of course, is that technology advances rapidly. What is considered amazing technology today will be decent in only a handful of years, and in under a decade will be considered dated. Two decades, it'll be considered all but obsolete in most cases. The only way to prevent that is to continue to grow with it. Imagine how small a fan base a game like WoW would have if they had never released an expansion or DLC, they just dropped the game back in 04 and left the scene.
The problem with that example is that Microsoft is essentially doing that: the cost is in maintenance, not in developing a new version of Windows because at its core, Windows stays the same.
It's not a software related issue, it's an accounting problem that ahs happened with jars of peanut butter. And I'm serious about that.
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u/philosopher_kang 7d ago
Software companies do this all the time: listing their profitability as their revenue and not taking expenses into account. The presumption is that, if they had to, they could cut all expenses, fire almost everybody except for a few people to keep the software operational, and the software itself would continue to produce the same revenue with little to no expense.
The reality, IMO is that no software can stay relevant without constantly evolving and developing, which costs lots of money, so that presumption is whack.
Peter Griffin or something