Re: party is pulling out
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"We have a substantial gaming business outside the US, one that is highly profitable and growing rapidly on one of the most technologically advanced platforms available. In the first half of 2006 our non-US business generated revenues of $150 million"
What a HUGE sigh of relief for them, considering their poker revenue alone was $859.1 million last year.
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I don't want to "cry wolf", but I wouldn't be surprised if Party goes under. A company can not lose 80% of its revenue without incurring massive losses.
Many people will mistakenly assume that since Party has lost 80% of its revenue that it will lose 80% of its bottomline juicy profits (IE..still be profitable). Nope...doesn't work that way. Many of their costs are "fixed costs" and these are very hard to cut.
I expect Party to incure heavy losses for at least a couple of years until they can get their expenses inline with their much reduced revenues.
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Compared to any other business, I would think there fixed costs are non-existant. Wouldn't there biggest expense be advertising? Wouldn't that be pretty easy to drop out of?
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