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GIVE GOLFBALLS MORE LIFE

• 9,041 Posts

  Tue, Sep 11 2012 7:50 AM

  TarheelsRule:

  I would be highly doubtful that WGT has made a profit in the years that they have been in business.

  If they haven't with even $30 million gross there needs to be a serious rethink.Within 3yrs they should have offset set-up costs,the overheads with so few empoyees are minimal,the products they sell are just programmes (no manufacture involved there) so 50-70% NET doesn't sound so far fetched to me..Andy

• Mesmorizer 614 Posts

  Tue, Sep 11 2012 9:34 AM

  I support more ball life for higher priced balls, period. I specifically use in most case the Cali's 250 credits a set because for the money the best value ball in my opion are the 180 Srixons, and 250 Calis. I love the Nikes, but at almost double the price of the Cali's and almost 3 times the amount of the Srixons the added stats just make them a ripoff. Now if the Nikes had say 35%+ more duribility then the two balls I have metioned then the added cost starts making more sense.

  That my 2 cents on the topic, longer life on ball would be great, especially when you hitting $5.00 a set lol.

  Mes,.

• andyson 6,415 Posts

  Tue, Sep 11 2012 10:05 AM

  gsoup:

  got a few of my friends to hit the pro shop with me this morning

  Oh.  Here I thought it was democrats going to the polls.

  gsoup:

  I smell beans as well

  Was the dog, not me.

• YankeeJim 25,827 Posts

  Tue, Sep 11 2012 10:08 AM

  andyson:

  gsoup:

  I smell beans as well

  Was the dog, not me.

  You saying SM's beans smell like what the dog does?   :-D

• andyson 6,415 Posts

  Tue, Sep 11 2012 11:42 AM

  TarheelsRule:

  The key from the Forbes article was WGT won't disclose revenue.  The 40 to 50 million of gross revenue (not income) was just a guess.

  But, since the article is from Forbes it has to be an educated guess.  Say the revenue estimate is off by a factor of 2,   then the number is $20 to $25M.

  From the Forbes article: "Cheng says WGT attracts 20 to 30 times as many players as EA’s Tiger Woods online game, which launched in April 2010. The average paying player forks over $30 a month."

  How many paying players are there?  10,000? 25,000? 50,000?  Lets say 25,000.  That would generate $9M annually.  Still not counting revenue from ads and sponsors like Nike, TM, Ping.  Probably not too far away from a $20M / year revenue number.

  With 40 employees, costs for new courses, and the managed IT costs their annual expenses are in the range of $5M to $8M.

  I think WGT's making a healthy profit.

• 3puttsSuk 361 Posts

  Tue, Sep 11 2012 11:47 AM

  Good thing we're not PGA professionals, swapping out balls every 3 to 5 holes.

• bearclaw27 553 Posts

  Tue, Sep 11 2012 12:11 PM

  andyson:

   

  With 40 employees, costs for new courses, and the managed IT costs their annual expenses are in the range of $5M to $8M.

  IMO, 40 seems like a very high number..My guess is more like 20..

  5 admins, 5 programmers, 5 sales people,  2 photographers, and 3 people in management..

   

• YankeeJim 25,827 Posts

  Tue, Sep 11 2012 12:14 PM

  You think there's only 5 programmers working on everything with one admin type each  to look over their shoulder and one each their own salesperson? That seems a little pricey to me, especially with 2 photo types sitting around waiting to go out on the next 2-3 week trip, something that now happens once a year.

  I envision it to be more like the old secretary pools with programmers instead of typists although tbe would probably maintain they're still typists. (Not taking issue with ya, Davey.)  :-)

• TarheelsRule 5,552 Posts

  Tue, Sep 11 2012 3:26 PM

  I don't know the true nature of WGT's finances, much the same as many of you.

  However I would think that a staff of 90 has to average well over $100k with benefits which gets you to $9 million right there.  

  The fees that are paid to allow WGT to put the courses on the site are unknown to each of us however we do know that the price at the most recent British Open was too high for WGT to pay.  I can honestly say that I have no feel for that number, since all of the courses in question are major courses I would assume that the licensing fee is pretty steep.

  The IT portion of their business can't be cheap, nor can the photos of each course that they put on the site.  None of us really know those either.

  My experience in the past before retirement was in the financial field, I still consult in it a little on the venture capital side.  One of two things is true on the bad side.  Either WGT is swimming in red ink with no prospects for a buy out or the investors have really deep pockets and believe in the product.

  Generally a start up like this will lose money for 5 years at least.  Probably 90% fail during that time.  The 10% that live on are probably 95% sold to bigger fish and the rest live on as a small fish or thrive and get to be a big fish.

  I have never seen a company like this live in BETA so long.  With the commitment that many of us have made in terms of clubs, balls, etc. a move out of BETA could result in a restart for everyone (although I think I read WGT said they would not do that), however if WGT sold itself to EA for example those who invested time and money could see what we have now swallowed up into TWO.  

  Anyway good to think about.  Maybe some good questions for Chad next time around although I doubt he will answer them.

• andyson 6,415 Posts

  Tue, Sep 11 2012 7:03 PM

  TarheelsRule:

  However I would think that a staff of 90 has to average well over $100k with benefits which gets you to $9 million right there.  

  The number of employees stated was 40 not 90.

  My estimate of $5M to $8M annual expenses included $100k/employee fully loaded, $600K for the 2 courses/yr, $1M for managed IT costs, and $200K misc (pizzas & beer)

  I still think they're way in the black ink.  Enough it appears for them to fund development of the MLB Baseball game.

  TarheelsRule:

  The fees that are paid to allow WGT to put the courses on the site are unknown to each of us however we do know that the price at the most recent British Open was too high for WGT to pay.

  How do you know that?  I don't remember Chad saying that in the chat.