At the end of the day, of course yes, but who puts up the upfront money to get product out?
Initially the company producing the product, unless, as more often than not happens in IT and Technology, stuff is presold through distribution channels.
Do you understand that it takes money to create the product that the customer purchases that brings in the money to cover the price of making that product and hopefully some profit with it?
Most tech is sold on pre-order basis to massive resellers
Do you think a million Xbox's are zero cost to make and the customer purchase is all profit or something?
How flipping naive do you think I am? Development costs are absorbed by the company developing the product, a big chunk of the initial manufacturing costs are covered by preorders to resellers at the top of the distribution chain who will preorder an allocation of thouands if not millions of units and sell smaller allocations down the value chain. The smaller resellers which then go from big retail groups to their subsidiaries who may be retailers or wholesalers, the latter then sells the commodity to retailers who sell it to the public. At no point does the company producing the product pony up the production of 10m units and crosses their fingers. At least, that's not how long lived tech companies operate.
I wasn't suggesting that the customer doesn't matter, I didn't think it needed to spelled out. I mean, they are the source of return on investment, it is a bit of a big deal. However, when you're floating on an open exchange those investors can pull their money at any time and poof goes the company with no way to bring their product to the customer. Look at this currently hypothetical situation we are discussing right here in this thread.
Way back when David Braben privately financed Frontier's seed money, then subsequent games sales paid for the expnsion of the company. Later on he crowdfunded (kickstarter) a glut of money to develop Elite Dangerous, we were in the horizons season of Elite when he took on external investment from Tencent. As for the unit costs of Xboxes, lets stick to this company, way back when Frontier was a developer, and their various publishers took the gamble with the manufacturing of the physical pressed idsk retail versions of games. Once Frontier hit a critical mass, they became a self publisher. Now the market is shifting to diskless gaming, buy your game on steam/GOG/Epic/PS Store/X-Box Live Store and download it, very little unit costs, and certainly no physical inventory to manufacture and distribute up front.
When investors pull out of a publicly traded company, they do so by moving to sell their shares on the open market.
The investors are not withdrawing the money from the coffers of the company they were invested in, it is merely selling that portion of the company to someone else. Often the act of selling causes a downwards pressure on the price of the stock being sold. However, unless a company is burdened by large corporate debts it will never go bankrupt based on a shareprice collapse, as if it owes nothing, it's always going to be worth more than it's debts, even if the shares went down to 0.1p
However, a low share price, such as Frontier currently has, leaves them vulnerable to take over bids leveraging greenmail and other market tactics.
A year ago Frontier was a £1.26B company, to buy a controlling interest in that would have cost ~£750m - today that same controlling interest would cost ~£300m, yet the core assets haven't changed, it's still got the games workshop, jurassic park and F1 titles in the wings, andthose games are presumably a year closer to launch, so theoretically the company should be in a better position than it was a year ago and ergo worth more. However a corporate raider might see the three big IP franchise games as a snip at £300m, remember this only buys them enough shares to vote through their new plans at board meetings, not outright ownership of the company. They would do so with an eye to either polishing the company back up to higher stock prices and getting a lucrative exit, or to asset strip it and sell off the company's game franchises for more than the company's current market cap (£530m).
This scenario the company is in now is nothing to do with anything said on the forum, we didn't cause this. However, had they heeded what we had been saying, they would have made games more in line with our expectations, that would have performed better in the market place, leading to a scenario where the company didn't have to issue consecutive proffits warnings that precipitated share price implosions.