We would like to get your feedback on the Profitability of Service Firms (vanilla version, not using any mods) in version 10.0.
Please vote in the poll and let us know how much it should be adjusted if you think the Profitability is too much or too little.
Feedback on the Profitability of Service Firms in version 10.0
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Stylesjl
- Community Contributor
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Re: Feedback on the Profitability of Service Firms in version 10.0
I have not tested this enough to make a definitive conclusion on profitability of the service firms in all cases but generally speaking I don't see anything overly wrong with the levels of profit you can make with them but this is hard to assess fairly for the following reasons:
- Profits can often be transferred to another firm, a competitors or your own (for example you could charge a fortune for tomatoes in which case your fast food and pizzerias will make huge paper loses but your tomato farm will make huge, actual gains to use a silly example). I have tried to minimise this in my testing by ensuring my farms/factories are producing close to the 'At Cost' level. This can get even more complicated if some of the Service firms suppliers are owed by rival companies.
- Opportunity Cost - are the service firms a good use of the land value given that busy areas (important for service firms) can cost a lot of money to buy?
- Do you combine service firms with other industries such as producing food items and selling them in supermarkets? Related industries can partially subsidise other industries (by sharing the same resources, customer traffic boosts as well as just subsiding losses in one industry with the profits of another, etc). This does not go against the design of the game (in fact, it is encouraged), but it does mean that the service firms have a bigger impact than what the profit/loss indicator alone displays.
- Multiple floors vs single floors. I did my testing on multi-floor mode but if you have only a single floor you should expect the fixed costs to be a much bigger portion of the service firm's costs and cut profit the figures below by about 2/3rds per firm,.
- Competition! Once other companies get in on the Service Industry action this will drive prices down.
Well anyway here are some experimental scenarios:
Scenario 1: Food and Fast Food in a no competition scenario
This one was generally easy as any scenario without competition goes. It is not as lucrative as other industries outside of food such as Electronics, Cars, etc but that's not really the right comparison metric.
I started with Food, selling it in Supermarkets and then moved on to Fast Food and once the profits rolled in I expanded into Pizza, Cake and Coffee.
Profit maximums per firm per month (highest training level, max quality, prepare units running at 100%, ingredients close to being At Cost, no competition):
Pizzeria - 300K to 350K
Fast Food Joint - 300K to 350K
Cake Shop - 350K to 400K
Coffee Shop - 350K to 400K
Compare this to a fully stacked Supermarket in a mall with sales units running at around 100%:
Around 600-700K.
I reckon that feels about right.
Profits could probably go higher if I tried optimising more but that seems reasonably about as high as they go.
Scenario 2: Food and Fast Food but now we have 'Moderate' price competition with AIs
Profit margins here seem reasonable as well, harder to get things going as the AI will try to undercut you. But one big advantage: You can buy ingredients from others and they don't seem to overcharge (profits seem reasonable when I look at their farms), they also don't pull the Internal Sale thing on you to cut off your access.
Overall many of the above profit figures could be halved (probably more on higher difficulties) due to the price competition. AI put up a fair fight from what I can see. I have the biggest chunk in this case since I put a lot of money into good quality Chocolate Cake but they are still no pushovers:
For some reason they won't fight as hard to get a slice of the Pizza industry (or Fast Food or Coffee), they all seem quite fixated on cake (might just be a coincidence):
But still not too out of the ordinary.
Scenario 3: Coffee start + 'Moderate' price competition with AIs
I started by building a Coffee, Sugar and Milk Farm, maxed out the training level to get high quality ingredients. Used R&D to make coffee high quality. Coffee seems to require the least complex supply chain so I went with this to check if I could avoid a 'Food Start'.
Set up Coffee Shops when coffee crop was ready (also an AI helpfully provided me Paper, otherwise timber and a factory to make paper would have been too expensive).
This turned out surprisingly good, was starting to make a few million in a few years as I put Coffee Shops everywhere I could. Plenty of competition jumped in of course but they can't beat my quality (except oddly enough, the market share for Americano, don't know why as the quality was the same as for all the other types):
Other observations/notes
Malls are great for traffic but even outside malls service firms still had a good profit.
The necessity index of Burger Buns and Burger Patties is set to 0%. That seems odd given that no other food items appear to have that set. I think that's a bug.
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All things considered, it can be tough to start in the service industry due to the low profit margins, which is why I typically build up in another industry first and then get into services (I used export firms to help me out with my surplus farm products in Scenario 2 and it kept me from bankruptcy until the R&D started producing good results). But it is possible to start with Services and make a healthy profit by producing some of your own supplies and getting other supplies from other companies (Paper in the case of Coffee or French Fries); then relentlessly focus on R&D for quality to give you the edge.
- Profits can often be transferred to another firm, a competitors or your own (for example you could charge a fortune for tomatoes in which case your fast food and pizzerias will make huge paper loses but your tomato farm will make huge, actual gains to use a silly example). I have tried to minimise this in my testing by ensuring my farms/factories are producing close to the 'At Cost' level. This can get even more complicated if some of the Service firms suppliers are owed by rival companies.
- Opportunity Cost - are the service firms a good use of the land value given that busy areas (important for service firms) can cost a lot of money to buy?
- Do you combine service firms with other industries such as producing food items and selling them in supermarkets? Related industries can partially subsidise other industries (by sharing the same resources, customer traffic boosts as well as just subsiding losses in one industry with the profits of another, etc). This does not go against the design of the game (in fact, it is encouraged), but it does mean that the service firms have a bigger impact than what the profit/loss indicator alone displays.
- Multiple floors vs single floors. I did my testing on multi-floor mode but if you have only a single floor you should expect the fixed costs to be a much bigger portion of the service firm's costs and cut profit the figures below by about 2/3rds per firm,.
- Competition! Once other companies get in on the Service Industry action this will drive prices down.
Well anyway here are some experimental scenarios:
Scenario 1: Food and Fast Food in a no competition scenario
This one was generally easy as any scenario without competition goes. It is not as lucrative as other industries outside of food such as Electronics, Cars, etc but that's not really the right comparison metric.
I started with Food, selling it in Supermarkets and then moved on to Fast Food and once the profits rolled in I expanded into Pizza, Cake and Coffee.
Profit maximums per firm per month (highest training level, max quality, prepare units running at 100%, ingredients close to being At Cost, no competition):
Pizzeria - 300K to 350K
Fast Food Joint - 300K to 350K
Cake Shop - 350K to 400K
Coffee Shop - 350K to 400K
Compare this to a fully stacked Supermarket in a mall with sales units running at around 100%:
Around 600-700K.
I reckon that feels about right.
Profits could probably go higher if I tried optimising more but that seems reasonably about as high as they go.
Scenario 2: Food and Fast Food but now we have 'Moderate' price competition with AIs
Profit margins here seem reasonable as well, harder to get things going as the AI will try to undercut you. But one big advantage: You can buy ingredients from others and they don't seem to overcharge (profits seem reasonable when I look at their farms), they also don't pull the Internal Sale thing on you to cut off your access.
Overall many of the above profit figures could be halved (probably more on higher difficulties) due to the price competition. AI put up a fair fight from what I can see. I have the biggest chunk in this case since I put a lot of money into good quality Chocolate Cake but they are still no pushovers:
- CompetChocCake.png (86.04 KiB) Viewed 65 times
- PizzaShare.png (93.63 KiB) Viewed 65 times
Scenario 3: Coffee start + 'Moderate' price competition with AIs
I started by building a Coffee, Sugar and Milk Farm, maxed out the training level to get high quality ingredients. Used R&D to make coffee high quality. Coffee seems to require the least complex supply chain so I went with this to check if I could avoid a 'Food Start'.
Set up Coffee Shops when coffee crop was ready (also an AI helpfully provided me Paper, otherwise timber and a factory to make paper would have been too expensive).
This turned out surprisingly good, was starting to make a few million in a few years as I put Coffee Shops everywhere I could. Plenty of competition jumped in of course but they can't beat my quality (except oddly enough, the market share for Americano, don't know why as the quality was the same as for all the other types):
- Americano.png (98.18 KiB) Viewed 65 times
- Cappuccino.png (112.49 KiB) Viewed 65 times
Malls are great for traffic but even outside malls service firms still had a good profit.
The necessity index of Burger Buns and Burger Patties is set to 0%. That seems odd given that no other food items appear to have that set. I think that's a bug.
--
All things considered, it can be tough to start in the service industry due to the low profit margins, which is why I typically build up in another industry first and then get into services (I used export firms to help me out with my surplus farm products in Scenario 2 and it kept me from bankruptcy until the R&D started producing good results). But it is possible to start with Services and make a healthy profit by producing some of your own supplies and getting other supplies from other companies (Paper in the case of Coffee or French Fries); then relentlessly focus on R&D for quality to give you the edge.
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David
- Community and Marketing Manager at Enlight
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Re: Feedback on the Profitability of Service Firms in version 10.0
Hi Stylesjl,
Thanks for the testing and pointing out the bug in the necessity indexes of burger buns and burger patties.
The dev team has fixed them and also adjusted the necessity indexes of a number of other products.
Please see this new post for details: viewtopic.php?t=9622
Please let us know if you think any of the changes are too much, or if you have any suggestions for any other changes to the necessity indexes.
Thanks for the testing and pointing out the bug in the necessity indexes of burger buns and burger patties.
The dev team has fixed them and also adjusted the necessity indexes of a number of other products.
Please see this new post for details: viewtopic.php?t=9622
Please let us know if you think any of the changes are too much, or if you have any suggestions for any other changes to the necessity indexes.