USD on an all time low - Loss of income for MA

[Castronian]

Come on guys, we know theres a global resession comming, we have to see what happens, and I wager that any downturn in global economics will not affect the EU world to much.

To many ppl will find it hard to live in the real-world for one.

[DRDoom]

Don't think it's that much of a loss for MA.

when they get US$ in that money will stay on a US$ bank account, same for SEK same for Euro.

They must have economy watchers and swap money between those bank accounts.

When someone deposited 1K Euro 2 years ago, he got about 10K ped for it. MA leaved the Euro's on the Euro bank account. Now this person wants to withdraw 10K ped MA pays out this person about 650 Euro. >> 350 Euro profit for MA.

Let's say someone today deposit 650 Euro, he gets about 10K ped for it. MA transfers the Euros to their US$ account and it will be about 1K US$.
Assume that within 2 year the Euro has a 1/1 with the US$ again and the person wants to withdraw 10K ped. MA can pay without making any loss the 1K euro.

Ofc. it takes careful analysis of the currency value evolution but fluctuating value's can be very profitable instead for MA. Especially since not everyone withdraw peds at the same time leave then plenty of elbow space for errors and unforeseen fluctuations.

Your assumption would be correct IF all incoming money would be converted to SEK, but I'm sure they aren't.

[Trancekille]

Everyday new depositers come and more and more players I think thay will not suffer 2 much.. woudent worry 2 much about MA Cash flow thay have plenty :P and u will be supriced 2 c when thay will get even more cash this year

[Garrett Scuba F]

MA may also be betting that in 09 Democrats in the US will take control and turn the economy around, so basiclly they are now buying the US dollar when it is low and later when it is high again they will be be rich


Buy low sell high thats how you make money!

[alh]

Heh.. so this discussion again?
This time it was only 2-3 days since the last thread about the exact same issue...

[Kosh]

Originally Posted by alh

Heh.. so this discussion again?
This time it was only 2-3 days since the last thread about the exact same issue...

Every second article in the financial media around the world is discussing this topic as well right now, so you would expect lively discussion about it in an RCE forum

Well my thoughts on this are, MA may get hurt by a global recession because entertainment expenditure is one of the first things people cut when the situation is tight.
The weakness of the dollar should not hurt them too badly if they use financial instruments to hedge their currency risk.

[AJack10600]

You guys should read MAs financial statements more carefully ... they already mentioned that they returns are lower due to FX... also all their expenses are in SEK... And I doubt that the Crytec engine has been paid in USD... as this is a German company... Companies of the size of MA don't hedge their USD income so easily, I tend to think not at all... MA has been investing quite heavily...

We haven't even seen the Q4 2007 statement yet but I have a tendency to think that the 2007 report will show that MA have pretty much used up their cash at hand...

Happy to be proven wrong

[aridash]

Originally Posted by AJack10600

Companies of the size of MA don't hedge their USD income so easily, I tend to think not at all

please elaborate, why not? they are certainly not too large, and as you can open a FX trading account for about $1k these days they are not too small either.

[Ancient]

It is simple then, they just need to sell a few more land areas or sell the deed's for some sort of new attraction

[cheeky monkey]

Originally Posted by Garrett Scuba F

MA may also be betting that in 09 Democrats in the US will take control and turn the economy around, so basiclly they are now buying the US dollar when it is low and later when it is high again they will be be rich


Buy low sell high thats how you make money!

News flash, the Dems control congress, so they are controling the economy at the moment. Well, actually Ben Bernancke has the most control (His term does not expire until 2010), but of the elected part of the US Government, only congress can spend money and modify the tax system. The president can only agree or veto the changes, but it all originates in congress.

As someone above posted, if MA had half a brain they would have hedged against a rising (or falling) dollar years ago. They will be little affected if they did hedge.