Market-to-Book Ratio and Creative Industries– Example of Polish Video Games Developers

Research purpose. There are many reasons for which a growing interest in research and analysis of video game developers is observed. First, it results from attractive high rates of return on investment in this sector. Second, video games developers, in the author’s opinion, constitute a good combination of business and culture which is a ground for development of creative industry. A capital-intensive process of production and the intangibility of video games cause a problem in valuation of developers. Market participants who value future cash flows are in conflict with a historical cost approach used in accounting. This leads to a question of whether the confrontation of these two extreme ways of valuation could be a valuable measure of unrecognised assets for the analysis of video games sector and, as a consequence, of creative industry. The aim of the study is to explore a possible role and use of market-to-book ratio for analysis of this sector