Pitch decks are optimistic by construction. That is their job. But the questions that decide whether a studio is a good bet — or a good employer — are answered in the financials, not the narrative. You do not need to be an accountant to read them. You need to know which five lines to look at and what a healthy version of each looks like.
1. Runway, not revenue
Start with the least glamorous number: how many months of cash the studio has at its current burn. Revenue is a story about the past; runway is the constraint on the future. A studio with an impressive top line and four months of cash is in a more dangerous position than a quieter one with eighteen. Ask directly: what is the monthly burn, what is the bank balance, and when does the next funding or milestone payment land?
Illustrative runway: cash remaining by month
Illustrative. A steady slope toward zero is the line to watch — and to fund before it steepens.
2. Revenue concentration
Next, ask where the money comes from. One title carrying ninety percent of revenue is a single point of failure. One client carrying most of a work-for-hire studio's income is the same risk in a different coat. Healthy studios have either diversification or a clear, credible plan to get there. Ask for revenue by title and by client, and be wary of an answer that stays vague.
A great year built on one game is a coin toss dressed as a track record.
3. The shape of the cost base
Games are mostly people. In most studios, salaries dominate costs, which means headcount decisions are the real financial strategy. Look at how spend splits between the team, marketing and everything else, and whether it matches the model. A live-service studio with almost no live-ops or user-acquisition budget is under-resourcing exactly the part that keeps the game earning — a point that follows directly from why live-service dominates revenue.
Illustrative cost split for a live-service studio (%)
Illustrative. People dominate; the marketing line tells you whether the game will be seen.
4. Gross margin per player, if it is a service
For a live game, one relationship matters above all: what an engaged player is worth over time versus what it cost to acquire them. If lifetime value comfortably clears acquisition cost, the machine works and scaling spend makes sense. If it does not, growth just burns money faster. Ask for the numbers behind that ratio, and for how they have moved over the last year — a stable or improving trend is worth more than a flattering snapshot.
5. The gap between bookings and recognised revenue
This one catches people out. In games with passes and virtual currency, cash can arrive long before it is formally recognised as revenue, or vice versa. A studio can look flush on bookings while recognised revenue lags, or look weak on recognised revenue while cash is healthy. You want to understand both, because they answer different questions: bookings tell you about demand now, recognised revenue about the accounting picture. A large, unexplained gap is a prompt for more questions, not a verdict.
Reading them together
No single line settles it. Runway without a revenue plan is just a countdown. Great margins with two months of cash are academic. The skill is holding all five at once and asking whether the story they tell agrees with the story in the deck. When it does, you have a studio that understands itself. When the numbers and the narrative diverge, that gap is the most important thing on the page.
For prospective hires the same lines apply, read slightly differently: runway is your job security, concentration is your bus factor, and the cost split tells you whether the team you are joining is actually resourced to do the work described in the interview. The wider market context — which models are winning, where funding is flowing — sits in our state-of-the-market briefing.
The examples above are illustrative, chosen to show what a healthy or worrying line looks like rather than to describe any real studio. Skelora Pro members get sourced studio profiles with these lines laid out and dated. But the method costs nothing to learn, and it will make every pitch you hear easier to weigh.