77 U.S. public companies · NYU Stern “Software (Entertainment)” · January 2026
Industry data: Damodaran, NYU Stern, January 2026 · sale multiple: BizBuySell, Q2 2026. An estimate, not an appraisal.
| Measure | Video Game Software | Typical industry | What it means |
|---|---|---|---|
| Gross margin | 66.5% | 36.9% | Revenue left after the direct cost of what is sold |
| EBITDA margin | 34.9% | 15.7% | Profit before interest, tax, depreciation and amortization |
| Operating margin | 33.9% | 12.1% | Profit from operations, before interest and tax |
| Net margin | 29.9% | 7.3% | Profit after every cost and tax |
| EV/EBITDA | 22.0× | 13.2× | Enterprise value ÷ EBITDA, profitable companies |
| EV/Sales | 9.1× | 2.6× | Enterprise value ÷ revenue |
| Cost of capital | 8.44% | 7.08% | Return investors require, debt and equity blended |
| SG&A ÷ revenue | 14.1% | — | Selling, general and administrative costs |
| Debt ÷ capital | 2.0% | — | Share of funding from debt, at market values |
| Beta (levered / total unlevered) | 1.03 / 4.35 | — | Market risk / all the risk an undiversified owner carries |
Source: Aswath Damodaran, NYU Stern, January 2026. Aggregates: total profit ÷ total revenue across the group, so large companies weigh more.
Across 77 U.S. public companies in the video game software industry, net profit is 29.9% of revenue, operating profit 33.9% and gross profit 66.5% (January 2026 data from NYU Stern). That gross margin ranks 8 of 94 industries.
The industry average is 34.9%, against 15.7% for the typical industry. A business above 34.9% keeps more of each sale than the listed companies in its field.
Listed companies in the video game software industry trade at 22.0× EBITDA and 9.1× revenue. Small private businesses sell for far less: U.S. small businesses averaged 2.7× seller’s discretionary earnings in Q2 2026 (BizBuySell).
A diversified investor would want about 8.4% on the whole business (the industry cost of capital). An owner with most of their wealth in it carries more risk: 3.95% + total beta 4.35 × 4.46% = 23.3%.