gamergirly
Member
Hcoregamer00 said:
What ever happened to that small movie division Nintendo was getting into?
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Sony, Nintendo, & MS videogame profitability numbers through June 30 2007
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What ever happened to that small movie division Nintendo was getting into?
cartoon_soldier
Member
Phife Dawg said:
Read the whole artcile.
Gamespot said:
MS doesn't have a gaming division as such, it has one division under which various Entertainment stuff falls into.
Mojovonio said:
Software. While the Xbox/Xbox 360 part has definitely been a drain financially, there has been some signs from MS that they intend to start making profit on it soon. But I guess we'll see.
BTW, those losses for MS are inflated. Home and Entertainment includes other products, other money losing products especially. I'm pretty sure the Zune and IPTV isn't doing wonders for that division either.
plagiarize
Banned
they don't need to... or to put it another way, lets pretend that next year microsoft make $10 million on the 360 and continue to make $10 mil each year. they'll never 'make back what they lost' but now they have something that is a source of revenue.Mojovonio said:
what you have to understand is that the loss of the 360 division was balanced out by profit in other divisions. they don't need to 'make it back'... just as sony won't need to make back what they lose this year if they continue to be in the profit over all.
cartoon_soldier
Member
Mojovonio said:
No, as Microsoft as Cash Reserves. That is bad for a corporation - to have cash reserves with nothing to do.
Also, Investor's unlike that idiot who wrote the original article, don't look at numbers over 5 years to see if something is going to work out or not. Its all about a long term plan, especially since MS is not a small business company but a full fledged corporate entity.
If things were as bad as what some people here would have you beleive, MS would be facing Shareholder revolts or something. Instead, they beat Wall Street's profit per share expectations in their last financial results.
Phife Dawg
Member
soco said:
The "division" in the second paragraph is refering to the entertainment and devices division.
Before that they are clearly referring to the gaming part of entertainment and devices devision. The wording is clear.
Microsoft was somewhat forced to enter the console business in the first place. They say the PS2 taking off and all their PC customers going elsewhere. They knew they had to enter the console market in order to stay relevant and branch out their business model beyond just the computer. I believe they stated that the Xbox would be profitable by 2008. Those profits would increase exponentially through 2011 or so, when MS must gear up for the Xbox Infinity. And this time around, the profits will increase, because MS owns the circuitry and they control the cost-reduction. Not to mention, they have tons of 3rd-party support this time around, and they now what they're doing now.
Sgt. Killjoy
Member
5 billion is chump change to MS.
good to know that nintendo is winning.
good to know that nintendo is winning.
cartoon_soldier
Member
Phife Dawg said:
For some reason it is proving difficult to find other news on this, but GS in that case has just worded their article badly.
Not that I am saying the sales of Xbox360 didn't contribute to the loss. They were making a loss on each 360 sold, so yeah for Fiscal Year ending 2006, they did make a loss on the 360.
Remember, Fiscal Year 2006 ends June 2006 for Microsoft.
Phife Dawg said:
apparently not to you. from the MS earnings report at Microsoft.com:
there's your 1.26 number there. it's not just gaming.
ComputerNerd
Banned
cartoon_soldier said:
The XBox has been a weight on Microsoft's share price. Investors don't like money going to waste. Especially large sums of money.
They'd rather have a large cash hoard given to the shareholders, than invested in a money-losing proposition.
trancejeremy
Banned
GavinGT said:
Or at least, keep Sony from taking over the living room, and possibly making the PC redundant. IMHO, MS's whole Xbox scheme was a way to make sure the PC stays relevent. I doubt Sony's plan of the PS3 being a "computer" had any huge chance of happening, but MS probably figured better to be safe than sorry. And if it happens, make sure they had a big chunk of the action as well as Sony.
andthebeatgoeson
Junior Member
soco said:
Do they still do that? Or have they done that recently. Besides OS, server software and online browser software, what was the most recent example of MS jumping into a new market, losing a lot of money on it, then eventually dominating?
DefectiveReject
Banned
so overall Nintendo took home $12bn more than MS?? (+$7bn and -$5bn)
WTF does Zune and IPTV have to do with anything? Honestly, why would they sell an mp3 player at a loss when they aren't a major vendor of music? IPTV also doesn't seem like a lossy proposition. What is lossy is throwing tons of advertising at a turd like Zune and then having it fail against the competition. But that's certainly not going to be the loss leader in that division. IMO (and it's just an opinion, so don't freak out), the losses stem in very large part to the games division. You sell hardware at a loss, spent continuous amounts on advertising and do r&d all the time. Software sales generate profit, but that's assuming certain things about license fees and who's making the games that are selling so well.
Considering MS stuffed the channels, that's a lot of unsold inventory (at a net loss of X dollars per unit) sitting on shelves. It's much the same argument I made for the PSP and PS2 back in the day. You can only sell so much before you start showing red. If you've made 3M units that aren't selling, and each one costs you almost as much as MSRP, then you're talking about hundreds of millions of dollars in missing revenue.
But I'll be honest and say that economics ain't my forte, and isn't really anything I think about a lot. So I might be spewing a whole load of misinformation due to my own ignorance. Take with a grain of salt. Don't skewer me for this. PEACE.
Considering MS stuffed the channels, that's a lot of unsold inventory (at a net loss of X dollars per unit) sitting on shelves. It's much the same argument I made for the PSP and PS2 back in the day. You can only sell so much before you start showing red. If you've made 3M units that aren't selling, and each one costs you almost as much as MSRP, then you're talking about hundreds of millions of dollars in missing revenue.
But I'll be honest and say that economics ain't my forte, and isn't really anything I think about a lot. So I might be spewing a whole load of misinformation due to my own ignorance. Take with a grain of salt. Don't skewer me for this. PEACE.
I don't know why the variation between these numbers and reports, but according to Next-gen, Sony's games division is expected to post a $1.7B loss for the fiscal year ending March '07.
http://www.next-gen.biz/index.php?option=com_content&task=view&id=5279&Itemid=2
EDIT: (Also reported by Reuters: http://www.usatoday.com/tech/gaming/2007-04-18-sony-jobs_N.htm)
I thought it was pretty shocking... it really makes me wonder how much Sony's sinking into PS3, because you've gotta believe the PS2 business is very profitable at this stage of the game (especially considering sales numbers)
http://www.next-gen.biz/index.php?option=com_content&task=view&id=5279&Itemid=2
EDIT: (Also reported by Reuters: http://www.usatoday.com/tech/gaming/2007-04-18-sony-jobs_N.htm)
I thought it was pretty shocking... it really makes me wonder how much Sony's sinking into PS3, because you've gotta believe the PS2 business is very profitable at this stage of the game (especially considering sales numbers)
KeithFranklin
Banned
skinnyrattler said:
That is a very simplified vision of how MS got where it is today. A great deal of MS success has been capitalizing on others mistakes. Some examples:
Apple should have killed the IBM PC with the Mac, but Apple was greedy and kept the Mac a closed system that was 3 times as expensive as the IBM PC clones.
Lotus and Wordperfect owned the spreadsheet and wordprocessor market, but when Windows 3.1 came around they still believed that the world wanted DOS based solutions. They thought a GUI would never really catch on in the business market. In the early 90's my CIO was just who they listened to. He said professionals use Lotus 123 and WordPerfect DOS. MS put out versions of Word and Excel that really took advantage of Windows 3.1 and Lotus and WordPerfect put out DOS applications with Windows menus.
Like wise Borland owned the desktop database market with Dbase III and Paradox. The first version of Dbase for Windows came out after Windows 95. Access had already won during the Windows 3.1 timeframe.
IBM never produced applications for OS2. OS2 and particularly OS2 Warp were so much better than Windows 3.1, but IBM didnt create business applications for OS2. Well not until they bought Lotus after the war had already been lost. Not to mention development tools for OS2 were a joke. You either used C++ or Rexx and they were super expensive.
Probably. Didn't one of the issues that cropped up with KK end up being that he hid a lot of problems from higher-ups? I guess when he suprised Stringer with the real truth it was like, "Here's a shit sandwich. It tastes great." :lol Price drop my ass. That would be a loss on top of PS2 and PSP profits. Pretty ridiculous IMO. PEACE.SickBoy said:
andthebeatgoeson
Junior Member
Good info. I wanted more recent examples. Since 2000. They got over on Netscape. But recent adventures have given MS trouble. Xbox and Zune. Yeah, it'll take time but if we just assume that the Xbox line has been a multi-billion loss, maybe around 5 billion, I don't think it took that much to get a foothold in their other business ventures. People parrot that MS always does this and it takes time. Well, that defense is usually a barrier to debate. How much time? How much money? Have they ever invested this much money to overtake a market? It's good that MS has the money because they offer competition. But I'm just wondering if this is different.KeithFranklin said:
Mojovonio said:
On one hand I would agree, on the other hand all the money they have spent and launching the Xbox 360 early put Sony into a reactionary position where it appears they weren't really ready and had to price it too high.
The funny part will be if Microsoft spent all this money on having high end hardware and an elaborate online service and the current trends prevail of people giving less and less of a shit about how "modern" their games are.
How was PlayStation ever more of a threat than what Google is doing? I've never understood the idea of worrying about a game system taking over PC's.
skinnyrattler said:
i honestly don't know enough about MS to be able to play your game with the exclusions. the only example that i personally know for sure is the embedded devices, specifically palm computers. its not the same as their OS division, although they still make an OS (though it's incredibly different than the desktop and server OSes).
with your exclusions though, have they ever really done it? i think a lot of the office software was purchased from other companies and redone under their name, but i guess it's probably the only example of that working. internet explorer is a prime example, but for some reason that's excluded (though i wouldn't have included it originally since i don't think it's profitable for MS and they consider it to be part of the OS now).
-ImaginaryInsider
Member
ComputerNerd said:
Investors realize that a company the size of Microsoft has to continually look at ways to expand and diversify itself, or risk becoming stagnant.
Do you really think it would have been smart of MS to let Sony put out a fully operational Linux OS on the PS2 unchallenged? Given the size of the PS1's userbase, would it have been good for MS to let the consumer get chummy with a non-Windows OS?
Obviously not, and the investors realized that.
Honestly, Xbox made sense for MS. It gave consumers a MS-option in the living-room, it puts pressure on Sony (and by default, Linux) which protects their real money-maker, Windows, and MS had plenty of console-friendly resources pretty much already in place through the Windows side of things.
Even with the loses of the Entertainment Division, MS as a company, makes back many times what they lose, and until that changes, investors will put up with "money-losing propositions".
-ImaginaryInsider said:
Yes! In retrospect it would have been really smart. By the time the original Xbox launched it was crystal clear that it was no threat to windows. Actually I'm 100% sure that the moded Xboxes ended up hurting Windows more then the Linux on PS2 and PS3 (not that those did hurt it a lot).
skinnyrattler said:
i don't think anyone know the answer to those questions. i don't believe they've ever spent this much money on a single division though. the only example i can think of would be the mobile and embedded division but i don't know the numbers.
there's so much more at risk here than just overtaking one market. MS realizes that the living room is the gateway to multliple markets and for bolstering the rest of their product line.
look at the way they're integrating. if we're already getting msn chat on the xbox, then we're probably also going to get hotmail mail notifications on our xbox. it probably then won't be long until we're reading hotmail, potentially with ads on our xbox. the other consoles already allow internet access with the browser, when MS does it, naturally they'll push msn as the default webpage. probably a lot of people will never bother to change it, and the ad income will likely increase.
look at the marketplace, and imagine microsoft doing microtransactions on applications. you can bet MS will try and bring this to the desktop, along with all of their downloadable movies and mail, which are potentially other huge areas for them, just as they've tried to tie it to Vista and MCE.
having access to the living room and other digital devices, also makes it easier to push digital content, that will likely be encoded in formats that MS profits from. plus they'll get money for each individual purchase/rental, and they can collect ad statistics for everything purchased and viewed. something MS is already trying to get into in other divisions.
it may seem like a lot of money, but there are a lot of people trying to battle it out for this position. i worked on a product for another CE company that was also trying to tap into this a bit. Apple and Sony are both trying for it, and if either of them get it, they're not gonna open it up easily to the other companies. this could be like investing in the CD was for Sony & PHilips and bringing back all of that money to them in the long term, except on a much larger scale. once someone has totally dominated that market, the chances of taking it back without potentially losing more money are slim. it's also got way more branches than just the single gaming market and i'm not sure it could even be compared with the other divisions or previous investments.
Particle Physicist
between a quark and a baryon
cartoon_soldier said:
zune and what else? the H & E division also houses several profitable projects.. thats why the xbox was placed there.. so they can somewhat mask its losses.
DarkMage619
$MSFT
I'm sorry I didn't read the whole thread so I don't know if this question has been asked already but where are the numbers for SONY when FIRST entered the games market?Sure if you start counting from 1998 things will look great but if you include the time when they were working for Nintendo, and the money they invested in the product once Nintnedo dropped them I think you will see a slightly different case.
All in all I don't think this comparison is a fair one seeing how it doesn't take everything in to account. Timing, market conditions, and competitor strength all determine how strong your market place presence will be. MS was going again TWO well financed and established competitors, OF COURSE they will not beat them in profits; at least not right away.
Something else to consider is no matter how well or poorly a product is doing that does not necessarily mean the company is in similar shape. We all know that MS outside of the Home and Entertainment division is doing fairly well. We also know that Sony's music, movie, and electrotics division also feed in to that companies health. Sure PS2 sold great, but are their entertainment and other non-videogame electroic divisions doing as well? Obviously Nintendo is a wild card seeing how everything they do does come from gaming however, how much of their profits were from Gamecube? I think that their handheld division played a MAJOR role is their posted profits.
The bottom line is that these numbers fail to tell the entire story and I doubt they will have a the final say on who will come out on top in the console battle. Enjoy/hate them accordingly.
The Dark One
All in all I don't think this comparison is a fair one seeing how it doesn't take everything in to account. Timing, market conditions, and competitor strength all determine how strong your market place presence will be. MS was going again TWO well financed and established competitors, OF COURSE they will not beat them in profits; at least not right away.
Something else to consider is no matter how well or poorly a product is doing that does not necessarily mean the company is in similar shape. We all know that MS outside of the Home and Entertainment division is doing fairly well. We also know that Sony's music, movie, and electrotics division also feed in to that companies health. Sure PS2 sold great, but are their entertainment and other non-videogame electroic divisions doing as well? Obviously Nintendo is a wild card seeing how everything they do does come from gaming however, how much of their profits were from Gamecube? I think that their handheld division played a MAJOR role is their posted profits.
The bottom line is that these numbers fail to tell the entire story and I doubt they will have a the final say on who will come out on top in the console battle. Enjoy/hate them accordingly.
The Dark One
DCharlie
And even i am moderately surprised
the worry is that if sony get burnt on the PS3, with someone like Stringer in charge from the off , he might demand tighter control on the financing of PS4/PSP2. He's obviously make lots of statements about exactly who carries the can for PS3 (i.e. : KK) and has had a few interviews where he's mentioned that KK is a maverick.
(also note - i think Stringer will ultimately boot Kutaragi out. Or Stringer has to go. I think it's one or the other at this point. Which will make the video games industry less colourful)
But yeah, with MS in the picture now, Sony are up against a company who can pretty much bleed indefinitely. It could get very very messy.
Regarding fears of MS buying out the industry - that was my pre-xbox launch fear. Hobson's choice is not a good choice. But it hasn't happened - and other than the odd flirt with some very big moves in the past - i don't see them bothering now. More likely they'll just be happy to pin down certain games.
cartoon_soldier
Member
DCharlie said:
I can already say Kutaragi won't be the frontman for their next PS project.
KeithFranklin
Banned
skinnyrattler said:
Well Windows itself was almost a 10 year investment before it was viable. PocketPcs and Windows based Smartphones just became profitable and MS online is still losing money.
Main reason for MS entering console space is considered to be defense. Defense of what?
Not their operating system. Linux is not a competitor to Windows.
But defense of delivering digital content home. That's were the money will be.
Isuppli said they are losing $200+ on each console. So yeah it's a big number but they gonna be ok. They are leaders in tv market now and with 65nm around the corner and BR-drive reaching mass-production they will cut ps3's cost soon.
This generation is much more ambitious for Sony than last one so yeah the lose more money at start.
Year+ ago it was much easier to analyze H & E division and xbox part of it. It contained things like pc games and pc peripherals that were profitable, so actual xbox losses were slightly bigger than what is posted. But now with Zune it's kinda more clouded.
I agree though -- how much money you can lose on freaking mp3-player? I just dont think you can lose gobs.
One note before results for this Q will be known. This time MS ain't droppin price for long long time and they offer HDDs and Elite version -- at almost unreasonable prices.
Not their operating system. Linux is not a competitor to Windows.
But defense of delivering digital content home. That's were the money will be.
SickBoy said:
Isuppli said they are losing $200+ on each console. So yeah it's a big number but they gonna be ok. They are leaders in tv market now and with 65nm around the corner and BR-drive reaching mass-production they will cut ps3's cost soon.
This generation is much more ambitious for Sony than last one so yeah the lose more money at start.
Pimpwerx said:
Year+ ago it was much easier to analyze H & E division and xbox part of it. It contained things like pc games and pc peripherals that were profitable, so actual xbox losses were slightly bigger than what is posted. But now with Zune it's kinda more clouded.
I agree though -- how much money you can lose on freaking mp3-player? I just dont think you can lose gobs.
One note before results for this Q will be known. This time MS ain't droppin price for long long time and they offer HDDs and Elite version -- at almost unreasonable prices.
-ImaginaryInsider
Member
Wiitard said:
Hindsight is 20-20.
I think it's hard to gauge what Sony would have done over the course of an entire Xbox-less last gen, let alone how that would have set up things for the PS3.
In the long-term, regardless of whether Sony/Linux ever becomes a real threat, with the way that the the living room/consoles/PC's/the internet/DLC are slowly converging together, and the kind of potential that has to control influence and make money, MS would be stupid not to try and get a piece of that pie sooner, rather than later.
PistolGrip
sex vacation in Guam
Wow no wonder Live isn't free. They could have just bought tons of Sony/Nintendo shares and spent much less.
Great numbers for Nintendo but I dont know how to feel about a them not willing to take a lost where games win and instead over charges for their consoles.
Do games for windows have to lincense MS? If not then MS will be purely losing in this front. MS has a tough long road ahead.
Great numbers for Nintendo but I dont know how to feel about a them not willing to take a lost where games win and instead over charges for their consoles.
Do games for windows have to lincense MS? If not then MS will be purely losing in this front. MS has a tough long road ahead.
TheProfessor said:
Why should any company take a loss to sell a product? The only benefit is a long term solution that makes up for it, in nintendo's case do you have solution for them to earn more income that they wouldn't take for hardware? If you believe they over charge for their products then your right as a consumer is not to buy it. BTW nice job on mentioning nintendo's greed for money, yet outright ignoring MS greed practicies in the PC realm their licenses deals are by far the biggest over charging I've seen in the last decade. Same could be said for their EULA that basically demands you pay for more copies of a product you already own.
-ImaginaryInsider
Member
legend166 said:
Uh, isn't the 360 closing in on having half of the original Xbox's 4 year userbase total in only about a year and 4 months? At this rate, I'd wouldn't be surprised to see the 360 hit at least 40 million+ before it's done.
Close to twice the original userbase, with a cost controlled console, and the added money that DLC/Live-Arcade brings, should be a pretty nice step up from Xbox 1.
legend166 said:
I'm starting to wonder if being the "dominant console" in terms of how many units are sold is what Microsoft and Sony really care about. I mean, Sony more or less decided that selling 100 million units and a billion units of software (even if it's a third party game there are royalties) wasn't good enough. It's like they're both trying to corner the excessive spender that will buy a system for $400 or more, pay $60 for games, pay more money for stuff that should have come with the game, and then buy other sorts of media or more games through an online service.
If 360 doesn't have a price drop by May which would be 18 months on the market (when PS2 had it's first price drop) than I don't think they're after every possible customer. PS3... I don't follow the company's inner politics but it seems like the game division has become an afterthought since Stringer took over and they're less willing to be competitive as they were in the past, so people like Harrison are left in awkward positions trying to explain decisions that are made well over his head. People keep mentioning Kutaragi but wasn't the PlayStation line Sony's one reliable source of income before the HD format war erupted? They seem more concerned with that now, and I guess they're winning, but that isn't necessarily the best thing for people who are concerned with games first.
Mojovonio said:
It's probably not even remotely accurate but that is what it looks like from the outside. The other funny thing with Sony is the number of developers that like the idea of providing content online (including one of their most recognizable producers) while they're trying to sell the system on having a larger capacity disc medium. The game division and the people making the hardware decisions don't seem like they're on the same page.
-ImaginaryInsider said:
6 billion however is not pocket change. So far it hurt Windows if anything. And all this stuff about breaking into the industry - we are kinda seeing how solid the positions of console manufacturers are. If you want to really leverage the console market you soon find out that you are building on sand. Kinda like Sony is finding out with the PS3.
JoshuaJSlone
Member
Heh.TheProfessor said:
Hypothetical Iwata said:
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