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[Parl]

Let's say you ran a company. The company sells apples and oranges. Your apples division makes a trillion dollars a year. Your oranges division loses ten billion dollars a year. If it looks like your oranges division is never going to become profitable, or at least not for a really really long time, do you keep it open and let it sap money off the apples division? Of course not!

But what if your oranges exist to battle with enemy oranges because the enemy oranges are designed to attack your apples and your apples are very important to you, so you need to stop the enemy oranges from taking over your living room whilst your apples fight other Apples!

 

[Zerostatic]

xbox -- 25M in 4 years.

x360 -- 10m in 15 month. But at much higher price. And i believe they are going to sell x360 for 6-7 years at least. So 2x xbox or 50M looks realistic. Definitely potential to make money on x360.

I would bet a great deal of money that the 360 does NOT reach 50 Million, heck I doubt it reaches 40 million. Remember the system has basically zero presence in Japan, and is doing just "ok" in the PAL territory. It's only doing well in the US, and even in the US the pace of the sales is not really fast. Don't forget also that though the 360 has only been out 15 months it has already gone through 2 holiday seasons, and the last holiday season they were not supply constrained while their two major competitors were. The 360's installed base, given a 5 year life-cycle, in my estimation will be in the mid to high 30 millions. They will be 3rd when it's all said.

 

[tanod]

Is there a reason why the data doesn't go back to 1995-96 with the launch of the PS1 and N64? Did Sony not have a Gaming division at the time? I know we can get Nintendo data.

 

[bycha]

Is there a reason why the data doesn't go back to 1995-96 with the launch of the PS1 and N64? Did Sony not have a Gaming division at the time? I know we can get Nintendo data.

Well, I don't have that data and can't find it. Online earnings releases don't go that far. If you can find it it'll be fun.

The thing i don't understand is why should i be bothered in the least about the fact that MS(Or Sony) is losing money on the games division?

It really doesn't affect me in the least.

It gives you a little bit of insight about what companies going to do. Like go 3rd party -- Sega. Or rip you off with $180 hard drive. Or not make that pricecut this autumn etc.
But mostly it's for fun )

The $1.489B is the most any first party manufacturer has ever made in a single year in the history of the industry. And I'm rather certain that $2B is the most any first party manufacturer has ever lost in a single year in the history of the industry. And that's the sort of bleeding that will be REALLY hard to stop.

Well it's just a guess, but I think they can do that. How? Stop production ) They have a couple of millions in the channel right now, so they don't have to manufacture and ship next quarter. Of course it's not easy like that but you get the point.
Also i think they are going to cut production costs of PS3 DRAMATICALLY this summer.

Mass production + $7 blue-ray diods in June + 65nm this summer + cheaper RSX HAVE to stop that bleeding. Also they will ship much more software. Also they have profitable evergreen PS2 business. Production cost may be cut so much that they might be able to even make that pricecut before christmas. Overall i think their christmas quarter will be profitable.


Ok. Here's another thing. I think Nintendo will be the biggest publisher in the world next FY.

Last year they did great with software -- i will give wild and rough estimate:

NDS
123M shipped
Looking at the charts i think 70% of this was made by nintendo

123*0.7* lets say $20= $1700 M revenue

That's a cash machine baby.

GBA, GC -- I think around 25% of software was made by nintendo
GBA 38M shipped
38*0.25* $15 = $142.5 M revenue

GC 16M shipped
16*0.25* $20 = $80 M revenue

Wii 28M shipped. Zelda, Sports (Japan) wario and play etc put it to let's say 8M.

8*$37.5= 300M revenue

Total == $2.2 B in revenue.

EA's result is around $3B for last couple of years.

Next year with Wii and DS madness Nintendo will beat EA.

Ok i know all of it is wild guess so criticism is welcome.

 

[Pope Benedict XVI]

(-409,000,000 ps2 launch?) + 623,000,000 + 939,000,000 + 650,000,000 + 404,000,000 + 75,000,00 + (-1,969,000,000) =

Spoiler

313,000,000 for the last 7 years profit

wow, that justs seems so perverse to me. Sony have been phenomenally successful in the gaming industry for those seven years, and they have less than one third of a billion dollars profit to show for it?

 

[thefro]

IIRC Iwata say, in some interview, there is only "3000 nintendo employeers" around the world. So what is doing nintendo with all that money

 

[Miniboss1232]

wow, that justs seems so perverse to me. Sony have been phenomenally successful in the gaming industry for those seven years, and they have less than one third of a billion dollars profit to show for it?

So... PS3 wiped out years of profitability. Amazing.

 

[psy18]

wow, that justs seems so perverse to me. Sony have been phenomenally successful in the gaming industry for those seven years, and they have less than one third of a billion dollars profit to show for it?

Actually, it depends on what you want to see.
Leaving PS3 out of the picture, PS2's success was quite phenomenal.
And don't forget PS1.

 

[Dascu]

Well it's just a guess, but I think they can do that. How? Stop production ) They have a couple of millions in the channel right now, so they don't have to manufacture and ship next quarter. Of course it's not easy like that but you get the point.
Also i think they are going to cut production costs of PS3 DRAMATICALLY this summer.

And what will they do with those who're employed at their PS3 manufacturing factories? Fire them? Tell them to come back once the current stock is sold out?

 

[bycha]

2007 nearly single-handedly wiped out all profits from the previous four years combined. That's amazingly bad.

wow, that justs seems so perverse to me. Sony have been phenomenally successful in the gaming industry for those seven years, and they have less than one third of a billion dollars profit to show for it?

Well it's a little bit more complicated.

If memory serves me right PS2 was 2 billion investment for Sony. Obviously it payed off. See that losses in 2001? They are less thanks to PSone profits.

2001 -409,000,000
2002 623,000,000
2003 939,000,000
2004 650,000,000
2005 404,000,000
2006 75,000,00

Now look how profits fall from 2003. Without PS3 project Sony would have more than a BILLION in profits every year. That's how successful PS2 was.
From 2004 you can see constant decrease in profits -- that's an R&D investment into PS3 and it's technology namely Cell and Blu-ray. Kutaragi even used electronics division resources for it.
Heavy, heavy investments into PS3. The true cost of it and it's technology is almost beyond imagination. That's why Ken lost his job. Is it going to pay off? We'll see. It will be interesting to see for example how Cell will be used in electronics.

Overall Sony is one of the most ambitious companies of 21th century. They had opportunity to play it SAFE. Easily. With huge profits. But they chose other way.

 

[bycha]

And what will they do with those who're employed at their PS3 manufacturing factories? Fire them? Tell them to come back once the current stock is sold out?

That's why i said it's not that easy. Of course you still have to pay that contracts. But you don't lose money on components -- that's were most money are, labor -- not so much.

Sony and MS business strategy in videogames is "platform" model. They build platforms that 3rd parties make software for. And their production and shipping changes DRAMATICALLY from quarter to quarter. Like that 0.5M x360s that were shipped by MS WORLDWIDE in the last quarter.

Also production almost stops when you make radical changes to your hardware. Remember how big troubles Sony had with PStwo production and shipping. But if they want to produce something -- they will and how much they want.

Note how different Nintendo is. How cautious they are. How they can undermanufacture for months but will not risk losing anything on overproducing.

 

[tanod]

Byccha,

I just looked and I don't think I can get the SCEI figures out of the annual reports without some significant digging. Otherwise it's buried in the "Other" product group. Maybe some other time when I have some free time. Oh well.

 

[Miniboss1232]

That's why i said it's not that easy. Of course you still have to pay that contracts. But you don't lose money on components -- that's were most money are, labor -- not so much.

Sony and MS business strategy in videogames is "platform" model. They build platforms that 3rd parties make software for. And their production and shipping changes DRAMATICALLY from quarter to quarter. Like that 0.5M x360s that were shipped by MS WORLDWIDE in the last quarter.

Also production almost stops when you make radical changes to your hardware. Remember how big troubles Sony had with PStwo production and shipping. But if they want to produce something -- they will and how much they want.

Note how different Nintendo is. How cautious they are. How they can undermanufacture for months but will not risk losing anything on overproducing.

I imagine Sony will be pulling more towards the way Nintendo does things after this stint with the PS3. Stringer seems to not be too happy with the ridiculous costs of PS3 R&D. And I'm guessing he probably doesn't like over $1 billion in inventory sitting in warehouses either.

Nintendo's cautious attitude carried them through their lean console years. It's worked for them and kept them profitable even when they were last place. It's frustrating sometimes for consumers, but you can probably see why they do it. It works for them.

 

[Neomoto]

2007 -1,969,000,000 1,489,000,000

Unbelievable, seriously it boggles the mind even though it was expected. And this year will be even bigger for Nintendo (and it would seem even worse perhaps for Sony in terms of performance, not in losses though unless maybe if they are creating a psp2 already).

 

[Jokeropia]

(-409,000,000 ps2 launch?) + 623,000,000 + 939,000,000 + 650,000,000 + 404,000,000 + 75,000,00 + (-1,969,000,000) =

Spoiler

313,000,000 for the last 7 years profit

Holy crap.

 

[SteelHunter88]

MSFT and Sony have lost Billions like nobody has before, while at the same time in the same industry, Nintendo makes Billions like never before, and all you can give them is a "not bad" ??

Nintendo is wiping the floor with these guys. and it looks like its only going to get worse...

I'm trying my best to just be objective cuz we all know how easily one's reputation can be built here(troll, fanboy, etc.)

 

[iamblades]

Holy crap.

^^

It is looking like Sony might go into the red for the PS2-PS3 era next year, unless they seriously turn things around.

All of the PS2's profits burned up in less than two years of PS3. That's gotta hurt.

 

[bycha]

Lost posting priviliges -- can only update. Here's the latest + couple of notes.

FY*       Sony**        Nintendo        Microsoft
1998    974,000,000    629,000,000
1999   1,130,000,000   645,000,000
2000    730,000,000    421,000,000
2001    -409,000,000   726,000,000
2002    623,000,000    800,000,000     -750,000,000
2003    939,000,000    560,000,000     -1,191,000,000
2004    650,000,000    316,000,000     -1,215,000,000
2005    404,000,000    777,000,000     -485,000,000
2006    75,000,00      894,000,000     -1,262,000,000
2007   -1,969,000,000  1,489,000,000   -1,892,000,000
2008    -237,000,000    680,000,000                       
Totals  2,910,000,000  7,937,000,000    -6,795,000,000

Microsoft – Entertainment and Devices Division (Home and Entertainment) through 4th Q FY 2007 ended June 30 2007
Sony – Game division through 1st Q FY 2007 ended June 30 2007
Nintendo – Overall through 1st Q FY 2008 ended June 30 2007. Average exchange rate: 1 US $ = 118 yen

* -- it's fiscal year for both Microsoft and Nintendo
** -- it's FY+1 for Sony for comparison reasons

Forecast.
Nintendo through 4st Q FY 2008 ended March 31 2008 -- $2.02 B net income.
MS through 4th Q FY 2008 ended June 30 2008 -- "profitable".
Sony hrough 4th Q FY 2007 ended March 31 2008 -- "break even."


All the numbers but 2 last years were collected by our best man sonycowboy and are from previous thread.

So we could all remember the name of the game. It's not for the love of interactive entertainment.


The most pure videogame sector here is Sony's reports.

All Home & Entertainment divisions but Xbox is considered to be profitable. They also started losing money on Xbox before 2002 as it had to be R&D'ed and produced. Which is more than likely another billion or so. Recent reports also contain loses on Zune (but how much you can actually lose on mp3 player?).

Nintendo releases overall earnings reports – stake in pokemon + currency investments + some other minor things.

Additions, suggestions and comments are welcome.

Info:

http://www.nintendo.co.jp/kessan/english.html
http://www.sony.net/SonyInfo/IR/financial/fr/index.html
http://www.microsoft.com/msft/default.mspx

2 Notes:
1) Overall i can't see MS being profitable this gen. Losses already are just too much. With this losses, lack of WW appeal and obvious desire (no pricecut etc.) to be profitable they have slim chances to be anything but 3rd this generation.

2) Sony may break even this FY if they will bring 65nm real soon and will not make further price cuts (and i don't think they will).
A lot of ppl say that PSP and PS3 software don't sell. This is not true. PS3 have ok attach rate. PSP's attach rate is HIGHER than NDS.

Nintendo: no comments. Oh wait -- one. Biggest software publisher in the world coming FY.

 

[-COOLIO-]

wii is nintendo's last console confirmed.


seriously though how could anyone think n64/gamecube were their last consoles with numbers like this?

 

[bycha]

wii is nintendo's last console confirmed.


seriously though how could anyone think n64/gamecube were their last consoles with numbers like this?

Not a lot of people expected this. Still they say it's a fad.

 

[davepoobond]

wait. PSP's attach rate is HIGHER than the DS'?

then how come it never charts anything? does it mean that there's just a huge amount of games that sell a little amount rather than a "front-loaded" sort of thing?

 

[Jammy]

wait. PSP's attach rate is HIGHER than the DS'?

then how come it never charts anything? does it mean that there's just a huge amount of games that sell a little amount rather than a "front-loaded" sort of thing?

There's got to be a mistake. We NEVER see PSP games in charts, and if they are, they're always at the bottom. I think DS's unprecedented hardware sales might be the only thing skewing the attach rates.

 

[mckmas8808]

So Sony still thinks that they can end the year even on the Playstation front? That'll be a one billiion dollar turn around.

 

[davepoobond]

There's got to be a mistake. We NEVER see PSP games in charts, and if they are, they're always at the bottom. I think DS's unprecedented hardware sales might be the only thing skewing the attach rates.

how would it skew anything? attach ratio is based on software sales relative to the install base.

 

[Innotech]

There's got to be a mistake. We NEVER see PSP games in charts, and if they are, they're always at the bottom. I think DS's unprecedented hardware sales might be the only thing skewing the attach rates.

yeah basically DS sells at such a crazy rate even though its sold record numbers of software, its still at a lower attach rate per DS. But osmehow I doubt any third party or nintendo cares much when their games still sell into the hundreds of thousands (or millions).

 

[JoshuaJSlone]

wii is nintendo's last console confirmed.


seriously though how could anyone think n64/gamecube were their last consoles with numbers like this?

People saying that would give all credit to the portable sector.

 

[Slavik81]

I mean again I know you need to loose some money to break into an industry but how long will they continue to bleed billions of dollars

What's funny is that they haven't even been able to buy first place. Or even the good hardware (although they've done pretty well on the software side).

I would bet a great deal of money that the 360 does NOT reach 50 Million, heck I doubt it reaches 40 million. Remember the system has basically zero presence in Japan, and is doing just "ok" in the PAL territory. It's only doing well in the US, and even in the US the pace of the sales is not really fast. Don't forget also that though the 360 has only been out 15 months it has already gone through 2 holiday seasons, and the last holiday season they were not supply constrained while their two major competitors were. The 360's installed base, given a 5 year life-cycle, in my estimation will be in the mid to high 30 millions. They will be 3rd when it's all said.

There is no way that the console in last place in these console wars is going to end up in the high 30 millions.

 

[gimz]

too much numbers... i'm feeling dizzy, can anyone summerized the whole thing?

 

[TJ Spyke]

There is no way that the console in last place in these console wars is going to end up in the high 30 millions.

You are right, the PS3 is not gonna end up in the high 30 millions (the PS3 is doing horrible in Japan and North America, it's only doing good in PAL territories and PAL sales are usually much lower than Japan or North America).

 

[Innotech]

too much numbers... i'm feeling dizzy, can anyone summerized the whole thing?

Sony pissed away their profit from ther last 7 years
MS continues to bleed heavily
Nintendo built a new headquarters out of money

 

[Jammy]

how would it skew anything? attach ratio is based on software sales relative to the install base.

Exactly. Insanely high hardware numbers make attach ratios smaller, as you'd have to sell even more insane amounts of software to more than make up for that. DS is getting such insane hardware numbers that its software numbers would generally seem lower, despite the system shifting hundreds of millions of more games than the PSP. I'm assuming that considering how different the first half of 07 software sales were in Japan alone.

 

[davepoobond]

Exactly. Insanely high hardware numbers make attach ratios smaller, as you'd have to sell even more insane amounts of software to more than make up for that. DS is getting such insane hardware numbers that its software numbers would generally seem lower, despite the system shifting hundreds of millions of more games than the PSP. I'm assuming that considering how different the first half of 07 software sales were in Japan alone.

but they also should make software sales go up which makes the attach rate stay higher, since there are more people out there that would buy the software. if the attach rate goes down for the DS, then that means less games are being sold relative to its user base.

If the software sales numbers stay the same but the userbase increases, what do you think that means?

its more of a meter of how many people are still buying games on the platform after they've bought it. and there being a higher attach raiio on the PSP means there are more people in the PSP's userbase %age-wise still buying games as opposed to the DS'

 

[starship]

There is no way that the console in last place in these console wars is going to end up in the high 30 millions.

Why? I think 360 at the end will be in 3rd place and its sales will be at ~ 35 millions.

 

[starship]

You are right, the PS3 is not gonna end up in the high 30 millions (the PS3 is doing horrible in Japan and North America, it's only doing good in PAL territories and PAL sales are usually much lower than Japan or North America).

Joke post right?

 

[starship]

too much numbers... i'm feeling dizzy, can anyone summerized the whole thing?

Nintendo is d00m3d.

 

[Jammy]

but they also should make software sales go up which makes the attach rate stay higher, since there are more people out there that would buy the software. if the attach rate goes down for the DS, then that means less games are being sold relative to its user base.

If the software sales numbers stay the same but the userbase increases, what do you think that means?

its more of a meter of how many people are still buying games on the platform after they've bought it. and there being a higher attach raiio on the PSP means there are more people in the PSP's userbase %age-wise still buying games as opposed to the DS'

Well, I don't THINK the huge number of mature/older people and non-gamers in Japan that pick up the system for just a Brain game and NSMB are that prevalent and change the attach rate in a very notable way, but...

Where did we get the information on the attach rates anyhow? I believe somebody calculated the attach rate in the last NPD thread and DS's was higher. I mean, look at the Famitsu Half-Year thread, too. DS sold 16.1 million games (and 4 million handhelds) in half a year while 2.2 million PSP games (and 1.1 million handhelds) were shifted.

http://www.neogaf.com/forum/showthread.php?t=168959

That attach rate is very easy to calculate, and I'm sure it's been this way for a long time. PSP's is 2 and DS's is 4. I expect similar figures in the U.S. and Europe especially, where the PAL threads show 22 DS games in the top 40 for weeks.

 

[gimz]

Sony pissed away their profit from ther last 7 years
MS continues to bleed heavily
Nintendo built a new headquarters out of money

thank you

 

[davepoobond]

Well, I don't THINK the huge number of mature/older people and non-gamers in Japan that pick up the system for just a Brain game and NSMB are that prevalent and change the attach rate in a very notable way, but...

then you have to ask yourself if Nintendo is really expanding the market software-sales wise in any long-term sense...

Where did we get the information on the attach rates anyhow?

we get it from software for a certain period of time/total hardware. For example, LTD Software divided by LTD hardware would be the LTD Attach Ratio. If you wanted to compare for a quarter, it would be Quarter Software Sales divided by LTD hardware (you can't do quarter hardware sales since there is already an established userbase that is buying software in addition to what has been sold during that quarter)

I believe somebody calculated the attach rate in the last NPD thread and DS's was higher. I mean, look at the Famitsu Half-Year thread, too. DS sold 16.1 million games (and 4 million handhelds) in half a year while 2.2 million PSP games (and 1.1 million handhelds) were shifted.

http://www.neogaf.com/forum/showthread.php?t=168959

That attach rate is very easy to calculate, and I'm sure it's been this way for a long time. PSP's is 2 and DS's is 4. I expect similar figures in the U.S. and Europe especially, where the PAL threads show 22 DS games in the top 40 for weeks.

so then why is that guy saying there is an equal attach ratio for the DS? ...

 

[legend166]

Yeah, I just can't believe that the PSP has a higher attach ratio. Doesn't make any sesne at all.

 

[davepoobond]

Yeah, I just can't believe that the PSP has a higher attach ratio. Doesn't make any sesne at all.

simple. i'll just figure it out right now.


I'll do it for Q1 2007 for both Sony and Nintendo as well as LTD

GLOBAL ATTACH RATE - THESE NUMBERS ARE FROM THE Q1 EARNING REPORTS FROM NINTENDO AND SONY

Sony PSP

Q1 Software unit sales - 9.9 million units (9,900,000)
LTD Software unit production shipments - 101.4 million (101,400,000)
LTD Hardware production shipments - 25.39 million (25,390,000)

For Q1, attach ratio is incalculable, no "production shipment" numbers
LTD attach ratio is 3.99


Nintendo DS (i need help reading nintendo's earning report i think. this is only my guess, since the numbers they say in the report is "in ten thousands" which means put 4 zeroes on it...right?)

Q1 Software unit sales - 34,260,000(?)
LTD Software unit sales - 218,240,000(?)
LTD Hardware sales - 47,270,000(?)

For Q1, attach ratio is 0.72
LTD attach ratio is 4.62



did i do nintendo's right? it seems like it after i calculated the tie ratio for that...

 

[Branduil]

What's funny is that they haven't even been able to buy first place. Or even the good hardware (although they've done pretty well on the software side).



There is no way that the console in last place in these console wars is going to end up in the high 30 millions.

You're responding to months-old posts. One of the people you're responding to is banned.

 

[BishopLamont]

There is no way PSP's software ratio is higher then the DS, just look at any chart for any region.

 

[xaosslug]

wow. All those "-" in MS' section really just underscores how insanely profitable MS is as a whole, to the point where they can continue to screw around with their gaming hobby. They're like an eccentric billionaire that uses dollar bills to blow his nose and five spots to wipe his ass. Bananas.

 

[davepoobond]

There is no way PSP's software ratio is higher then the DS, just look at any chart for any region.

look at my post. i think i just showed that it is...

 

[MaddenNFL64]

Damn, so the PSP software ratio is higher, even though we never see PSP games on the charts... so off :lol.

 

[lockload]

But what if your oranges exist to battle with enemy oranges because the enemy oranges are designed to attack your apples and your apples are very important to you, so you need to stop the enemy oranges from taking over your living room whilst your apples fight other Apples!

This is exactly what it is long term living room awaremess for Xbox, Xbox live and more so the Xbox live video marketplace... and coming soon IPTV

Look at HD-DVD MS has no real stake in it they just released the addon it to muddy the water, their main interest is in digital delivery thought xbox live video marketplace, even bluray loyal movie companies are releasing HD movies on the video marketplace

 

[starship]

look at my post. i think i just showed that it is...

Your post has some inaccurate numbers. Do you think that PSP hardware sales are just ~ 12m???? I don't know where did you get your numbers from but those are clearly not accurate.

 

[davepoobond]

Your post has some inaccurate numbers. Do you think that PSP hardware sales are just ~ 12m???? I don't know where did you get your numbers from but those are clearly not accurate.

okay, let me look

 

[starship]

lol i got them from Sony's Q1 results. why don't you write a letter to the FTC/SEC and tell them they're inaccurate


if they were LESS, the attach ratio would be even HIGHER

Less?? What are you smoking? :lol
If you add NPD and MC sales alone for the PSP, it will top 14m. Sony shipped more than 25m PSPs WW at the end of March.

 

[legend166]

Either you're reading the numbers wrong, or Sony are lying in that financial report.

http://www.scei.co.jp/corporate/data/bizdatapsp_e.html

Says there they have produced 25 million. I have no idea what the LTD sales of the PSP are worldwide though. 21-22 million maybe?

So yeah, from that the attach ratio is more like 3.2 or something.