Well, that aside I want to point out that comparing a fairly straight forward online service platform to a company like Amazon is not a good comparison to make. @Biggerboat1
Amazon often invest their own money into the products they sell. New games and consoles for example, they buy them in bulk for a certain price, and then sell them to consumers at a higher price.
They're reliant on how much they sell, after they've invested money into the product. And if it doesn't meet sales expectations, they may lower the price, etc.
Very different from how Sony sell games on PSN. Sony don't buy in any quantities of the games they sell through PSN. They just host the digital data. Whenever someone downloads a game from their store, they simply take a cut of the sale. Whether it's millions or thousands of copies, they didn't invest an amount of money corresponding to that number.
The costs are instead things like servers, maintenance, bandwidth, R&D, etc. And paying for the games that are offered Free through PS Plus.
So it stands to reason that their profit margins are generally a lot closer to their net profit when it comes to sales, due to the nature of PSN. Unlike Amazon where that can vary a lot depending on what is sold, and who is selling it.
Well sure, the underlying data behind comparing Amazon itself to PSN isn't on solid ground, but I'm stating the obvious that we need to know both Revenue and Profit to make a decent comparison as revenue is only half the story. I just want to know profitability of PSN but I don't think Sony gives that kind of information out, to my knowledge they only divulge into gaming division as a whole in terms of profitability as yes, Sony only takes a cut of all transactions on PSN (i.e. digital software, movie rentals, PSNow, etc.). Either way, I'm anticipating revenue and profitability to surpass Nintendo as there's more avenues to generate revenue than Nintendo is exploring.
Yeah it was more of a reply to Biggerboat1. Basically that whenever they sell games or DLC, whatever they get from that transaction is pretty close to pure profit, aside from things like server and bandwith costs.
Last edited by Hiku - on 01 February 2019
But the main question is if the entire $60 of a game sale is counted as their revenue here. Or if the revenue is only referring to their cut.