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Forums - Gaming Discussion - So Nintendo Q2 profits > Sony gaming division Q2 profits

 

Which company will have better results come fiscal year end in 2015?

Sony 88 20.00%
 
Microsoft 82 18.64%
 
Nintendo 225 51.14%
 
Ouya 45 10.23%
 
Total:440
Giggs_11 said:
S.T.A.G.E. said:
Good for Nintendo seeing that they went cheap as always with their hardware but also good for Sony seeing as they took more risk on more powerful hardware and and are reaping the benefits.Also seeing that they are a year behind Nintendo it doesnt bother me at all.


Geez, what a bitter comment... :D Still, a few things not correct in it:

1) Cheap as always it's not entirely correct, I believe apart from Wii, previous consoles Nintendo always had the more expensive hardware, or at least toe-to-toe with the others (Nes, SNES, N64, Gamecube). With WiiU comes weaker hardware buit in the console but an expensive gamepad and a more expensive console structure than X1 and PS4. Don't think, all accounted for, WiiU is that more cheaper than PS4 and X1.

2) Sony didn't took more risk, building a machine which is only stronger than the previous one is the easy way to go. Kinect, motion controls (Wii), gamepad, those are examples of taking risks.

3) Being a year behind doesn't matter to the discussion at all. We're talking about quarter sales (3-month time frame) not ltd sales. Actually, generally being younger is even better cuz it's fresh, the new thing, and it gets people attention.

Think man...think. Do you really think Nintendo's console would've profited as console at the rate they are going if it was as powerful as the PS4? It would've taken them much longer. The Wii U is borderline last gen tech. Its profitable and Nintendo reaped the benefits by staying true to their normal policies of making profits off of cheaper hardware. There is no bitterness in this. I've just learned to accept Nintendo as they are. I used to defend them from people I saw as haters, but once I educated myself I realized more often than not what they get is definitely what they deserve for better or for worse.

1) No. The Wii U was borderline last gen tech...they haven't been on the forefront of power since the 90's.

2) Of course Sony takes more risk with hardware with Nintendo, which is why they tend to take more losses Nintendo and its been this way since the beginning. I am talking about costliness of the product and parts involved. Nintendo is a wiz when creating the cheapest console possible to produce. This is how they survived the Gamecube generation. Its all about profitability. Despite having better graphics than the PS2 the PS2 had the Disc format that was sellings slowly at the time and Sony provided it and lowered its market price making it affordable for all. Microsoft followed suit soon after and the same goes for Blu Ray. Sony is the game changer when it comes to formats. There are a lot of companies that depend on their control over formats in the gaming industry especially since they spearhead it most of the time anyway.

3) Being a year behind does matter, because Sony had to make a profit off of the hardware and break even on the R&D before they can pull in more profit.

So again...Nintendo isn't doomed because Nintendo always plays it smart when it comes to developing a console they can quickly profit off of.



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I thought Nintendo was doomed with the Wii U, lmao :DDD



Nem said:
Ninsect said:
Well Sony will have massive holiday sales for both hardware and software so I think they will outprofit Nintendo comfortably


I'm not sure you understand how profit this works. ^^

Its not just about sales, its about margins. Nintendo can easily sell 10x less systems and still make more profit than Sony. I'm afraid things arent as simple as you wanted them to be there. Sadly, we dont have the info to determine the inflexion points.

I do know how profit works lol. To easily sell 10 times less and profit more? Lol, not at this rate. They made the same profit with almost 50% of the sales.

Like someone pointed out, Nintendo's platforms are older and thus have higher profit margins due to manufacturing costs going down with time.



The One and Only

VizionEck.com

Profit is not just about sales. Nintendo now make a profit off each Wii U and 3DS sold, whereas I believe Sony make losses on PS4 and Vita hardware sales. Therefore they rely on software sales to generate the profit. Nintendo make profit from both hardware and software (and some of their first party software can be very profitable). Though I haven't looked at Sony's numbers in detail, I presume the point here is that Playstation are turning over significantly more than Nintendo but at a much lower profit margin.

I think Sony will edge Nintendo out but the fact that it's close at all shows that ultimately this business is about way more complicated than who's winning the sales war. I have no idea about Microsoft.



Zekkyou said:
If i remember correctly, Nintendo were selling WiiU's at 100% profit this quarter due to over shipping in a previous one. It was also the 3DS that made up the majority of their hardware and software sales, not the WiiU.

Would be interesting to know what sort of profits the WiiU itself is usually generating. I don't expect it's much :/

On a side note, do we know how much of Nintendo's profits were from non-gaming related stuff?

"...covering the period between July and September.

A number of interesting figures were revealed in the accompanying report, including the news that 610,000 Wii U consoles were sold during that period, almost double what was managed during the same timeframe 12 months prior."

"The 3DS, meanwhile, saw sales fall year-on-year from 2.49 million to 1.27 million despite the hugely successful launch of Super Smash Bros. for 3DS."

I've always been curious myself as to how much Nintendo brings in through merchandise although it's probably not what's keeping the company profitable.

They are working on new segments beyond gaming, even though their upcoming "quality of life" devices/apps will be compatible with existing Nintendo devices. 

http://www.gamnesia.com/news/nintendo-wants-to-redefine-entertainment-with-qol#.VFN0j4dakoM




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Ninsect said:
 

I do know how profit works lol. To easily sell 10 times less and profit more? Lol, not at this rate. They made the same profit with almost 50% of the sales.

Like someone pointed out, Nintendo's platforms are older and thus have higher profit margins due to manufacturing costs going down with time.


Yup, the 3DS in particular must be making quite a bit of money. It explains why they just released a new model aswell with better specifications and sell it at aproximately the same price.



Ka-pi96 said:
Giggs_11 said:
Ka-pi96 said:
Giggs_11 said:

Sure, but it wont come down to just quantity of units sold. Q2 PS4 outsold WiiU 5.5 to 1 if I'm not mistaken, yet Nintendo was able to edge out Sony financially. Now imagine Nintendo had sold just as many WiiU has Sony did PS4s (and the same thing goes for software), how would the financial go?

Nintendo and Sony have completly different approaches to the gaming business. All that marketing, exclusive deals with developers, bundles, etc, cost a lot of money, I mean a lot. Yet Sony can compensate that with lots and lots of units sold. In fact, they need lots ands lots of units sold to turn profit. Nintendo relies on in-house developed software and hardware, with less fewer moneyhatting, marketing (except for their on products) and doesn't need that many  sales to turn profit.

 

I think it will be an interesting battleto see.

Except you seem to be forgetting that the 3DS exists...

I can't see how you take that from what I've stated, but ok...

Let me clarify it for you, PS4 trashed WiiU in sales, yet Nintendo (company, not WiiU, but Nintendo, as in, the whole company) exceed Sony's gaming division in net profits. It's pretty clear I'm talking about gaming divisions, not a single plataform since we don't have data for it. No imagine if WiiU actully did good...

FYI, Sony also has a gaming handheld and I'm pretty sure it's also accounted on Sony's gaming division.

Yeah you are suggesting Nintendo made more money despite the Wii U doing so poorly in comparison to the PS4. But that's not all there is, there is also handhelds involved. If we were to compare them the ratio would probably be much higher than 5.5: 1 in Nintendo's favour. So your hypothetical scenario of Nintendo selling as many Wii Us as PS4s could also be turned into what if Sony sold as many Vitas as 3DSs...

Well that I can agre with it cuz it does make sense. Nevertheless, deosn't mean, like you said before, I'm taking the 3ds out of the picture.

The thing is, Sony pratically gives it no support, I'm not even sure Sony will have another handheld after Vita, they focus solely on PS4. Vita (although i think it sold more units than WiiU this quarter) is pretty much dead outside of Japan and there's no efforts from Sony towards it.

EIther way, if you take into account that PS4 + Vita outsold Wii U + 3ds (if this is not correct please tell), Nintendo's Q2 results over  Sony's are actually pretty good.



Nintendo, first party are their biggest sellers and they it's more profit from first party than 3rd party.



greenmedic88 said:

"...covering the period between July and September.

A number of interesting figures were revealed in the accompanying report, including the news that 610,000 Wii U consoles were sold during that period, almost double what was managed during the same timeframe 12 months prior."

"The 3DS, meanwhile, saw sales fall year-on-year from 2.49 million to 1.27 million despite the hugely successful launch of Super Smash Bros. for 3DS."

I've always been curious myself as to how much Nintendo brings in through merchandise although it's probably not what's keeping the company profitable.

They are working on new segments beyond gaming, even though their upcoming "quality of life" devices/apps will be compatible with existing Nintendo devices. 

http://www.gamnesia.com/news/nintendo-wants-to-redefine-entertainment-with-qol#.VFN0j4dakoM


Iwata mentioned last year that they were looking into expanding their licensing business. I think we shall see the fruits of that venture soon.

http://www.polygon.com/2014/1/30/5362352/nintendo-plans-to-actively-expand-character-licensing-business



S.T.A.G.E. said:
Giggs_11 said:


Geez, what a bitter comment... :D Still, a few things not correct in it:

1) Cheap as always it's not entirely correct, I believe apart from Wii, previous consoles Nintendo always had the more expensive hardware, or at least toe-to-toe with the others (Nes, SNES, N64, Gamecube). With WiiU comes weaker hardware buit in the console but an expensive gamepad and a more expensive console structure than X1 and PS4. Don't think, all accounted for, WiiU is that more cheaper than PS4 and X1.

2) Sony didn't took more risk, building a machine which is only stronger than the previous one is the easy way to go. Kinect, motion controls (Wii), gamepad, those are examples of taking risks.

3) Being a year behind doesn't matter to the discussion at all. We're talking about quarter sales (3-month time frame) not ltd sales. Actually, generally being younger is even better cuz it's fresh, the new thing, and it gets people attention.

Think man...think. Do you really think Nintendo's console would've profited as console at the rate they are going if it was as powerful as the PS4? It would've taken them much longer. The Wii U is borderline last gen tech. Its profitable and Nintendo reaped the benefits by staying true to their normal policies of making profits off of cheaper hardware. There is no bitterness in this. I've just learned to accept Nintendo as they are. I used to defend them from people I saw as haters, but once I educated myself I realized more often than not what they get is definitely what they deserve for better or for worse.

1) No. The Wii U was borderline last gen tech...they haven't been on the forefront of power since the 90's.

2) Of course Sony takes more risk with hardware with Nintendo, which is why they tend to take more losses Nintendo and its been this way since the beginning. I am talking about costliness of the product and parts involved. Nintendo is a wiz when creating the cheapest console possible to produce. This is how they survived the Gabecube generation.

3) Being a year behind does matter, because Sony had to make a profit off of the hardware and break even on the R&D before they can pull in more profit.

So again...Nintendo isn't doomed because Nintendo always plays it smart when it comes to developing a console they can quickly profit off of.


No. Points 1 and 2 are wrong, point 3 is actually wrong too, but so is his statement.

1) Since it has a more expensive controller, in the end, Wii U is not that cheaper. Even if the console itself is weaker

2) There are 4 ways of product differentiation: price, performance, innovation and convenience. Sony always try to win by better performance, which is hard but not risky. Nintendo always try to win by innovation, which is the riskier strategy, by far.

3) R&D costs don't go into the Income Statement the way you think. While the time of a product on the market does matter, that is not reason. I will quote him and post more about this.