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PSN Alone Generated More Revenue Than The Entirety of Nintendo, MicroSoft's Entire Gaming Division!

Forums - Sales Discussion - PSN Alone Generated More Revenue Than The Entirety of Nintendo, MicroSoft's Entire Gaming Division!

 

Biggerboat1 said:
An obscure football manager in Scotland once said this in a televised interview "statistics are like mini-skirts - they look good but hide the most important part"

Not saying it's the best quote ever but stuck with me for the sheer randomness factor.

I think it applies here, PSN could have more revenue than Nintendo, but how that actually translates to profit is unknown and is really the only thing that matters. Revenue for show, profit for dough!

Actually, how revenue translates to profit is very straightforward, there are very simple formulae depending on the accounting standards the company complies to.

Also, it's not statistics that hide important information. It's just that there are many people that are unable to understand and interpret the numbers.



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Biggerboat1 said:
An obscure football manager in Scotland once said this in a televised interview "statistics are like mini-skirts - they look good but hide the most important part"

Not saying it's the best quote ever but stuck with me for the sheer randomness factor.

I think it applies here, PSN could have more revenue than Nintendo, but how that actually translates to profit is unknown and is really the only thing that matters. Revenue for show, profit for dough!                             

The following numbers cover April to December 2018, as opposed to the entirety of calendar year 2018 like other numbers in this thread. I am being lazy and can't be bothered to search for the missing quarter that is accounted for in different financial reports.

Sony operating income - 247.2 billion yen
Nintendo operating profit - 220.029 billion yen



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

Shouldn't be too surprising. There's a reason that Sony jumped on board the pay to play online service model, despite many fans predicting they never would. It prints money. And now even Nintendo is following suit, though late to the party but also offering a much better (but lower, which impacts these numbers) price.

So they're all raking in money from their storefronts and Sony is selling more consoles, which means more gamers, which means more PS+ subs, which means more money than the others.



 

last92 said:

 

Biggerboat1 said:
An obscure football manager in Scotland once said this in a televised interview "statistics are like mini-skirts - they look good but hide the most important part"

Not saying it's the best quote ever but stuck with me for the sheer randomness factor.

I think it applies here, PSN could have more revenue than Nintendo, but how that actually translates to profit is unknown and is really the only thing that matters. Revenue for show, profit for dough!

Actually, how revenue translates to profit is very straightforward, there are very simple formulae depending on the accounting standards the company complies to.

Also, it's not statistics that hide important information. It's just that there are many people that are unable to understand and interpret the numbers.

Ehm, not really understanding your point here...

If Company A has a revenue/turnover of 100K and 10K costs & Company B has a 100K revenue/turnover and costs of 90K then Company A is in a muuuuuch better position (90K profit) than Company B (10K profit), even though their revenues are the same.

So 'translating' revenue to profit has nothing to do with a formula, but on subtracting your costs... Unless by a formula you mean Revenue - Costs = Profit, in which case I agree. Though that would suggest that you misinterpreted my use of the word 'unknown' in my previous comment. It is not because I don't understand this basic principle but that we only know PSN's revenue, not it's costs, and therefore not it's profit, and therefore the we're stuck with the mini-skirt...

Unless my understanding of the word revenue is incorrect, in which case I apologise in advance :)



 

RolStoppable said:
Biggerboat1 said:
An obscure football manager in Scotland once said this in a televised interview "statistics are like mini-skirts - they look good but hide the most important part"

Not saying it's the best quote ever but stuck with me for the sheer randomness factor.

I think it applies here, PSN could have more revenue than Nintendo, but how that actually translates to profit is unknown and is really the only thing that matters. Revenue for show, profit for dough!                             

The following numbers cover April to December 2018, as opposed to the entirety of calendar year 2018 like other numbers in this thread. I am being lazy and can't be bothered to search for the missing quarter that is accounted for in different financial reports.

Sony operating income - 247.2 billion yen
Nintendo operating profit - 220.029 billion yen

Yeah, those are the figures that matter. Having a revenue-measuring contest is kind of pointless imo...

In 2012 Amazon had a revenue of 61 billion & a profit of... -39 million...



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Darwinianevolution said:
I'm not sure if this model is going to be sustainable. Games as service and the proliferation of suscriptions will eventually burn people out, not everyone has enough money to pay for all the subscription entertainment demands nowadays. The fact that, after years of paying for stuff you still don't own anything is just the cherry on top.

I don't see hw that applies here or maybe you are mixing up the whole GAS thing.

This is sony revenue generated from services such as PSN....etc. So basically even sales on the PS store count towards this along with PS subscriptions.

All that is very different from GAS. And as for subscriptions, sony is obviously against multiple subscriptions existing on their platform. Its why we dont have EA access.



 

Biggerboat1 said:

 

RolStoppable said:

The following numbers cover April to December 2018, as opposed to the entirety of calendar year 2018 like other numbers in this thread. I am being lazy and can't be bothered to search for the missing quarter that is accounted for in different financial reports.

Sony operating income - 247.2 billion yen
Nintendo operating profit - 220.029 billion yen

Yeah, those are the figures that matter. Having a revenue-measuring contest is kind of pointless imo...

In 2012 Amazon had a revenue of 61 billion & a profit of... -39 million...

What you're saying makes complete sense, what we need to know is profit of the entirety of PSN for this to even mean much.

Does anybody know if we ever get net profit or operating profit for PSN specifically in Sony's Financial Reports? The Feb. 13th is when we should get that info if it's included. 

Though, my guess is it was still more profitable, but I don't mind being proven wrong. 

Last edited by Ljink96 - on 01 February 2019

 

Biggerboat1 said:

 

RolStoppable said:

The following numbers cover April to December 2018, as opposed to the entirety of calendar year 2018 like other numbers in this thread. I am being lazy and can't be bothered to search for the missing quarter that is accounted for in different financial reports.

Sony operating income - 247.2 billion yen
Nintendo operating profit - 220.029 billion yen

Yeah, those are the figures that matter. Having a revenue-measuring contest is kind of pointless imo...

In 2012 Amazon had a revenue of 61 billion & a profit of... -39 million...

No, revenue is far from a unimportant figure.

Sure, Amazon loses money regularly. Netflix maybe too. But their revenue keep growing, showing that they lose money but expand their business, their customer base, their reach. It's a strategy for some companies to sacrifice the profit for the growth.

Profit is important, of course, but revenue allows you to see the "size" of the company. Surely some small online shopping companies have a better profit than Amazon, but does that mean that Amazon is losing to them? No. 

Both are important and go together, you can't say "this one doesn't matter, give me the other one".



 

Ljink96 said:

 

Biggerboat1 said:

 

Yeah, those are the figures that matter. Having a revenue-measuring contest is kind of pointless imo...

In 2012 Amazon had a revenue of 61 billion & a profit of... -39 million...

What you're saying makes complete sense, what we need to know is profit of the entirety of PSN for this to even mean much.

Does anybody know if we ever get net profit or operating profit for PSN specifically in Sony's Financial Reports? The Feb. 13th is when we should get that info if it's included. 

Though, my guess is it was still more profitable, but I don't mind being proven wrong. 

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 what they get in hand from a sold game, due to the nature of PSN. Unlike Amazon where that can vary a lot depending on what is sold, and who is selling it.

Last edited by Hiku - on 01 February 2019

1.  This shows why Sony's gaming division just had it's most profitable year.  Digital has much higher profit margins than physical.  

2.  This also shows why Gamestop has been in trouble.  Their alleged allies are competing against them.  Normally a console maker and retailer are partners in sales.  Not anymore, because Sony and Microsoft have their own online stores (and to a lesser extent Nintendo).  If Gamestop were smart, then would look for ways to gradually focus more on Nintendo and less on Sony and Microsoft.  The latter two are just throwing Gamestop under the bus anyway.