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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!

Playstation is now the core business of sony, wait for more and more investments in ps5.



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This graph is out of date now, but it would be interesting to see this updated, the method of Sony and MS making losses on hardware can be seen in the lower accumulated profits, Nintendo even in the Gamecube era made more profit than the PS2, now with Sony and MS doing so well with their online services that graph may change a lot



Miyamotoo said:

Do we have profit numbers, for instance Nintendo made $1.55 billion profit.

How you figure?

9 months FY

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



rapsuperstar31 said:
Because of suckers like me that look every week to see what is on sale, and end up buying a bunch of games half off that I will probably never get to.

Tell me about it. I bought Shadow Of War and Dragon’s Dogma for a combined $24 and haven’t played either game. Maybe I’ll do it sooner or later. 



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A mouse & keyboard are made for sending email and typing internet badassery. Not for playing video games!!!

Farsala said:
Miyamotoo said:

Do we have profit numbers, for instance Nintendo made $1.55 billion profit.

How you figure?

9 months FY

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

In case of Nintendo, isnt end of line profit, "Profit attributable to owners of parent"? In this case, 168.7 billion yen.

https://www.nintendo.co.jp/ir/pdf/2019/190131e.pdf



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PS5 BC a must.



”Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world.”

Harriet Tubman.

Ka-pi96 said:
ArchangelMadzz said:

It's from their financial reports. They can only report the revenue they receive. The can't include money that Activision made to their own investors.

But they would have received it. When somebody buys say COD on PSN it doesn't matter that Sony only keep what 30%? of the amount, the full price would still be paid to Sony and go through their bank before being paid onto Activision.

They wouldn't count it as their own revenue. Revenue means income. Revenue is the income that they earn or receive and not the money they have to spend or pay out, the money they have to give activision is the payout and cannot be included in revenue.

Amazon for example in their revenue count the money they receive as a cut from their sellers. And they take away their wage budget and other operational costs for their profit.



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ArchangelMadzz said:
Ka-pi96 said:

But they would have received it. When somebody buys say COD on PSN it doesn't matter that Sony only keep what 30%? of the amount, the full price would still be paid to Sony and go through their bank before being paid onto Activision.

They wouldn't count it as their own revenue. Revenue means income. Revenue is the income that they earn or receive and not the money they have to spend or pay out, the money they have to give activision is the payout and cannot be included in revenue.

Amazon for example in their revenue count the money they receive as a cut from their sellers. And they take away their wage budget and other operational costs for their profit.

They do earn or receive it though. You buy a $60 game from PSN and Sony receive $60, that's a fact. It doesn't matter that they have to pay out $40 (or whatever the actual amount is) to the publisher of the game after that, they still initially received $60.



Bet Shiken that COD would outsell Battlefield in 2018. http://gamrconnect.vgchartz.com/post.php?id=8749702

Hiku said:

 

abronn627 said:

 

The entirety. When they speak of revenue generated on their platform it’s the amount of $ spent on their services, not the the actual gross margin they made on each download. If a customer buy FIFA at 60$ on PSN, it’s 60$ of revenue, the cut they take as a “retailer” is part of the profit margin generated by the service.

In other words, it’s exactly the same way a retailer like GameStop operate.

I think they do count the entire $60 as their revenue. However, I would not say it's exactly the same.

You're familiar with the term "shipped units" I presume? That's what publishers/distributors have sold to retailers like Gamestop.

Generally speaking, if let's say Capcom has shipped Resident Evil 2, it's almost as good as a sale to them, and they don't necessarily care what happens after that, whether it sits on the shelf of the retailer forever, or reaches the hands of a buyer. They still got their money. Of course there are other reasons for why sold through units are more important, such as the potential extra sale of DLC and microtransactions, etc. But they don't have to wait for the game to get sold (again) for them to present those shipment figures to their investors.

That's not the case for a retailer like Gamestop though. In order for them to make money on that transaction, they're reliant on the product being sold through to the customer as well.
In other words, Capcom's "cut" for Resident Evil 2 is already taken care of during the initial transaction when the games are "shipped" to Gamestop.
It's basically the price at which Capcom chose to sell the game to Gamestop for.

So when Gamestop sell Resident Evil 2 for $60 to a customer, that's all Gamestop's revenue. Capcom don't take a piece of that sale literally speaking. They already got paid before the sale.
Then the profit for Gamestop is calculated after you take all the revenue and subtract all the expenses, such as the cost of buying the game.
So basically, because Capcom already got paid when the games were shipped, whatever Gamestop make on the transaction when selling to a customer is theirs to keep.

However, that's not the case when selling games through a service like PSN. Because they don't buy in any quantity of games, Capcom only get paid after the game has been sold to a customer. So everything Sony got from that sale, isn't theirs to keep.

The $60 that Gamestop gets is all theirs. But the $60 that Sony gets is not all theirs. Which makes me a bit unsure if they count all of it as their revenue. Since its electronic, Capcom could technically get their cut immediately upon every individual sale. Though I doubt that's the case. Rather, I think Sony hold the entire sum initially, and then pays the publisher on a regular (maybe monthly) basis based on the number of copies sold and at which price it was sold.

Yeah, I got all that. Having worked for GameStop for years and played with their P/L reports on a monthly basis I can tell that the idea you have about the way they work isn’t far from the reality, it’s still a little bit more complex, but you have the basic idea.

I used this retailer as an example to validate how revenue and profit are seen as two different thing and the revenue made from a transaction processed on PSN isn’t different than the revenue from a transaction in a retail chain even if said product is already owned by the retailer. The first one is more straightforward in it’s process while the latter is more complex since it’s more dependent on ROI and inventory.

And like you, I’m curious to know how a sale are processed and shared with publishers on services like PSN, XBL or eShop. If someone has any insight, I’ll gladly learn something new.



Ka-pi96 said:
ArchangelMadzz said:

They wouldn't count it as their own revenue. Revenue means income. Revenue is the income that they earn or receive and not the money they have to spend or pay out, the money they have to give activision is the payout and cannot be included in revenue.

Amazon for example in their revenue count the money they receive as a cut from their sellers. And they take away their wage budget and other operational costs for their profit.

They do earn or receive it though. You buy a $60 game from PSN and Sony receive $60, that's a fact. It doesn't matter that they have to pay out $40 (or whatever the actual amount is) to the publisher of the game after that, they still initially received $60.

I get that you see it that way, but it's not legally revenue when the money goes through them to be filtered off to another company. Steam's revenue reports are theirs and do not include the money that developers get. 

Think of it this way.

If they did it your way imagine how shit their profit margins in their reports would be if their earnings report showed they LOST $40 for every 3rd party game they sold. That's 100's of millions of loss every single quarter. That doesn't look good, and it's obvious that's not the way they do things. 



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