A breakdown of gaming profits for the last 3 years.

[Bodhesatva]

vizunary said:
good type up Bods!

One thing to consider from the Sony perspective is that theoretically the PS will help bring in considerably more profits in their other entertainment divisions during this generation than ever before. Most notably of course Blu-ray, when(yes when, not if, I am hopeful and pretty sure) it becomes the only HD disc format and secures billions in royalties, but also VoD possibilities and Sony Music, etc.

I doubt they will ever make as much raw profit just from their gaming division as N, that's not likely at all, but i do believe they will stay a far step ahead of MS in this category.

Yep, it's a delicate balance. Every dollar spent is essentially a gamble.

I think Sony and Microsoft are both viewing this as a Windows-esque monopoly situation, where someone, somewhere down the line is going to become the nigh-uncontestable producer of video game systems and software, and they are going to make a lot of money. A whole lot of money. Windows is still dominant -- even though almost no one thinks its the best platform -- because, well, everybody already uses it. And since everybody already uses it, I guess I will to. And guess what? That means even more people are still using it, which means the next guy in line is even more likely to continue the trend. It's a very lucrative and extremely difficult monopoly to break, and the same logic applies to video game systems; I buy systems, in part, to play with my friends, and if my friends all own console A, I'm probably going to buy console A, no matter how super awesome console B is.

So it sounds good, in theory. Lots of money, somewhere in the future, and both MS and Sony are after it. But what if they're wrong, and the "convergence" box doesn't really materialize? Or what if they're right, but they lose out (as in, MS or Sony gets marginalized, and the other takes over... or even Nintendo takes over, although they've shown no proclivity towards it) . In short -- what happens if MS/Sony spend billions and billions of dollars... and then don't get that enormous, theoretical mother load payout in the end? Well.... that hurts, really badly. It's a gamble. It's why both Sony and Microsoft seem to be willing to lose billions of dollars years on end, with no clear end in sight. If this were the toaster business, they would have been out so long ago! There has to be a limit as to how far they're willing to go, but it's unclear what that limit is. Are they willing to go a few billion dollars in the hole? Clearly the answer is yes. Are they willing to begin significantly hurting their other assets in order to pump money in to the 360/PS3? I think that's where they'd draw the line, but we'll see.