You got to hand it to Microsoft

[Lord N]

NJ5 said:

Microsoft's profit margin: Usually around 30%

Sony's profit margin: Usually a bit above 1%

See why Microsoft can afford to easily drop billions into a product without blinking? Microsoft has:

- very robust profit margins
- a huge cash reserve (I recall in the tens of billions)
- no debt (means less risk and no interest rates dragging profits down).

Sony has:

- very fragile profit margins (which are biting Sony in the ass right now and will bite more and more as the recession and weak dollar/euro continue)
- a moderate cash reserve ($12 billion last I checked)
- tons of debt (around $10 billion last I checked)

To me, that says Microsoft is the conservative one, no matter how many billions their entertainment division lost in the past. They can afford that luxury because they have sound financials.

PS: You can find these numbers at MS's and Sony's investor relations page if you wish to.

 

 

I think it's pretty clear here that I'm talking about MS's performance and profits(or lack thereof) in the video game market. Not their performance and profits in every other market that they are involved in.

MS cash reserves and market dominance with OS and office tools doesn't change the fact that they're still being pummeled at every turn by the Wii, doesn't change the fact their best case scenario for this generation is to end up a distant, unprofitable second, doesn't change the fact that the 360 has yet to see strong sales in all regions outside of the holiday season, and doesn't change the fact that the 360 has yet to turn a consistent profit.

Bringing up MS's financials that it's incurred due to its other divisions is grasping at straws, and it really means nothing considering the above. For all of that money, MS is still in the same position that it was in last generation. It's just that Nintendo is beating the hell out of them instead of Sony.