| student said: It's interesting but it is hard to measure the true profit success of the companies outside of Nintendo. There's no question that Nintendo is doing an outstanding job of reeling in the profits but you have to remember that the other two companies are significantly larger than just their video game division. For instance, for Sony, if the PS3 causes blu-ray to win... their increased profits will far outweigh the losses in the last few quarters. For Microsoft, if they keep sony from controlling the living room and can find a way to expand Live Anywhere, then the Xbox line will have paid off... far more than the costs they've incurred. |
As for Bluray, the potential profits from it do not outweigh the massive losses much less the lost profit from the PS3. Sony averaged about $660 million a year. Since PS3 development started in earnest in 2005 Sony has lost $1.7 billion when they would on average made over $2 billion. They show no sign of returning to a profit anytime soon so returning to average profit is a ways away. Fishey Joe is the resident VGChartz expert on Bluray revenue so he can explain much better why Bluray is not the panacea some think.
Same with Liver anywhere, is it going to make up the $6+ billion lost on video games plus the lost ROI? Assuming a 7% potential ROI MS needs to make up almost $8 billion today. Live anywhere and video games would have to earn a profit of over $500 million a year just to stop falling behind. The only time any video game companies have done that was Nintendo with a far better business model and 2 systems and Sony with unheard of system sales. I don't think MS has any hope of that happening anytime soon.
I know both have negative benefits but we really don't know what the value of them are. As it turned out Kutaragi did pretty bang up job of keeping Sony from controlling the living room without Microsoft's help and even should they have tried it's unlikely they would have succeeded (seeing as no one has). Bluray may very well flop even if it does kill HD-DVD. At best they lowered the risk to each company but we also don't know by how much. Not knowing either the value or the risk it is kind of hard to analyze their negative benefit.
