| RVDondaPC said:
Are you trying to give me a lecture on finance or are you adressing the situation? It doesn't matter what you call it, we don't know the numbers all we know is that it is a giant revenue stream. And yes revenue streams are very important, not just profits. Revenue streams are an indication of long term profitability while profit is just a short term indicator. But that is all besides the point. The potential profitability that Activision would have without supporting Sony is much lower than with it supporting Sony. As for your second point, it doesn't really matter because Activision doesn't own those licensed games IP's. So they wont get to make the games if they don't support Sony because it would be lost revenue for the licensees so they would just look for THQ or EA or Take-Two to license their games instead of Activision. Even if activision still published the games for the 360/Wii they would probably just get Sony to publish the games for the sony platforms and that would just be increased revenue for Sony. |
The revenue streams from the American automobile manufacturers have always been massive, and yet they are all desperately trying not to go bankrupt; in contrast Toyota and Honda were smaller companies that focused on profit (and not just revenue) and as a result they now produce more cars at lower costs and sell them for more money with a larger margin. If a company is unprofitable on a quarterly basis (or is unprofitable for one year) this isn't necessarily a bad thing, but if there is structural unprofitability the long term prospects for the company are not good; because the company can not sell enough products at a high enough margin to make a profit this year and builds up debt, which means they have to sell more products next year at a higher margin to service that debt which is unlikely if you're already struggling.
Now, as for licenced games, do you remember how many licenced games the Gamecube or XBox received last generation? It was (somewhere) in the range of 10% to 25% as many licenced games as were released for the PS2. The reason for this is simple, while most licences give a publisher the rights to create games based on the IP for all platforms very few IPs have the expectation that every game is released for every platform. Even if refusing to publish a game on a platform meant that you lost rights to that licence on that platform, you don't lose rights to the game that you funded the development of, which would mean that anyone who took up the licence on that platform would have to build a new game from scratch; and how excited do you think a large publisher would be about funding the development of a licenced game for one platform when the sales of that platform are less than amazing?
