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theprof00 on 15 May 2011
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scottie said:

Either consider profit or sales numbers. Revenue is simply a way of skewing the data to make it appear to fit a particular point.

 

If you want to consider it as "Is Sony happier with the PS2 or PS3", then you should consider the profitability of the two consoles.

 

If you want to consider it as "Which would VGChartz say did best" Then you should consider sales figures.

 

What does comparing revenue actually achieve? Convince me to care.
MaxwellGT2000 said:


Couldn't really state it better myself... revenue total doesn't mean jack shit in the business world unless it's more than what they're paying out, the only light you gain from this info is that you're not hurting as badly as you could be...
Mr Puggsly said:

Mmmhmmm... so the significantly higher priced hardware generated more revenue?

Not sure what to make of this information.
Kynes said:

Revenue means nothing without profits and a healthy business model. This generation has been an example of what you need to avoid in any business, as Sony has:

  • higher costs
  • higher revenue (this isn't bad per se, but when you consider the other factors, it's a bad thing in this situation as Sony hasn't profited with higher revenue)
  • lower profit margins
  • lower market share
NiKKoM said:

Isn't that actually worse... with all that Revenue they made on the PS3 and in the end the gigantic losses they made..

"Both these figures are useful in determining the financial strength of a company, but they are not interchangeable. Bottom line describes how efficient a company is with its spending and operating costs and how effectively it has been controlling total costs. Top line, on the other hand, only indicates how effective a company is at generating sales and does not take into consideration operating efficiencies which could have a dramatic impact on the bottom line. "

I want you all to think about something in a metaphorical way.

PS3 revenue on hardware is consistent with revenue on hardware for the ps2. Imagine that net profit doesn't exist.

PS3 hardware revenue is on par LTD with PS2. Healthy or unhealthy? Don't even bring up profit. Just answer that question.

Yes, you're right it's healthy.

Then we run into the problem of profit. Sony sold every ps3 at a huge loss. So how do we interpret the data?

Customers are pound-for-pound buying as much playstation as they did before while Sony is losing money.

  • Now, are they buying because it's a huge bargain? Is it like a blowout sale at a supermarket where everything is 50% off and the market makes huge revenue but little profit? Hmm, given that there are two competing consoles for half the price (average since release), one with very similar graphic level, I can't honestly think of a motivation that would make someone buy a ps3 simply because Sony was giving it at a very good price.
  • Are they buying it because it's expensive? No, that's not the case.

So, there is something that is making people spend just as much on ps3 as on ps2.

Haters, if you can figure out why, then the day is yours. For me, I think it's because the playstation product, for the consumer, is healthy. And I think it will go on to sell 24M when price drops to 200$. Especially in a year as packed with hits as this one. I think their "top line growth" is just as important.

Lamborghini does produce the same kind of revenue as toyota.

You gunna tell me revenue doesn't matter?

Equal revenue over the course of ten years means the strength of the product and the brand is just the same as it was. Playsation hasn't lost anything other than marketshare, except, for all the non-haterz out there (=P) PS3 pricing and sales based on price of the ps2 is equal. When ps3 reaches ps2 price levels we could see a new ps2 sales behemoth in the ps3. If the strength is equal and the total sales are higher, total sales will be higher.