Eurogamer: Wii still over PS2 in sales

[KungKras]

Squilliam said:

KungKras said:

And why does that make revenue important at all. If you spend tons of money making a game and it doesn't sell, you have massive revenue, but negative profit. Whereas a small budget title that breaks even will be sucessfull even though the revenue was small.

All revenue will tell you is where companies put most of their recources. Why is this important? Just becuase a market has bigger amounts of cash flowing through it one direction or the other doesn't mean anything when profits and other factors, like number of customers are not taken into account. Even the analogy you made was about profits and not revenue (It's harder to profit with a cheaper price tag).

So I ask you again, why is revenue important?

Revenue per game matters. If you can sell a game for $60 vs $40 on the Wii it makes a significant difference. Once you take away publishing expenses and retailer margins the actual margin per game sold @ $40 is aproximately half that of the game sold @ $60. If you were making 2* the margin on the HD consoles and selling aproximately twice as many copies on top of that then it would explain your desire to continue selling those kinds of games.

But that is also, fundementally about profit. It's a no brainer that selling games at a higher price gives more profit, and simultaniously more revenue, if all other factors such as publishing and manufacturing and development remains constant. (Or are we talking strictly about revenue with the development out of the picture?)

but when looking at a market's health at a macro scale, as I said, profits are of the most interrest, because that's where the sucess of the business lies.

When looking at the biggest picture, and taking development costs into account, you have high development costs and high margins on the HD consoles, so it may balance out, it may not. My point is, with things looking that way, when looking at revenue of course the HD console graphs would be much higher, because more cash flows through those markets, but it would be misleading when gauging how sucessful the markets are. That's why I think "Those graphs would look different if Nintnedo dared to show revenue" is a misleading statement. Of course the graphs would be higher, but they would not have much information. Revenue could come only from companies expenses and not from sales.

A chart with revenue/Profits chart/(Profits - revenue) graphs for each software market would be interresting though, since it would measure both how much customers spend in each market plus how sucessful the software businesses are.