Where are the sources that Sony making tons of monies on PS4?

[Baalzamon]

DerNebel said:

drkohler said:

pezus said:

Baalzamon said:
Just want to make sure people know how accounting works regarding ps+ as well. When sony sells a $50 subscription, only the amount earned is recorded as revenue. So if a 50 dollar sub is sold on December 1st, only $4 is recorded as revenue...the rest is actually a liability. The increased revenues will stay up whether people bought a 3 month or a 12 month subscription.

That's the first time I've heard that. Are you sure about that? And why would they do it like that, when it's essentially a one-time fee just like a game?

Hold on for a minute: You actually understood that gibberish? For me it sounded like if I get $50, I only get $4 and the rest I actually own to ??

I believe what he means is that when Sony gets $50 for a 12 month PS+ subscription they only account the part of the 12 months as revenue that have already passed, the rest is accounted as a liability since Sony haven't completed their part of the deal and provided a working online network for those coming months yet.

So as an example when someone get a 12 month PS+ subscription on December 1st and the quarter ends on December 31st, only 1/12th of the $50 is actually accounted as revenue, because Sony has only fulfilled 1/12th of its part of the deal. The rest is accounted as a liability cause they still own the person 11 months of PS+.

In the coming quarter Sony then accounts the next 3/12th of the $50 as revenue and so and so, until the 12 month contract is completed.

I guess that is what he had in mind, that being said I have no idea if this is really how it's done with PS+ or Xbox live.

This is exactly what I was trying to say. Now, Im making some assumptions as Japanese accounting rules are different than ours, but i'd wager they are the same regarding this. As for microsoft, they have no choice, FASB says they can only recognize revenue as it is earned (ie once they have provided the service).