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Biggerboat1 on 01 February 2019
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last92 said:

 

Biggerboat1 said:
An obscure football manager in Scotland once said this in a televised interview "statistics are like mini-skirts - they look good but hide the most important part"

Not saying it's the best quote ever but stuck with me for the sheer randomness factor.

I think it applies here, PSN could have more revenue than Nintendo, but how that actually translates to profit is unknown and is really the only thing that matters. Revenue for show, profit for dough!

Actually, how revenue translates to profit is very straightforward, there are very simple formulae depending on the accounting standards the company complies to.

Also, it's not statistics that hide important information. It's just that there are many people that are unable to understand and interpret the numbers.

Ehm, not really understanding your point here...

If Company A has a revenue/turnover of 100K and 10K costs & Company B has a 100K revenue/turnover and costs of 90K then Company A is in a muuuuuch better position (90K profit) than Company B (10K profit), even though their revenues are the same.

So 'translating' revenue to profit has nothing to do with a formula, but on subtracting your costs... Unless by a formula you mean Revenue - Costs = Profit, in which case I agree. Though that would suggest that you misinterpreted my use of the word 'unknown' in my previous comment. It is not because I don't understand this basic principle but that we only know PSN's revenue, not it's costs, and therefore not it's profit, and therefore the we're stuck with the mini-skirt...

Unless my understanding of the word revenue is incorrect, in which case I apologise in advance :)