Nintendo "laughed their assess off" when Microsoft tried to acquire the company in 2000

[Darwinianevolution]

Farsala said:

Darwinianevolution said:

Those numbers always confuse me. How did Sony manage to earn less money than Nintendo when the PS2 sold more than the GBA and the GC combined by so much? Hell, it's not even a small margin, between 2004 and 2006 there's a significant difference in profits. I get that Nintendo's 1st party titles sell really well and are very profitable, but by that much?

I will give you the run down.

Between 2004 and 2006 Sony had significant R&D for PSP and PS3. There was no handheld before the PSP so any money used to make that was just straight losses. PS2 was trying to cover for the PS3, but as we know the PS3 was a very expensive console to make. You can see even the PS1 era was more profitable than the PS2 era due to R&D for the PSP and PS3.

PS2 only got such high sales due to it's extremely cheap price. We can see Sony completely shift their mindset with later years PS4 getting 0 pricecuts, and thus more profit than the PS2 days. But it won't outsell the PS2 anytime.

And it is true that at that time Sony's first party SW didn't sell that well aside from Gran Turismo.

So the developing costs of the PS3 were that expensive? The hole the PS3 made in Sony's finances trully was monumental, I cannot recall many products that costed so much and lost so much money. I can't imagine Sony's gaming division being able to justify itself without the PSP's help after that.