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Mifely on 08 July 2008
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Ail said:
bumidan said:
@ Ail

I'm not quite sure I understand your points. The analysis is for profits and losses are based on Sony's numbers.

Costs associated with running these business are already reflected in these numbers. The numbers we are trying to analyze are NET profits or losses.

1. The game division numbers are reported for everyone to see. Revenue and losses are there. This includes all the costs associated with the gaming division, including all the ones you've mentioned.

2. Game development in general should already be reflected in the game division numbers. If not, where would Sony put it? You can't just leave out figures in your public statements. Also, the analysis incorporates a long enough time frame to include development costs and average them out. This evens out in the medium to long term.

If Sony is developing games every year, then every year they would have software sales to record that were developed the previous year, so everything will balance out over time.

3. As mentioned in previous posts and in No. 1, net profit/loss takes into account everything, including marketing costs.

4. I have never seen MMOs ever mentioned in any Sony financials. Therefore the logical conclusion is that the figures (sales/costs) for these are probably not "material" in the financial sense. Unless it is in a separate division or company all together.

I hope that clarifies some of your questions and concerns.

MMOS are part of SCEA which is part of the gaming division.

Their costs are significant as if you add every MMO managed by Sony you probably reach 1 million subscription which is 1/10th of Wow.

I disagree with you on development of games since the release of PS3.

If you look at Sony first party studios they have released very few titles since the release of the PS3 as most of them shifted to develop for the PS3 and they don't have the advantages of Multiplatforms developers able to release titles on several platforms.

Like I seriously doubt the revenue brought by Uncharted, GoW Chains of Olympus and GT5P covered all the development costs for 2007, even less for 2006.

First party development is even more cyclical than third parties , I think it's a fair assumption that for the 2002-2005 period those studios contributed positively to Sony bottom line and negatively for the last two years.

With the uncoming releases on the way it's probably a fair assumption to say they will soon start to contribute positively again to the bottomline ( and your methodology would imply that the cost of making the PS3 decreases when development studios start to make a profit..). The cost associated to the PS3 mgiht chance but the loss/unit doesn't.......

In the end what I disagree is you ending your analysis by computing a loss/unit which most people will use to deduct that if Sony sells X more units the loss will be loss/unit *X.

I can agree with rolling PS3 third parties development costs under the PS3 profit or loss but not when it comes to computing a loss/unit which is really a thing we do not have enough information to compute...

 

 

Actually, SCEA and SOE are two completely different companies. SOE is a part of Sony Pictures, whereas SCEA belongs to Sony Computer Entertainment, Worldwide. The MMO profits of SOE have nothing to do with SCEA whatsoever.