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Forums - Sales Discussion - PSN Alone Generated More Revenue Than The Entirety of Nintendo, MicroSoft's Entire Gaming Division!

Farsala on 01 February 2019

 

RolStoppable 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!                             

The following numbers cover April to December 2018, as opposed to the entirety of calendar year 2018 like other numbers in this thread. I am being lazy and can't be bothered to search for the missing quarter that is accounted for in different financial reports.

Sony operating income - 247.2 billion yen
Nintendo operating profit - 220.029 billion yen

Sony is predicting ~300 billion yen for the end of the FY. And even though Nintendo is at 220 they only predict 225?



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kirby007 on 01 February 2019

That means they lose quite big on everything else



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Agente42 on 01 February 2019

 

PortisheadBiscuit said:
Would love to see an assests vs. liabilities graph too..

net profit?



Ljink96 on 01 February 2019

 

Hiku said:

 

Ljink96 said:

 

What you're saying makes complete sense, what we need to know is profit of the entirety of PSN for this to even mean much.

Does anybody know if we ever get net profit or operating profit for PSN specifically in Sony's Financial Reports? The Feb. 13th is when we should get that info if it's included. 

Though, my guess is it was still more profitable, but I don't mind being proven wrong. 

Well, that aside I want to point out that comparing a fairly straight forward online service platform to a company like Amazon is not a good comparison to make. @Biggerboat1
Amazon often invest their own money into the products they sell. New games and consoles for example, they buy them in bulk for a certain price, and then sell them to consumers at a higher price.
They're reliant on how much they sell, after they've invested money into the product. And if it doesn't meet sales expectations, they may lower the price, etc.

Very different from how Sony sell games on PSN. Sony don't buy in any quantities of the games they sell through PSN. They just host the digital data. Whenever someone downloads a game from their store, they simply take a cut of the sale. Whether it's millions or thousands of copies, they didn't invest an amount of money corresponding to that number.

The costs are instead things like servers, maintenance, bandwidth, R&D, etc. And paying for the games that are offered Free through PS Plus.

So it stands to reason that their profit margins are generally a lot closer to their net profit when it comes to sales, due to the nature of PSN. Unlike Amazon where that can vary a lot depending on what is sold, and who is selling it.

Well sure, the underlying data behind comparing Amazon itself to PSN isn't on solid ground, but I'm stating the obvious that we need to know both Revenue and Profit to make a decent comparison as revenue is only half the story. I just want to know profitability of PSN but I don't think Sony gives that kind of information out, to my knowledge they only divulge into gaming division as a whole in terms of profitability as yes, Sony only takes a cut of all transactions on PSN (i.e. digital software, movie rentals, PSNow, etc.). Either way, I'm anticipating revenue and profitability to surpass Nintendo as there's more avenues to generate revenue than Nintendo is exploring.



PortisheadBiscuit on 01 February 2019

 

Agente42 said:

 

PortisheadBiscuit said:
Would love to see an assests vs. liabilities graph too..

net profit?

A comparison of all 3 companies 



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Naum on 01 February 2019

Revenue yes but what about the Profit?



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ArchangelMadzz on 01 February 2019

 

Ka-pi96 said:

 

twintail said:

 

It is obviously Sony's part, this is their revenue and stated from their financial report.

I don't get how that's "obvious". The rest of the money could still be considered revenue by Sony, them having to pay it over to the publishers of the content doesn't change that.

It's from their financial reports. They can only report the revenue they receive. The can't include money that Activision made to their own investors.



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Robert_Downey_Jr. on 01 February 2019

So it's almost as big as the other two combined? That's crazy! I'm not surprised this was the case before Switch but damn even now that is impressive.



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abronn627 on 01 February 2019

 

Hiku said:

 

Ljink96 said:

 

Well sure, the underlying data behind comparing Amazon itself to PSN isn't on solid ground, but I'm stating the obvious that we need to know both Revenue and Profit to make a decent comparison as revenue is only half the story. I just want to know profitability of PSN but I don't think Sony gives that kind of information out, to my knowledge they only divulge into gaming division as a whole in terms of profitability as yes, Sony only takes a cut of all transactions on PSN (i.e. digital software, movie rentals, PSNow, etc.). Either way, I'm anticipating revenue and profitability to surpass Nintendo as there's more avenues to generate revenue than Nintendo is exploring.

Yeah it was more of a reply to Biggerboat1. Basically that whenever they sell games or DLC, whatever they get from that transaction is pretty close to pure profit, aside from things like server and bandwith costs.
But the main question is if the entire $60 of a game sale is counted as their revenue here. Or if the revenue is only referring to their cut.

The entirety. When they speak of revenue generated on their platform it’s the amount of $ spent on their services, not the the actual gross margin they made on each download. If a customer buy FIFA at 60$ on PSN, it’s 60$ of revenue, the cut they take as a “retailer” is part of the profit margin generated by the service.

In other words, it’s exactly the same way a retailer like GameStop operate.



Drakrami on 01 February 2019

 

Darwinianevolution said:
I'm not sure if this model is going to be sustainable. Games as service and the proliferation of suscriptions will eventually burn people out, not everyone has enough money to pay for all the subscription entertainment demands nowadays. The fact that, after years of paying for stuff you still don't own anything is just the cherry on top.

 

Who are you trying to kid? If anything, it is going to continue to grow with streaming being the main focus moving forward and digital games being the norm instead of physical. This is why Gamestop is going out of business, PSN is taking their pie.