thanks for the information. very interesting.

last year was brutal for SCE. Hope it wont repeat ever.

Personally, I'd love to see MS and Sony try Nintendo's tactics. It is, quite frankly, the only tactic that has ever proven to be fail-safe. And it can result in enormous benefits when a hit console is released. The lack of technological prowess that would ensue would only really upset a small portion of the people who buy consoles.

NJ5: updated, and you were off by 215 million. But hey, Q4 hasn't happened yet so..

 how could you possibly want that? as a consumer, you WANT to buy things at a discount.  if MS or Sony can and is willing, let them push the technology.

You're right, I had forgotten about the loss in Q1. So in total, Sony has made about $2.5 billion from their gaming division. That's more or less what Nintendo is poised to make during this fiscal year alone, isn't it?

I can't check my facts right now because I'm on my cellphone.

I think Sony will lose around 100m for Q4 (Jan-March '08) - much lower PSP/PS2 sales, to less offset losses from PS3 hardware sales.

So fiscal '07-08 will end up around 1bn loss - first time has ever made losses two years running in their games division.

Both previous losses were relatively minor as well - totaling under 500m loss. The last two years will add almost 3bn in loss to the equation.

...

Sony/MS would *love* to emulate Nintendo's business model - but they can't. Nintendo makes money off SOFTWARE - Sony/MS make most off hardware (and licensing).

Neither of Sony/MS have the IPs to compete with Ninty - apart from a couple of big IPs (Halo, GT5, Everybodys golf?) - they just don't have the ammo. Only EA, Activision & Square Enix can get close.

 If everyone was in it just for a failsafe way of making profit, the industry would be in a big mess. Everyone would just try to spend the least amount of money to make the most appealing casual game.

As a consumer, I take quality of offering as well as price into account. If the product in question has sufficient appeal in both departments, then I'll consider getting it. And quality does not mean hardware specs, either; it has far more to do with control capabilities and software available. Nintendo's strategy has always been to provide the best possible experience for the lowest possible price, which neither MS nor Sony is primarily concerned with. MS and Sony currently care more about market share and third-party support than anything else, as their strategy relies on both.

Wrong way around. Nintendo makes most their money off of hardware, that's why they've never had a negative operating income. They (nintendo) gets roughly a $49 profit for every Wii they've sold and even more for DS. MS and Sony makes money based on the percentage of royalties and licensing generated from software companies and sales. Sony can emulate Nintedo's business model, but don't want to. They could have easily created a PS2.5 for $200 and sold MORE than the Wii at this point. As for Microsoft, their name in the videogame industry wasn't good enough after the Xbox so they had to push the technology and make a better reputation for themselves.

@Sky Render: The whole control thing of the Wii is still suspect. I've played bleach, nights, soul calibur legends, farcry and DQ on the Wii... needless to say the controls are downright atrocious. I would have to say MetroidPrime3 is the only game that uses Wii's motion control efficiently enough to bring an enjoyable experience. As for software... most the better software will end up on the 360 and the PS3. Developers don't like having limits on how to portray their art and there's just too many of those hardware limitations on the Wii, I'm obivously not saying all Wii games suck but most the games are either for casuals or shovelware.

 "Nintendo's strategy has always been to provide the best possible experience for the lowest possible price" -

More like they were forced to provide the best possible experience for the lowest price. They didn't have the money to get great GPUs or Proccessors before the Wii's success, so from a business standpoint it would be foolish to attempt to beat out MS or Sony in terms of hardware specs, media functions and visuals.