Ah, see, now I forgot to include PSP development costs. PS2 probably did make more money then jsut as a division they lost.

Fair enough. 

 Sony has alot of games, if you look at the numbers for published games from Sony on the PS2/PS1 they sold more then Nintendo did on the N64 and the GC. 

bbsin or Saiyar>

can you tell me where in the annuals reports you can see the profits/losses for the videogame business ?

I have done the same thing a year ago but the only numbers i could get were the operating income: impossible to find net profit.

thanks

bbsin, That's a nice update. Here's a graph for the same data a posted some time ago, albeit in Yen. The third graph shows profits in the PS2 era. ioi,

Could you put those figures (quarterlies of SCEI, Microsoft Entertainment and Nintendo) into a database on vgchartz, pretty please? Would be very useful.

bbsin,

You said that Nintendo made 40 % profit on hardware compared to software. That's not true. What you can see in financial report are revenues, not profits. You assume that the Wii has 20 % margin (which you can't prove by the way). Nintendo's overall operating profit is above 20 % however. Therefore software margin will be better and total software profits will be just as big as total hardware profits.

bbsin,

Old Nintendo quarterlies are here:

http://www.nintendo.co.jp/ir/en/library/earnings/2000-2002.html 

Please post more often!

The PS1 had a longer lifespan than the PS2 so far. Sony claimed it had a 11 year life span, I thought.

The PS3 related losses so far are definitely disturbing.  They've come half way to wiping out all of the profit Sony made with the PS1 and PS2.  Let's hope BD doesn't fail to catch on or it could have been a very expensive gamble for Sony. 

 Actually I'd be suprised if they don't move in a direction similar to Nintendo next generation.  Nintendo is the only company making huge profits and eating up the market share.  I expect both Sony and Microsoft to scale back the power and size of their systems next gen and make them more mass market than they are now.  They'll likely still be more powerful and expensive than Nintendo's system, and still have a mostly hardcore focus though.  I don't think there'll be as large a gap next gen though.  Microsoft in particular will have to do something to increase intrest in the Xbox, because even though it's been successful this generation, it's beggining to slip and could end up in third place.  Which would be embarrassing at the best, and damage faith in the Xbox brand at worst. 

1. You're confusing revenue with profit, as reverie mentioned.

2. Hardware revenues are software revenues when you bundle a game with your console in two major markets and charge more for it there than you do in the unbundled market. A Wii in Japan is about 10% cheaper ($25), and that accounts for a major piece of that $50 you keep trowing around. I'm betting that the revenues from bundled Wii Sports get tossed in the hardware column on these finanical reports anyway, though.

3. If we assume your $50 profit per Wii number, Nintendo would only have to make $10 per Wii game sold to make just as much profit off of their Q2 '08 software sales as they did off their hardware sales. Since Nintendo's getting the developer's, publisher's, and licenser's share of software sales, I think $10 of profit would be a severe underestimation considering that Nintendo makes so many multi-million sellers.

If you want to assume that Wii's are making $100 of profit now, that just means those games have to be worth $20 each, which seems quite possible to me.

4. Historically, I doubt Nintendo was making more profit off of $100 Gamecubes than they were off the millions or copies of Smash Bros, Mario Kart, Sunshine, etc. The Wii is somewhat of an anomaly in that Nintendo have not needed to thin out their profit margins on the console in order to promote sales.

5. You're correct that the value of controllers and other peripherals muddies the water in trying to make a comparison between hardware vs. software. And I'm not seeing any numbers in these reports which would clear that up. Is a Nunchuck sale files under 'Console' or 'Others?' Your guess is as good as mine. Same goes for the margins on these sold accessories.

6. As you yourself point out, Nintendo is just now coming out of the transition period where their new hardware is being adopted. As the userbase grows, the ratio of hardware sold to software sold will shrink. This is only the first ~20% or so of the Wii's lifecycle, and software will be getting more and more profitable as it goes on.

This TLDR post brought to you by: My Friday @ Work.

@famousringo: Honestly... And how much money do you think Nintendo makes off of every DS? we're not just talking about 20 million Wiis here. 66 million DS with a probable plus 50-65 USD profit return. Do the math and tinker around with the net income they already have since 2005. It ain't hard, it's Nintendo's business model, they've been doing it for years. Their strategy is to make the bulk of their money off of Hardware and try to sell their hardware to a broader casual market. It wouldn't work for software because each casual consumer don't buy alot of games, most people with Wii and DS are satisfied with WiiSports or brainage alone.