Vena said:
huiii said:
Wow.... you're not serious are you?
Revenue =/= Profit
Profit = revenue - expenses
So if Ninty drop the console buissnes they make less revenue but also have less expenses (and considering the wiiu is or was sold at a loss the drop in expenses would be bigger than the revenue loss so profits would grow (or at least the retability would)).
i say this in every thread about finances and stuff but people need to get a clue about accounting before they go posting stupid stuff.
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I am talking about profits, so don't make baseless assumptions. You should go look at their last 20-30 years of financials if you don't think that their hardware is a massive part of their profit margins as well as a synergistic machine for their software profits on which they earn 80% of the proceeds or, if digital, 100%. If they go third party all of that literally goes out the window.
Money lost on R&D is next to negligible over all. The rest of the money spent still has to be spent whether they are first or third party, and now they have even more expenses including having to pay licensing fees and tool kit fees which will eat up another 5-7$ a pop on each sale. Suddenly their profits per sale on software goes from 80-100% to 20-40%, if that.
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"They'd likely need to see a several hundreds of percents increase in software sales over their Wii software sales to see profit. At all."
Is what you said. And while i admit that i didn't think of platform royalties (which make~10% of a 60$ game) if they really need a "several hundreds of percents increase in software sales over their Wii sales to to see profit" then they are doing something wrong. After all every other publisher can make a decent profit without even haveing a fraction of nintendos wiiu software sales. So yes i call bs on that post.
And instead of looking at the financials of 30 years ago you should maby look at the more recent ones. Sure Nintendo made a lot of money on hardware in the past (and probably still does form the 3ds) but this doesn't change that they are reporting losses now.
Plus what i said in the post you quoted still stands. Just add the royalties and such into the equation (which i did overlook). But just subtracting hardware revenue and saying porfits will be less by that (which is what a lot of people in this thread seem to be doing and i thought you meant as well, if you didn't then sorry) is just all kinds of wrong.