The "LoZ is better because it makes a lot more money" argument doesn't work quite as well as people think. That's because the goal of each company is different.
Last edited by pokoko - on 26 August 2018
Nintendo has a bit of a walled garden. Their software marketplace is much less crowded, perhaps by design. Nintendo's goal is to sell Nintendo software. That's how they make their money. They keep high margins and seek more profit per individual customer. They are willing to accept less overall users in exchange. This philosophy goes all the way back to the NES days, when they'd short production of third-party games so they wouldn't compete with their own titles.
Sony's goal is different. They want volume. Lower margins and even isolated losses are fine if they can bring in more revenue. That allows them to tap revenue streams from subscriptions, services, and royalties. They target a broad range of consumers, which is why they encourage a crowded marketplace even if it impacts the sales of their own games. They've said before that many first-party titles don't bring in much profit individually. They're willing to exchange that for a more attractive ecosystem. They care about the quality of their first-party titles, obviously, but they're willing to leverage their properties for the overall goal. It's generally a balanced approach.
Microsoft is essentially the opposite of Nintendo. They don't really care about gaming hardware or even about video-games at all. That's just a means to an end. That's why they've found themselves in such a hole from a first-party standpoint, actually, because they thought they were in a position where they could coast on what they already had. All they really care about are subscriptions and services. They'll gladly cut hardware margins down to nothing for the sake of volume. Hardware margins are pocket change to them, anyway, in financial terms. They want that long-term human-revenue-stream that's tethered to their ecosystem.
Different companies use different methods to achieve different goals. Amazon, for instance, was once scorned for focusing on revenue over margins but it kind of worked out okay for them in the end. Apple, on the other hand, puts margins above all else and it worked out pretty damn well for them, too. Comparing individual aspects of different companies won't really tell you much without considering the larger picture.