This. This is why you can't judge success off profitability alone. You can be extremely profitable if you have few employees and no retail supply chain to feed. 

I understand your first point, marketing is another big one. Companies fold all the time though while making revenue.  Revenues and a healthy business produce a consistent profit ergo why profit is typically considered more important than revenues.  The PS4 generating profit alongside the PS5 doesn't negate the fact they were / are selling consoles at a loss and the take on 3rd party software is lower than first party software.  Looking at Nintendo they are not and normally don't take a loss on hardware AND the percentage of software sales for first party titles is higher.  They are making more money than Sony's game division.

If you don't want to look at the CURRENT market leader then, (if the chart I posted is accurate) add up the profit from all the Sony consoles and add up the profit from all of the Nintendo consoles and tell me who is the market leader, then you won't be looking at console vs console.  That would be akin to an all time market leader. 

Not trying to take anything away from Sony I have bought all their consoles except the VR and PS5 Pro but when it comes to running a Video Game business it is pretty easy to argue that Nintendo has been doing it longer and knows how to profit from it better than Sony. With that and all the other market leader criteria Nintendo is able to check I would consider them the current market leader.  If we go by revenue and revenue only then sure Sony wears that hat.

@konnichiwa Valve is killing it and I will take your word for it that in the metric of Profit Per Employee they are the king of the Video Game business but if you look at the chart I posted earlier the big three are profiting in the billions and would probably think 19 million is cute. Wait a tick where did you come up with 19 million?  A quick search said they brought in 5 billion in 2023 at 40 points which would put their profit for that year alone at 2 billion.  400 employees would only be 5 mil profit per employee not 19.  That is still stellar. Sorry I guess I didn't take you at your word but 19 million total profit just seemed way too low and I looked anyway.

For me, in the next generation, it's GTA6 on Switch 2 or not at all.

Well you are changing things up.  We were talking Market leader. Neither of us ever argued that Sony or Nintendo were not successful.  Many would say you can judge success off profitability. Both Sony and Nintendo are successful.  Even Microsoft is successful in the Video Game space - just not as dominantly successful as I'm sure they would like to be.  In konnichiwa's example Valve is getting the most juice for the squeeze. He isn't saying they are the market leader.

Sorry I am derailing and it is mostly a game of semantics.  We are lucky to have 4 big players in the space that are all making money overall while also producing consoles.

But Valve is indeed the king of videogames though

They dominate the PC software market, which is almost as big as the Big 3 console market combined. 2 billion in profits in 2023 is crazy, and their market position is much more stable than Sony or Nintendo and they simple need to keep their store and services. The fact they are private owned is very telling, they have zero need of external capital

Whether intentionally or not, invoking phrases like “officially speaking” introduces an appeal to authority fallacy, specifically a fabricated authority. This form of sophistry aims to lend undue credibility to an argument that lacks substantiated backing. The crux of the issue here is your conflation of platform market share with company revenue share. While revenue share may be synonymous with market share in investment contexts and 1:1 comparisons, that's not the case with the video game industry.

Market leaders in the video game industry are calculated the same way as other electronic platform markets, by user base of the platform. In the video game industry, this is calculated by the unit sales of the current consoles.

As has been pointed out, revenue is not used for this purpose because it includes diverse and unrelated streams—such as services, investments, accessories, legacy platforms, sectors outside the core market, and even products on competing platforms.

In other words, the Switch is considered the market leader because it has the largest number of owners and players within the dedicated gaming console market, measured by total unit sales. Company revenue, while indicative of financial success, does not reflect platform leadership in the market.

Actually, this post is a great way to illustrate the points made in my previous post. If you go by revenue rather than unit sales, then you could argue that the Steam Deck is far more influential in the dedicated console industry than it actually is because Valve's revenue is so high. But Valve's revenue in no way indicates that the Steam Deck is the market leader, or anywhere close to it.

Going by your logic, Smartphones is market leader for gaming because that's that's where the biggest numbers of players is. Can't go by that metric alone. Also, what's wrong with including legacy platforms? Why disqualify the PS4 from contributing to PlayStation's success when it still generates Sony 100's millions a year. Same will happen with the Switch when Switch 2 launches. There is no need to disqualify legacy platforms. 

I did a quick google search and it suggests Valves yearly revenue is sitting at around 7.5 Billion. So in revenue they are still 4th place.  

Of course Nintendo forever, they're the reason you and I started playing games.

Sure Yamauchi was a proud man, but were it not for his policies the NES would have never worked. Anyway he died and other people took over and adapted, and in that adaptation Nintendo learned to rely on itself so as to not be strong-armed by 3rd parties and it worked. Truth is Nintendo has been an IP titan since day 1 and survived N64 to Switch, as well as GBA to Switch, sometimes entitely, otherwise in great majority thanks to trusting in its 1st party work. And look at where they are today. And look at where the competition is today, fighting over 3rd oarty exclusivity. Good luck to both of them but my faith is always was and always will be in the Goat.

https://upptic.com/valve-structure-employment-numbers-revenue-revealed-in-lawsuit/#:~:text=Valve%27s%20revenue%20per%20employee%20is,significantly%20lower%20revenue%20per%20employee.

In a stunning revelation, data from an antitrust lawsuit against Valve Corporation, filed by Wolfire Games, the developer behind Humble Bundle, has shed light on the inner workings of the gaming giant. The lawsuit alleges that Steam, Valve’s digital distribution platform, holds a monopoly on PC gaming. However, the most intriguing aspect of the leak is the improperly redacted data that has surfaced, offering a rare glimpse into Valve’s employee count, pay scales, gross margins, and commissions.

In 2021, Valve reportedly employed 336 people, with a mere 79 dedicated to Steam, despite the platform’s release of over 10,000 games that year. This starkly contrasts with Valve’s estimated annual revenue from Steam, which stands at an impressive $8.5 billion. The largest team within Valve, comprising nearly 200 employees, remains focused on game development, while the hardware division, recorded at 41 employees in 2021, has likely grown substantially following the success of the Steam Deck.

Do you have a game you’re trying to grow? Reach out to see how we can help!

Analysis of Valve’s structure and revenue

Interestingly, the average salary for a Valve employee in 2021 was an astounding $1.3 million. Valve’s revenue per employee is estimated to be around $19 million, potentially making it one of the highest revenue per employee companies globally. For comparison, highly profitable companies like Apple and Google generate significantly lower revenue per employee.