As much as I love seeing sales figures and reading the discussions they prompt, we all know that profit is what it's all about.

Apologies if someone has already posted this link, I've been away. 

http://gamerinvestments.com/video-game-stocks/2008/05/30/playstation-2-may-have-won-last-generations-sales-battle-but-it-lost-the-console-war/

Although you raise a valid point, it overlooks the role that the actual games themselves play in deciding the outcome of a generation. A higher userbase attracts support from developers which means more games for consumers. IMO software is also a important indicator of success which profit from hardware sales has absolutely nothing to do with.

But yes, if you only take profits into consideration, then Nintendo beat the PS2 last generation. Of course, big, diversified companies like Sony and Microsoft are able to absorb such heavy losses.

Yea, because the GBA/DS had totally no influence on profits and R&D costs of the PS3 were $0.

I'm sorry but we can't see anything about what PS2 and GC alone did in that graph.

I don't care which company makes the most profit since i do not benefit from them. All i care about is which console gets the best games and that almost always is the one which sells the most as Xponent said "A higher userbase attracts support from developers which means more games for consumers. "

 im going to second this.  the wii hasnt beat out the ds is profit yet, and the gba was just a beast.

although sony got a big boost form the ps1, the ps3 costs were probably way bigger. 

Those graphs are quite misleading. From what I have heard (and don't ask for sources, I don't have any) the PS2 beat out the GC in profit but it wasn't by the massive margin you would expect from the sales.

This guy has pretty impressive sources, so you'll have to excuse me if I believe him over some source you think you might have read somewhere once. ^^  

No wait, do the numbers in this article include the GBA? I suppose it's very possible that PS2 > GC, but GC+GBA > PS2.

 Tis what I meant. I wasn't questioning his sources, merely his use of them.

 "Statistics are like ladies of the night. Once you get them down, you can do anything with them."

@ Parokki )

As far as I know Nintendo doesn't release reports divided into what profits their handhelds/consoles do and I highly doubt the author had any non-public insider data, so I think we can be 99% sure, that the numbers always include the handhelds.

I have to agree with those who pointed out the role of hand-held in those numbers but I also think that the article and perhaps more so the graphs themselves illustrate very well why Nintendo can come in last in back to back generations and still be happy with the results while a company like MS and Sony probably wouldn't be able to.

I'm fairly confident that if MS doesn't see good headway being made in the console market by the end of the next generation they will look for other opportunities. While they are able to absorb the costs and weather the tough spots there is always another way they could invest that money and if 12-15 years in a market isn't sufficient to become an industry leader with the kind of money they've poured into it already then I doubt they will see cause to continue.

If MS does make progress it could very well be at the expense of Sony, although I do doubt Sony is headed anywhere soon even if that is the case since they already know they can be extremely successful in this market. However in the long term even Sony will need to make adjustments if they are going to stay in the market.

I think ultimately this generation has shed a lot of light on why Nintendo is a tough competitor in this market and I would hope Sony and MS are taking some notes. Nintendo holding themselves to a product that is profitable from day 1 obviously has the advantage of being profitable but it also has a weakness of limiting what can be done within the scope of what consumers are willing to pay. As a result they are limited compared to MS and Sony who are willing and able to go negative to achieve success. In short they have a great advantage in the potential value proposition yet they have been unable to leverage this advantage so far. That is something that they should be looking at for the next generation already, and we should see what they've learned in 2-4 years at E3.