Over the past couple of weeks, several publishers have released their quarterly earnings reports: among them, Electronic Arts, Ubisoft and THQ. Apart from a title slipping its ship date from one quarter to the next, there were few surprises to be found...except for the fact that of the three publishers listed above, two of them declared that the lion's share of their console revenues had been derived from the third-place platform: Playstation 3. Electronic Arts gave its breakdown as 17 percent PS3, 10 percent Xbox 360 and 7 percent Wii. For Ubisoft, it was 21 percent PS3, 9 percent Xbox 360 and 11 percent Wii. (THQ was the exception, with 4.8 percent PS3, 14.6 percent Xbox 360 and 17 percent Wii.) How could this be, given the installed base lead that the first-place Wii and second-place 360 currently possess over the PS3?
For an answer, we turned to Wedbush Morgan analyst and The Who's number one fan Michael Pachter. Here's what he had to say in our email exchange:
In recent earnings reports like EA's and Ubisoft's, a breakdown of revenue by platform shows that PS3 is outstripping 360 and Wii. How do you explain the discrepancy between the installed base advantage that Xbox 360 and Wii have over PS3 and the revenue superiority that the PS3 is demonstrating for EA and Ubisoft?
Two things are at work. First, the way deferred revenue works: EA recognizes revenue on Xbox 360 over six months following the sale, but does NOT do so for PS3. So sales of Xbox 360 games during the last two quarters (Battlefield: Bad Company and Army of Two) are rolling through till December, while sales of PS3 games are booked when sold. Second, some of EA's sales are skewed in Europe, where UEFA Euro 2008 and Battlefield probably sold a little better on PS3, and with Rock Band launching in Europe this year (also skewed PS3). Ubisoft was because of Haze, which was a PS3 exclusive.
I don't think a single quarter represents a trend. EA won't be that way when Madden shows up and when the deferral starts to lap itself.
There you have it, folks. Objects in the mirror are, for the time being, not as close as they appear.
http://www.blog.newsweek.com/blogs/levelup/archive/2008/08/04/pachter-on-apparent-ps3-dominance-among-third-parties.aspx
All makes sense here especially when you look at the last year and the 360 is pretty much double the PS3 in earnings for EA. It all catches up in the end. Although I'm not sure why the two consoles sales are treated differently.
