Btw, the Sony corporation tripled its operating profits from a year earlier.....so since the company is pretty healthy expect some good things from them, like upgrades to Home, good games announced, price cuts etc.

MS corporate on the other hand increased its operating profits but didnt even come close to doubling with respect to the same time period.

Holy ....wow...

I can't imagine investors are very happy with the Sony and MS game divisions.

@Dallas, on #3,

I think recently there was a post where it said PS3 is in last for new exclusives...not 100% on that, but I am sure Bod will know.

Sony doubled their profits, not tripled (pretty sure that's what you meant, looking at your second paragraph). 

It's interesting that you believe -- and I don't think this is a completely unfounded position -- that profits in other areas means more money spent on the PS3. In effect, you're asking for the rest of Sony's rather massive assets to act as a money-producing device for the Playstation 3. Clearly, Sony is willing to lose some money here in the hope/belief that they will make that money back later on; I just don't think it's a bottomless pit, as you seem to be characterizing it. Share holders would not be happy if Sony treated their company this way!

Let me paint this in a comical but realistic way, so that you can see what you're asking Sony to do here: "Hey, we made more money in many of our divisions. Rather than use this money to develop more camera technology, or to produce more movies, or more TVs, or our sound systems, or to increase our marketing in any of those fields, or choosing to save some of it to increase our comparatively small cash reserves, or even paying some of these profits back to our shareholders in dividends, let's spend it all on PS3 development, our least profitable sector over the last two years!" 

Is it possible they will choose to spend some of their profits on the PS3? Yes, absolutely. I think Sony is correct in believing that there is a lot of money to be made in gaming. However, they also can't treat all their other divisions as a simple Playstation 3 - money - providing device. Not only would that ultimately hurt their other businesses, but it would mean that Sony would not meet their financial expectations for the year, which is a very bad thing to do. 

The PS3 has done pretty bad with getting exclusives, up until the last month or month and a half ago.  Now it seems that almost all of the exclusives that aren't going to the Wii are going to the PS3 which leaves the 360 with not that much.  Anyway, i think that the 360 will have a chance pull out of its slump to a degree after they don't have to fix as many broken 360's but this will take a while.

No one is trying to say that sony's budgeting is a bottomless pit.  I am just saying that to the extent that Sony has brought in more money this year, they will be able to throw more onto the various parts of the company, including its gaming areas. 

 Secondly, I think that you missed the point that Sony's gaming division's negative profits are on a sharp decline.  This trend leads me to beleive that it will be making money, not losing it soon.

It would be interesting to see the overall money made or lost for each company over the past 10 years for the gaming divisions.

1. I specifically said in my post that I was discussing the last 1.5 years, or 6 quarters. In that time frame, Microsoft has lost 2.7 billion dollars, while Sony has lost 2.3 billion. Sony has lost less... but only 14 percent less, and that's including the extended warranty's billion dollar write off (MS would be way ahead if that write off weren't there, but it needs to be included). If Microsoft has lost tons of money, is hemmoraging, is doing terribly, then Sony is only doing slightly less terribly, and is only losing 14 percent less money.

2. Sony's losses are less severe this quarter for natural reasons; Jan-March is always the worst quarter every year. Look at last year; 525 million in losses in Jan-March 2006, followed by 213 million in losses in March-June 2006. In Jan-March 2007, they lost 914 million, followed by 300 million in losses in April-June. Sony's losses are up from this time last year, not down. Sony's losses will decrease even further as we approach Christmas, then plummet again at the beginning of the year. These things are cyclical -- it would be like comparing Christmas-time sales to sales in June. Does that seem fair? You have to compare on a season to season, and so far this year, Sony's gaming division has lost more money than they did last year at this time. A lot more.

3. This is incorrect. Microsoft has considerably more exclusives, as can be viewed here.

http://www.gamingtarget.com/article.php?artid=7252

You are correct that in the last week, Sony has seen more exclusives announced, but that's because they just had the "Playstation Premier," for which the whole point is to announce new exclusive titles. In general, Microsoft has both more exclusive titles released and more in development.

And how do you figure that MS has less money to spend to entice developers to produce games for them? I'm honestly curious how you reached this conclusion. Both are losing gobs of money in their gaming divisions specifically, so they need to look to their parent companies to help them out. Microsoft's overall profits are somewhere around 5-10 times that of Sony's yearly profits. Microsoft also has 7 times as much money in cash reserve, as can be viewed here:

http://www.google.com/search?hl=en&q=sony+cash+reserves&btnG=Google+Search
http://seattlepi.nwsource.com/business/131322_msftearn18.html
http://www.forbes.com/lists/2006/18/06f2000_The-Forbes-2000_Prof.html

As you can see, Microsoft has -- by far -- the largest cash reserves of any tech company in the world. It has around 49 billion, while Sony has around 7-8 billion. So, Microsoft is making 5-10 times as much in profits and has 7 times as much money in reserve; how does Sony have more ammunition? Honest question -- not sarcastic -- because I don't know how you reached this conclusion. Microsoft could spend Sony into the ground.

I did not miss this, you simpy did not consider how profoundly important the cyclical nature of the business is. 

Here's a simple example: if Sony loses 500 million this September-December, would you say that they lost less money than they did in January-March? You could say that, but it totally misses the point. Obviously they will lose less -- you're comparing Christmas time to the economic wasteland that is the post-Christmas shopping period! Similarly, if you look at every year for all of these companies, the April-June quarter is consistently more profitable than the Jan-March quarter (Microsoft easily would have lost less money if they didn't eat that 1.1 billion dollar warranty). Comparing the two isn't fair.

These things are compared by looking at any given quarter last year, and the year before that. Sony has lost more money in Q4 FY 2006 and Q1 FY 2007 than they did in Q4 FY 2005 and Q1 FY 2006. They are losing more money on a seasonal basis than they were last year. 

1.  You said: " Microsoft's fiscal year has just ended. Their earnings for the past three years have been -3,526,000,000, or appoximately 3.5 billion dollars in losses."   You also said: " Sony's earnings over the last three years in their gaming division have been -1,300,000,000 or 1.3 billion dollars in losses." 

That was what I was comparing and from what I see, it looks like MS's gaming division lost almost 3X's the amount the Sony's comparative division did. 

2.  I think that you misunderstood what I said.  I did not compare which company had more total exclusives, but rather I said that they  **announced** exclusives for the last month were decidedly in sony's favor when comparing them with microsoft, at least from the announcements that I have.  But in any case I haven't  researched this any more than looking at what kotaku.com has to say, so I might be wrong for all I know.

That's incredible.

Microsoft: I'm beginning to get the feeling they're not in it for the money, but just to drive the others out of the mainstream computer business where their real profits lie. It hasn't been a great success though, especially from an instant gratification point of view.

Sony: With the PS2 (mildly profitable) being phased out eventually in favour of the PS3 (heavily losing money), I'd say it'll get worse from here. Once third parties have given up on a console, you either have a strong first-party line (Nintendo) or give up (Sega).

Nintendo: The Gamecube was profitable? Wow. A testament to the power of Super Smash Bros.