Looking at the report I was wondering why there was such a big deffered net revenue(700m+) then I read the article I saw this. "Revenue from the sale of games with online components are now required to be recognized over the life of the game, which now results in a good deal of revenue deferred from the current period."  That can't possibly include all the games which have online multiplayer or downloadable content... I hope.

PS3 has much higher dev costs on a per game basis?

Actually, that by the Non-GAAP measurement, the 72 million net income loss is by the GAAP measurement.

 Thank you for the correction. As to your previous question: the answer is clearly "World of Warcraft." That's where "online game" actually makes a difference. For example, renewed subscriptions for a year would be deferred over the course of a year rather than immediately counted in full.

can someone go into detail how blizzards revenue plays a role in this? Would Activision purchasing blizzard be considered a operating loss? Is Blizzard owned as a whole by Activision.

@Bodhesatva and Kasz216

I know to be honest. i was just making a point that its ok for people to say it when its the ps3 at the top but not the Wii.

All i have to say is from time Konami can make a profit and have a ps3 exclusive then it kind of makes the point mute about the ps3 creating huge losses.

If the ps3 was such a loss fest then devs just wouldnt create the ps3 version of the game. it kind of defeats the perpose of making profit wouldnt you agree. They are in the game industry to make money after all.

Put now i am just getting off topic so erm. yh

That's because it is ok for people to say it when the PS3 is at the top and not the Wii... (except very rare wii occasions.)

because it can make sense in the case of the PS3.... and not with the Wii.

Keep in mind that something like 2 out of every 10 games make money... so it's entirely possible that even with high revenue there is high loss.

No problem. As for WOW, I hadn't though about that. Make sense since they still need to provide the service. The deffered revenue seem to impact console games as well, I just stumbled upon this in the report:

"Revenues related to the sale of World of Warcraft boxed software, including the sale of expansion packs and other ancillary revenues, is deferred and recognized ratably over the estimated customer life beginning upon activation of the software and delivery of the services.

As a consequence, the company's non-GAAP results exclude the impact of the change in deferred revenues and related costs of sales related to certain of the company's online-enabled games for certain of the Microsoft, Sony, Nintendo and PC platforms and for World of Warcraft boxed software, including the sale of expansion packs and other ancillary revenues, in order to provide comparable year-over-year performance."

Doesn't specify which game. I can't think of any console game which could be affected by what you mentioned. Did they release any subscription based game on console? Or maybe sell game card which can be used to buy stuff online(GH track?).

If i remember correctly some comapany defers Xbox 360 revenue and not PS3 revenue for some reason.  I want to say EA... or Ubisoft.

I could never figure out that one.  Maybe there is something iherent about 360 games that causes their revenue to be deferred in their deals with MS?

Having the pc at the top is great because they get higher profits per sale thanks to no reveue being given to microsoft/sony/nintendo etc. While the majority of that is obviously world of warcraft's new expansion I've heard reports that the original wow has performed better this year then last year aswell. Not to mention that warcraft 3, starcraft and diablo 2 still sell quite well.

Activision are in a great position if you also take into account the strong sales of their wii platform.

As people have already said they deferred some revenue so I wouldn't be worried about this "net" loss.