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Old 05-17-2005, 03:52 PM   #1
discomfort wings
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Profit figures for Microsoft/Nintendo/Sony

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Companies come and go, but the winners stay constant, they make our games, detemine our fixes, and work out our new technology. But who is the actual "winner" of the great gaming battle in 2004? Is it determined by how many systems they sell? How cool thier games were? Is there some kind of facts we can go by? There is, we call them Economics.

Most important thing you can base the winner by is thier profits, or how much money did they make in the year that they didn't already spend to make the money. Oddly enough, despite Sony grossing in the most cash last year, they're actually the #1 losers of the the war, where Microsoft came in at a surprising (or maybe not so surprising) First Place.

That's right, it's wierd, Microsoft sells less then Sony, and Nintendo less then either system, yet Sony comes in last? Why? Well, read on to find out.

Click Below to read more. Source Article - Pcvsconsole.com

Sales
Microsoft: $34.27 billion
Nintendo: $4.26 billion
Sony: $63.23 billion

Profits
Microsoft: $8.88 billion
Nintendo: $0.57 billion
Sony: $0.98 billion

Since I'm on a roll with this... the Winner, is Microsoft, damn you Bill Gates, followed closely in second by Nintendo, with Sony way behind at third. How did I come up with this? Let's look at it with pure logic, disreguarding fandoms. Please do note I tend to lean towards Nintendo, though I'm claiming Microsoft the winner.

Microsoft Operated at an operating cost of 25.39 billion dollars. This means it cost that much to pay employees, develop technology, market products, and everything else, this money was covered int the budget. With a sales of 34.27 Billion, and a profit of 8.88 billion, Microsoft scored nearly a 25% claim for profit. That means 25% of what they made went back into the company, or into a CEOs pocket for the next year...

Nintendo operated at 3.69 Billion Dollars, this includes marketing, payroll, manufacturing aneverything else (yet they still brought us all the games we saw this year, AND the DS.) They claimed sales of 4.26 Billion dollars and a total profit of 570 million dollars, or .57 billion dollars. This means they had a profit of about 12.5% of thier budget, this money going back into the company or to a CEO, and in Nintendo's case, it usually goes into project treehouse, aka, the development team.

Sony operated at a cost of 62.25 Billion dollars (yikes... did that go into making PSPs or commercials?). THey claimed sales of 63.23 billion, by far the largest sales, yet only a profit of .98 billion dollars! this means they only turned a profit of 1.5%!

That places us at:
Microsoft: 25% Profit
Nintendo: 12.5% Profit
Sony: 1.5% Profit

This isn't a fan statement, or an opinion, it's a fact, the company actually swimming in the deep end right now is Sony, and they're forgetting how to swim. -Seraphna
http://www.gamersalliance.org/content/view/91/2/
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Old 05-17-2005, 05:38 PM   #2
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Microsoft's and im sure Sony's numbers are misleading. They are counting all the divisions of both of those companies and not just the gaming console parts of them.

Check the last post on this page:

http://forum.pcvsconsole.com/viewthread.php?tid=11760

Maybe i miss read but that appears to be the case here.
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Old 05-17-2005, 07:44 PM   #3
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I am suspicious as hell. How can the XBox, which takes huge losses on every console sold, have such high profits?
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Old 05-17-2005, 08:07 PM   #4
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Huge losses on every console sold was assumed to be true. Nobody really knows how much of a loss hardware sales have generated. Also, add in peripheral sales, which are not sold at loss, royatlies from software, from third party accessory manufacturers, and it adds up. and, MS has very profitbale other divisions, and other products under home entertaiment that can contribute to loss/profit.

Sony has had rough year in consumer electronics, and the R&D costs of PS3 are huge - over 2 billion into the cell project - so that eats into a yearly profit.

Nintendo is in the best shape, as they don't have other divisions, just games.
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Old 05-17-2005, 08:24 PM   #5
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In all fairness, if Sony counted SCEA as being it's own company, those profit margins would probably be higher.
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Old 05-17-2005, 10:55 PM   #6
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Quote:
Originally Posted by Zod
I am suspicious as hell. How can the XBox, which takes huge losses on every console sold, have such high profits?
That is microsoft profits, not XBOX profits...

This is so obvious it's not funny, who do you think makes windows? do they give it away for free?


As someone pointed out, if you followed that link you could find...

Operating Income/Loss per Segment (Fiscal Year 2004)

Home and Entertainment: ($1,215) loss


Microsoft lost 1.2 billion on entertainment etc, while apparently sony games division lost money also their overall profit was dragged down by losses in other departments. (note; this small loss may have included a provision for the immersion lawsuit, which is hard to tell unless I read the notes to the accounts, which at this moment I cant be bothered),

This is not just XBOX mind, but it gives you a general idea, and is probably the biggest item in entertainment.

The initial post is pointless as far as the 3 systems are concerned, except so far as to show the general health of the companies.

Microsoft undoubtably lost a lot of money on xbox, but they mainly wanted to get into the market so they could attempt to dominate in future seasons as they have done with computer operating software.


Now my personal opinion is that Microsoft as the only player in the console industry would lead to them way overcharging, just as they do now with Windows etc, which is why their profits are so good, because they have a monopoly on the market, and can charge more than they could otherwise.

I am an Accountant, so I should know what i'm talking about in this case,

cheers.

Last edited by Isharoth; 05-17-2005 at 11:05 PM.
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Old 05-18-2005, 01:33 AM   #7
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Somethings wrong with that. There was another that listed Nintendo infront with 9billion or so. How can they have less here? Entire thing makes no sense to me.
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Old 05-18-2005, 11:16 AM   #8
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Microsoft really came into their own last year, they seem to now have an almost equal ground as far as developer support goes with Sony, and they had one of the largest titles of last year under their belt in Halo 2. Besides the fact that I am sure a number of developers are interested in Live, I personally say deserve to have a hat tiped off to them as far as their performance in the game industry goes.
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Old 05-27-2005, 01:25 AM   #9
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Man, that article reaks of Microsoft bias.

Here are the profits posted for the gaming divisions of each compnay.

Sony
Year Profit
1998 974,000,000
1999 1,130,000,000
2000 730,000,000
2001 -409,000,000
2002 623,000,000
2003 939,000,000
2004 650,000,000
2005 406,000,000

Totals 5,043,000,000


Nintendo
Year Profit
1998 629,000,000
1999 645,000,000
2000 421,000,000
2001 726,000,000
2002 800,000,000
2003 560,000,000
2004 316,000,000
2005 809,000,000
Totals 4,906,000,000


Microsoft
Year Profit
1998
1999
2000
2001
2002 -750,000,000
2003 -1,191,000,000
2004 -1,215,000,000
2005 -58,000,000

Totals -3,214,000,000


As you can tell, MS won't see a dime of profits in the video game business for a long time, that's assuming they make a but load of money from Xbox 360.

If MS can somehow make 250,000 dollars a year in profits, which is being generous, it will take them 13 years to make up the loses from Xbox.


Honestly, I don't see them ever turning a profit in this industry.
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Old 05-27-2005, 01:59 AM   #10
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Why not see it like this, so that it can be a fair comparison
Sony
2002 623,000,000
2003 939,000,000
2004 650,000,000
2005 406,000,000
Nintendo
2002 800,000,000
2003 560,000,000
2004 316,000,000
2005 809,000,000
Microsoft
2002 -750,000,000
2003 -1,191,000,000
2004 -1,215,000,000
2005 -58,000,000
I also think that your list is fake, because it dose not put the right numbers. do you really think that every one of them get exactly XXX,000,000 , I don't think so.
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Old 05-28-2005, 07:31 AM   #11
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Quote:
Originally Posted by Paper exe
I also think that your list is fake, because it dose not put the right numbers. do you really think that every one of them get exactly XXX,000,000 , I don't think so.
Paper, it's rounded up, those numbers are real. At those amounts 1 million here or there won't make a difference.

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Originally Posted by littlewig
If MS can somehow make 250,000 dollars a year in profits, which is being generous, it will take them 13 years to make up the loses from Xbox.
...If MS would make $250,000 profit every year for 13 years, it would equal to 3,250,000. They'd need to make $250,000,000 profit a year(roughly) for 13 years to break even.
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Old 05-28-2005, 03:30 PM   #12
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It was most probably created by some twisted M$ ultra fanboy; covering up the fact that the company he loves is just throwing money at this market and expecting profits. It's just not as simple as that.
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Old 05-29-2005, 04:38 AM   #13
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I call shenanigans on this article. This is some sloppy economics at best, and a little bit of cooking the books at worst. These aren't good numbers off which to base arguments, so it'd probably be best if we didn't bother.

The gross oversight of failing to define the gaming devisions in the cases of MS and Sony only point to ignorance or bias, as stated, toward MS.
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