Latest financials in the world of the big 3

[Trauma-san]

I forgot to post, I think, back when the big 3 released their profit and loss report a month or so ago.  Here's the rough numbers.


Lets start with our friends at Sony. After basically ignoring consumer complaints and doing basically ignorant things like removing the backwards compatibility from the ps3, this quarter (their second quarter ends Sept. 30th) Sony lost twice what it lost LAST year, when the PS3 was launched, losing a whopping $841 Million dollars in their gaming division in just 3 months.  They're bleeding at a rate of almost 4 billion dollars a year... wow.

Now, the reason that they're losing that much money is basically being blamed on them selling the ps3 for much less than it costs to make it, and also because they're having to spend a ton of money BUYING BACK unsold merchandise from retailers.  That's why you're seeing dozens of ps3's lying on the floor of your local Best Buy, Sony's made much more of them than people care to buy and they're having to buy some back... which will level off because now they won't have to make more since they can't sell the ones they have. 

And just to clarify as usual... Sony isn't losing 841 million and making it up elsewhere in their gaming division, this is after you add up ALLLL the profits from the ps3, ps2, and psp, and subtract all the money they're spending on the ps3, the ps2, and the psp, and ALL of the games and accessories included, Sony lost $841 million dollars in the last 3 months.  Hopefully Christmas will be better for them... Also to clarify, Sony corp. is profitable again, because their t.v.'s, and movies are selling very well.  Their gaming division is in the toilet, though. 

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Lets head over to Microsoft.  Microsoft as a whole ALWAYS makes money, but their gaming division ALWAYS loses money.  They've lost several billion dollars on the little experiment they call the Xbox... to clarify, if they had never made the Xbox or the Xbox 360, they would be tens of billions of dollars to the GOOD now...

The last 3 months (ending Sept. 30th) saw Microsoft turn their first ever Xbox 360 profit.  They had one quarter at the end of 2004 where the Xbox made a profit, and now they've made a profit for two quarters out of about 30... The gaming divison brought in net profits after it was all said and done of $165 Million dollars.  Way to go Microsoft! Now, if you can just sustain that profit level for another 10 years, each quarter, you may break even!

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Nintendo always does things strangely, like sell games cheaper, make games funner, etc... and it transfers into their business model and about everything about them... they didn't release quarterly figures, just figures for the half year, so basically the time they're talking about is 6 months as compared to Microsoft and Sony's previous 3 months.... although in the quarter previous to this one, Microsoft and Sony both lost their ass, so just assume that Microsoft and Sony's gaming divisions are both in the hole deeply for the past 6 months.

In the past 6 months, ending Sept. 30th, Nintendo made profits of 1.16 BILLION dollars... off of video games.  I went to best buy last night, they had sold out of Wii's, DS's, and even fucking Gameboy Advances.  I did see 1 gamecube left on the shelf next to the stacks and stacks of Ps3's, Ps2's and Xbox 360's. 


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None of this includes Christmas sales of course, because it ended at the end of Sept... it does include Microsoft's Halo 3 release, though... so look for Microsoft's profits to go down, and Sony's to go down, and Nintendo's to go up when the next quarters numbers are released.  I doubt Sony will lose AS much as they lost this time, because they probably won't have to make as many ps3's since they're stocked everywhere.... and I doubt Microsoft will lose money this quarter, they probably just won't make quite as much this time around.  Nintendo however has released a ton of nice games for Christmas and is selling out of DS's as well as the Wii's which have been sold out all year, so I imagine their profits will rise slightly. 

[Don Jacob]

in my MIS class the prof said that the reason why microsoft still soldiers on with the xbox so strongly is because they're trying to prove that they can compete on a variety of programming levels. which i think they're doing a good of doing. taking a loss like that in an industry in which they're still BABIES in, isn't bad thing at all.

at the end of the day their console is the next gen big dog when it comes to average joe gaming. surpassing sony. if they keep refining their product theres no telling where they could go with it.

[Trauma-san]

They're trying to slide over into the gaming world because they're going to have trouble consistantly selling Windows in the future, one because they can't get what they once could out of it since everybody and their brother knows you can buy a complete pc with windows installed for 300 bucks... so it doesn't make much sense to pay almost 200 bucks for Windows alone.  Second, people are always weary of monopolies and although Microsoft isn't one, they're pretty damn close.  Stuff like Red Hat and Linux and all that geek shit are going to gain more and more ground as time goes on.  So Microsoft is smart enough to know that their gravy train is going to hit some hard times and likely already has. 

Still, this quarter the gaming division actually turned a profit, and they did it once with the Xbox. They probably would have turned a profit last quarter too but Bill Gates stepped up and did the right thing, providing extended warranties to everyone... which plummetted them deeply into the red last quarter.  I imagine they'll be profitable for Christmas, although after that I doubt it since they've already 'blew their wad' with Halo 3. 

Sony on the other hand is a clusterfuck.  I see the ps3 gaining a little ground, but when everyone you sell is at a deep loss and you still can't gain ground, I don't see their way out this generation. 

the psp has done fair against Nintendo's double wammy of the ds and the sp, so at least they've probably turned a profit on that although the UMD movies failed and Sony likely lost a shitload of money on that. 

Nintendo's probably got another 8 or 9 months of runaway sales with the Wii until they can get supply under control, but in Japan the DS is still selling out each shipment, and that's a couple years into it.  All this is probably part of their strategy, they're a very conservative company and are only making what they know they can sell each month so they don't have any backstock issues.  It's not how most companies run business but it seems to be extremely successful for them!  Can't really say much when they've got the hottest toy on the market.  I know several children and every fucking one of them wanted a Wii this christmas. 

[On The Edge of Insanity]

Its not an entirely fair comparison, considering that Nintendo is solely a games company and if they weren't turning in a profit then they'd really be in trouble.

Microsoft and Sony can absorb their gaming losses into the companies as a whole and therefore it is still a case of boardening their consumer base rather than simply a profit making exercise. Having said that, where did you get your Sony figures from, because that seems like a ridiculous amount of money to have lost in one quarter of the year. They were highly profitable with the PS2 and PSP so I fail to believe that the PS3 has caused that much of a loss in such a short period even if they are still apparently selling at a loss.

[Trauma-san]

Its not an entirely fair comparison, considering that Nintendo is solely a games company and if they weren't turning in a profit then they'd really be in trouble.

Microsoft and Sony can absorb their gaming losses into the companies as a whole and therefore it is still a case of boardening their consumer base rather than simply a profit making exercise. Having said that, where did you get your Sony figures from, because that seems like a ridiculous amount of money to have lost in one quarter of the year. They were highly profitable with the PS2 and PSP so I fail to believe that the PS3 has caused that much of a loss in such a short period even if they are still apparently selling at a loss.

That's the point of my post(s).  Sony is losing a REDICULOUS amount of money on the ps3, in a very short period of time.  It's almost staggering.  Here's a link...

http://www.gamespot.com/news/6181712.html?tag=result;title;1

[Mr. O]

Sony fucked their business up due to getting rid of backward compatibility.  That was one of the key thing as well as games.

[I.B. BLVD]

whaaat no more ps3 backwards compatability! I bought mine like a month b4 christmas and it has it.

[I Am The Anton]

whaaat no more ps3 backwards compatability! I bought mine like a month b4 christmas and it has it.

The cheapest PS3 had backwards compatibility removed. The rest still have it.

[Mr. O]

whaaat no more ps3 backwards compatability! I bought mine like a month b4 christmas and it has it.

The cheapest PS3 had backwards compatibility removed. The rest still have it.

actually 60 gig has it and it works most games...however they been having problems...and they don't make em no more.  80 gig can play...but some games...

the thing is..u have to download it to get ps and ps2 games to work.

[Raphael]

who gives a fuck about backwards compability when you already have a ps2? please answer this question

[I Am The Anton]

who gives a fuck about backwards compability when you already have a ps2? please answer this question

Its nice to have a backup if your ps2 breaks. Some people would also rather not have the clutter and be able to play games from both systems on one console, or maybe they never had a ps2 in the first place.

[Trauma-san]

who gives a fuck about backwards compability when you already have a ps2? please answer this question

Its nice to have a backup if your ps2 breaks. Some people would also rather not have the clutter and be able to play games from both systems on one console, or maybe they never had a ps2 in the first place.

Yup, plus if the ps3 has backwards compatibility, you can sell your ps2.  I didn't keep my ps1 around when I got a ps2.  I play ps1 games on it all the time, though. 

Plus, on top of this, Sony made a big fuss about the backwards compatibility at launch! They acted like it was a big deal, then now it's not even a big enough deal for them to include it!  They even said that they were the only system with backwards compatibility, when Xbox had it as well and Nintendo has *full* backwards compatibility with their gamecube games.  The wii plays *every* gc game, the ps3 plays only some ps2 and ps1 games, and now, only some ps3's play those! 

It's another example of Sony doing whatever the fuck they want and daring the fans to complain .

[big mat]

i hope M$ and Sony will learn some lessons of these, the next generation should be just a video game system. I could give a fuck about blue rays and Video on demand, i can't picture myself dl a 25 gigs movie on my xbox 360. I think the wii's a great concept but there's like 2-3 games worth playing on it and i already own 15 games on my 360

[On The Edge of Insanity]

Can we clear up some things on the backward compatibility front.

Clearly the Wii has full Gamecube backwards compatibility because it is essentially a slightly updated Gamecube and retains the original hardware of one.

Compared to the 360, the PS3's backwards compatibility is far superior.

60GB Launch PS3 - 99% backwards compatibility for PS1/PS2 due to actually including the 'emotion engine' hardware from the PS2.
Later 60GB/newer 80GB Model - 80% backwards compatibility for PS2 titles, 100% for PS1, emulated through software
40GB Cheapo Model - No backwards compatibility for PS2 titles, 100% for PS1.

Compare this to the 360, where the cheapest model (Core, Arcade, whatever) is also not backwards compatible because a hard-drive is required for that. The software backwards compatibility in the other models does not include all X Box titles and on a lot of the games is seriously borked, causing errors in game, or forcing users to switch video cables in order to be able to play them. Not only that, but Microsoft are now trying to get people to pay for download's of these games, which still suffer from the same issues as the disc based backwards compatibility.

In comparison with Microsoft's approach, there is no doubt that Sony's backwards compatibility across the range is superior.

[Trauma-san]

^ Actually, you forgot to mention that half the ps3's don't have backwards compatibility.  That's kind of what we were talking about.