Because conpanies will always put shareholders and profit over people.
Think that's more due to how they report 3rd party sales differently. Sony include 100% so very good for revenue, not so much for profit (as 70% was never theirs). Nintendo just the 30% (which is 100% profit).
Profit revenue is comparable between the two but it's worth pointing out revenue accounting is different, Sony include all sales of games where Nintendo only account its share(less than half iirc).
This means Nintendo revenue is much larger or Sony one is smaller, whichever you prefer:)
It's the difference in accounting. Sony accounts 100% of 3rd party sales on PSN as revenue, even though they have to immediately give up 70% of that to the publishers of the games.
Nintendo only accounts their 30% share in the revenue that's why the drop between revenue and operating profit is a lot smaller on the Nintendo side.
Also, 80% of the software sold on Nintendo consoles are Nintendo first party games, which is why they make more money than Sony. It has been this way for the whole gen. Nintendo is crazy profitable for a game publisher but I don't think that's replicatable for Sony by copying Nintendo's approach.
Sony can't make a relatively cheap Kratos & friends playing tennis game and hope to sell millions of copies of that.
I always think the way Sony count their revenue is super weird. like is someone is looking for total video game industry revenue that combine all major publisher and platform holder, wouldn't 3rd party games like Activision, EA etc is counted twice? because Sony count 100% 3rd party sales as revenue, but later EA etc will count 70%of those again as their revenue?
FY23 annual operating profit is down 7% year-on-year.
Point taken on accounting difference but, Sony doesn't to go the extreme of making a cheap Kratos & Friends game, but they super as hell don't need to make their games on the scale of GoWRagnarok to sell millons either.
I definitely think Nintendo's makes a lot more sense, yeah revenue looks smaller, but they (SIE) are kinda always tying a weight around their profit (and given they have pretty recently been using that as a reason to layoff it seems a little slimey too), though I think MS also do the same as Sony, so I guess they think it looks better or it's just easier. I doubt Nintendo do any sweetheart deals with the major pubs like Sony and MS did where they give them a special 80/20 split too, so maybe that's a factor, 100% of CoD on the books vs just 20%.
More than 50% of software unit sales on the Switch in 2023 were from third parties, and that ratio had more or less been the same the two years prior as well. That percentage also doesn't include downloadable unit sales of eShop-only titles.
FYI, this isn't actually true - that 80% number comes from first party game revenue (100% of sell price included) vs. third party revenue (30% of sell price included). If Nintendo counted third party revenue like Sony does (counting 100% of sell price), then that 80% would likely drop to below 50%.
Fantastic numbers, hopefully this puts things into perspective for some people.
Apples to Oranges
Apples to Oranges
Huh? How!? It'll have been 4 years and hasn't come down from breaking even in 2021?
I mean they gotta get it down to take full advantage of gta6 right? Also how do they expect to grow ps+ and get third party exclusives without a massive install base? Do they not see how being a little cheaper can get them to more mass market price like switch
If I understand it correctly, Sony is still selling PS5 at a loss. Hence, they are unable to cut the price.
I don't think we should expect the sales to be better next year.
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That's kind of insane and just goes to show how this global economy is making it even harder to produce affordable tech products.
If I understand it correctly, Sony is still selling PS5 at a loss. Hence, they are unable to cut the price.
I don't think we should expect the sales to be better next year.
Damn they need to work out better deals with manufacturers unless PC hardware has stayed the same price for the same specs since 2020?
If I understand it correctly, Sony is still selling PS5 at a loss. Hence, they are unable to cut the price.
I don't think we should expect the sales to be better next year.
PC hardware, specifically GPUs and CPUs from 2020, have managed to hold their original MSRP which is fucking insane. I was trying to find the best price to performance GPU for a buddy the other day and the 3060ti USED is going for almost MSRP. 3070 still holding new at original MSRP ($500+).
I dont know if it's corporate greed, the parts being no longer made, or something else. But pricing is fucking absurd these days.
Damn that sucks. Guess I got good value just getting a ps5 in 2020 lol that's so lame that hardware doesn't come down anymore
Nah, this more and more looks like they have bad contracts running they made when the semiconductor shortages were still at a high to secure supply.
Building a comparable PC with really cheap components isn't far from the msrp of PS5 in Europe anymore.
Energy costs have gone up, transportation costs, material costs etc...as inflation goes up, every year prices remain the same they effectively go down, for more than people still protest about the $70 cost of games.
It is what it is.
Console install base remains the same, so they're hoping to increase their market share by virtue of the Xbox decreasing theirs.
I don't think they're interested in selling the PS5 at a loss for the casual market, that is not a big spender.
Everything has gone up in price since COVID/inflation. So this isn't all that surprising
Does anyone have that overall profit history Chart from last year? Since everyones been rumbling about profit, Im kinda curious now how does Sony compare to 3rd parties.
That thread did really mislead people uh,it was pretty intentional at this point.
Even if Nintendo 1st party sell times Sony games, their 3rd party sales are much more than 50% of total sales.
Just look at total SW sales and estimate 80%.
That number is revenue(30% 3rd party, 100% 1st party)
Not only that, they don't count digital only games(much more Than 50% of their library, and those games are 99% not 1st party).
We have to stop this misinformation lol:)
Also they definitely can do those tennis game, but it's not easy to make them good:)
Damn. So basically firing people is their "press when you need to increase profit" button, huh?
Obviously not exclusive to Sony, just corporations in general.
Maybe I'm confused, but a different exchange rate?
¥4.3 trillion = $27.5B right? Where's the $29.8B come from?
Payroll is usually where most of a company's spend is, so it will always be the obvious thing to cut to improve margins, and with that, share prices. That's how you keep shareholders happy under capitalism.
Sony are using $1= ¥144.4 conversion rate, I think Games Industry.biz are using todays conversion rate of $1 = ¥156.6. I'm not sure actually.
This is always a matter of opinion among accountants etc. but I can say that external firms like PwC etc frown on this type of reporting treatment. If its guaranteed that you are only going to make the margin, then the margin should be reported as revenue generally.
I wonder if it is because the money stays on their books until payed out.
That would be on the cash side and they can record that accordingly. I work in a different business and had a situation like this (reselling so we received 100% cash from the customer but we only got to keep 10%.) We used to report revenue on the 100% and then take out the payout to show margin and we got slapped on the wrist by our external auditor because it was inflating our revenues and most folks care about topline in earnings calls etc.
So if you do the change, the revenue amount will change but the margin remains the same (profit/loss.) IMO, the way Nintendo does is the right way to show reseller type arrangements
Maybe resetera will decide that Sony Corp. is reporting their revenue wrong, lol.
I believe it makes sense.
If you have a store the full sold through product price is revenue, and of course the producer will also "double report" his share as revenue.
But of course it is clear that Nintendo wants to push their profit margins and Sony their revenue in the reports.
I believe it makes sense.
If you have a store the full sold through product price is revenue, and of course the producer will also "double report" his share as revenue.
But of course it is clear that Nintendo wants to push their profit margins and Sony their revenue in the reports.
Looks like those profit margin issues Sony was having, have already started to resolve themselves (they're never going to reach Nintendo-level profitability, obviously). And what got Sony back into a healthy position? A strong platform which generates huge third-party licensing fees. That's a big thing people overlook when they say "Well, Sony could make more money putting all their games on PC on Day 1!" PlayStation's strongest brand is PlayStation. The PS5 itself is its biggest money generator. They need to keep that strong.
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Correct me if I am wrong but didn't someone earlier in the thread point out that close to half the profits occurred over the last quarter (presumably driven by Helldivers 2).
Sony themselves attribute it to third-party licensing in their slide, so I'll trust them. I'm sure Helldivers 2 helped, but doesn't seem like it was the main determining factor.
I believe the Bungie acquisition rolled off the books too which helped (might be off on this)? But then things like foreign exchange rate played a factor here and that's not something you rely on for sustaining profit.
It's a good quarter overall I think but it's not like everything is back to 'normal' and things are going to be smooth sailing.
Being they had a way better than expected cash crop with Helldivers and an increase in favorable foreign exchange rate, yet their margins pretty much stayed the same (and what looks like lowest in the entire business) show they still are struggling with their core business costs. I would not expect a hardware cut anytime soon outside of promotions, and if anything, be stricter since hardware is basically its own reporting unit now to the CFO structurally. Hulst may be under the gun to contain costs still as well.
Correct because come next quarter or FY they need to show growth again.
Pretty much. It's also feels super cyclical. Before too long they'll probably do a bunch of hiring to facilitate growth before laying people off again a few years later. Just incredibly volatile.
OP
OP
they often sell it with a 100$/euros discout.
If I understand it correctly, Sony is still selling PS5 at a loss. Hence, they are unable to cut the price.
I don't think we should expect the sales to be better next year.
Sales often gravitate around those temporary price cuts, expecially in Europe, or at least in Spain which is the only country that gives weekly numbers (but I doubt the situation is anything different in Italy or France)