Profit margins of "the big 3"

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CodeX

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Looking at the april 2007 npd sales figures (for north america) and how much each company profits (or loses) per unit sold I came up with this:

Wii:
$92 profit per unit
2.470 mil sold
227.24 mil total profit

360:
$125 loss per unit
5.398 mil sold
-674.75 mil total loss

PS3:
$307 loss per unit
1.270 mil sold
-389.89 mil total loss

The Wii has made Nintendo close to 1 billion dollars more than Microsoft's 360, and over half a billion more than Sony's PS3... BILLION, not million, and the Wii has only been on the market half as long as the 360... Also, this is North America alone, you could likely double those numbers if you include the rest of the world.

I love my Wii but honestly I would like to see one of the "graphic whore" consoles at least be remotely successfull. I don't wan't the industry to get the idea that no one cares about technological progress anymore.
 
Interesting thread... but one problem with your numbers is that what can initially start off as a loss making a console can turn into a profit per unit (MS) or even more of a profit per unit (Nintendo).
 
The problem with the "cost per unit" number is that they're totally made up.
 
Article bases unit losses for Xbox360 off april 2006 news. News since then is that per unit losses have dropped off for Xbox360 and approaching break-even levels possibly even small profit.

And console cost breakdowns still say little about operating flows and licensing blah blah blah, the lack of specific details reduces this to an interesting exercise for the reader, but utterly useless in terms of accuracy.
 
Okay, so back then they where losing that much, now they are breaking even, so half it, it is still half a billion difference in profit. I mean, unless you reverse the positives and negatives on those numbers the point remains the same. Of course it is not perfectly accurate but given reasonable data it is clear that Sony and MS are losing hundreds of millions while Nintendo is gaining the same
 
CodeX said:
Of course it is not perfectly accurate but given reasonable data it is clear that Sony and MS are losing hundreds of millions while Nintendo is gaining the same
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Meh, Nintendo was the most profitable company last generation too. But who won overall? PS2 by a landslide.
 
As far as I know the attach rate for all 3 systems is pretty comparable, with the 360 having a slight lead which is accounted by the fact that it had such a big head start.
 
aznpxdd said:
Meh, Nintendo was the most profitable company last generation too. But who won overall? PS2 by a landslide.
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And what did Nintendo do with that profit? Come back to authoritatively dominate both the console and handheld market.
 
What's the attach rate on the three consoles as well? I know the 360 is doing quite nicely on their attachment rate, but haven't heard on the wii and ps3. I personally own more 360 games then I did for the xbox already along with more accessories, and what about online income source? I expect the Wii and 360 to slaughter the ps3 in that category. Basing profit data upon only consoles sales is weak, I would only really use sales of consoles for marketshare speculation. At this point I see the Wii as the most profitable as well but I think the 360 has made HUGE headway for microsoft in entering the console market and as cool as the PS3 could be it's just not had much go for it. My .02 as always.
 
i think youre numbers are wrong...the 360 is making a profit now...i think
 
wall street types who cover the gaming industry have been claiming about a 50 dollar profit on the 360 for something like 9 months now.

but yes, nintendo is doing well.
 
I would think M$ would have quite a large lead in the attachment rate because the Wii and PS3 really don't have many good games or games period yet.

M$ also has a lot of first party accessories which is a major source of profit. They have controllers, steering wheel, batteries, play and charge kit, quick charge kit, head set, camera, face plates, wireless adapter (rip off), vga cable, memory card (rip off), remotes, HD-DVD player, xbox live, points, etc.

The Wii is definitely doing well in hardware sales, but I'm still waiting on some good games that are worth the price. (Trauma center & cooking mama aren't $50 games)
 
All of the cost per unit numbers are bogus guesstimates. Various analysts have wildly different estimates.

The only reliable numbers are earnings statements from the respective companies.
 
360 will lose money until probably around next year and a half and just maybe it would start to see the light at the end of the tunnel. The ps3 on the other hand will lose money until its almost obsolete. Nintendo is in to stay thats for sure. Making billions probably by the end of the year most likely. I think its going to be this way for awhile thats for sure ;)
 
CodeX said:
Looking at the april 2007 npd sales figures (for north america) and how much each company profits (or loses) per unit sold I came up with this:

Wii:
$92 profit per unit
2.470 mil sold
227.24 mil total profit

360:
$125 loss per unit
5.398 mil sold
-674.75 mil total loss

PS3:
$307 loss per unit
1.270 mil sold
-389.89 mil total loss

The Wii has made Nintendo close to 1 billion dollars more than Microsoft's 360, and over half a billion more than Sony's PS3... BILLION, not million, and the Wii has only been on the market half as long as the 360... Also, this is North America alone, you could likely double those numbers if you include the rest of the world.

I love my Wii but honestly I would like to see one of the "graphic whore" consoles at least be remotely successfull. I don't wan't the industry to get the idea that no one cares about technological progress anymore.
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Just wait until the end of this year. B/c if we get what we're supposed to get with the 2.0 update with the PS3, then that officially makes the PS3 have more console features than the 360. I mean, with the ability to access the XMB from anywhere (hence listen to music while playing), and many others. There are going to be millions of different options with the PS3. I'm running Linux off mine sometimes (mostly to mess around with it), and Sony just added printer support for the PS3... which was awesome. Also, the option to smoothen out PS2, and PS titles to make them look a little better.

They also added new slideshows for pics, and the ability to upconvert regular DVDs which is awesome. We also get Playstation Home in the fall, and everything from Metal Gear Solid 4, Grand Theft Auto 4, Assassin's Creed, Lair, Heavenly Sword, Turok (screenshots look sick), Army of Two, Call of Duty 4, Medal of Honor: Airborne, The Darkness...

All in all, it's going to be a great year for PS3. I have all 3 systems, and it's going to be a good year for all of them, but the PS3's library i'm looking forward to the most. By the holiday season this year, everybody's going to want a PS3. I wouldn't even be surprised if it turned some nay-sayers, and fanboys opinions.
 
zamardii said:
Just wait until the end of this year. B/c if we get what we're supposed to get with the 2.0 update with the PS3, then that officially makes the PS3 have more console features than the 360. I mean, with the ability to access the XMB from anywhere (hence listen to music while playing), and many others. There are going to be millions of different options with the PS3. I'm running Linux off mine sometimes (mostly to mess around with it), and Sony just added printer support for the PS3... which was awesome. Also, the option to smoothen out PS2, and PS titles to make them look a little better.

They also added new slideshows for pics, and the ability to upconvert regular DVDs which is awesome. We also get Playstation Home in the fall, and everything from Metal Gear Solid 4, Grand Theft Auto 4, Assassin's Creed, Lair, Heavenly Sword, Turok (screenshots look sick), Army of Two, Call of Duty 4, Medal of Honor: Airborne, The Darkness...
All in all, it's going to be a great year for PS3. I have all 3 systems, and it's going to be a good year for all of them, but the PS3's library i'm looking forward to the most. By the holiday season this year, everybody's going to want a PS3. I wouldn't even be surprised if it turned some nay-sayers, and fanboys opinions.
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you should work for sony...if you don't already. that was a better sales pitch than anything they've done over the last 2 years.

the bolded part is the problem though. seven of those ten titles are *NOT* PS3 Exclusives. the system needs HOT exclusive titles to sell.
 
aznpxdd said:
Meh, Nintendo was the most profitable company last generation too. But who won overall? PS2 by a landslide.
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Exactly, because nintendo was all about reaping all the profits for themselves, rather than sharing it with third party developers. They claimed things would be different this time around, but as of yet they certainly haven't been.

Based on the technology in the box, the wii is an absolute ripoff compared to the 360. Nintendo could sell it at $200 and still make tons of money. Yes, they sell out, blah blah blah nintendo is making money, but that isn't necessarily the best for us as consumers and gamers.
 
zamardii said:
Just wait until the end of this year. B/c if we get what we're supposed to get with the 2.0 update with the PS3, then that officially makes the PS3 have more console features than the 360. I mean, with the ability to access the XMB from anywhere (hence listen to music while playing), and many others. There are going to be millions of different options with the PS3. I'm running Linux off mine sometimes (mostly to mess around with it), and Sony just added printer support for the PS3... which was awesome. Also, the option to smoothen out PS2, and PS titles to make them look a little better.

They also added new slideshows for pics, and the ability to upconvert regular DVDs which is awesome. We also get Playstation Home in the fall...
Click to expand...

The average consumer doesn't give 2 shits about any of that.
 
Spaceman_Spiff said:
Based on the technology in the box, the wii is an absolute ripoff compared to the 360. Nintendo could sell it at $200 and still make tons of money. Yes, they sell out, blah blah blah nintendo is making money, but that isn't necessarily the best for us as consumers and gamers.
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I think it is.

Nintendo is the only one actually trying anything different and interesting. I lost interest in console games after the PlayStation because the games started to suck. 3D fighters, FPSes, 3D racing games, and mediocre RPGs have ruled the roost for years and it got boring. Even with the 360 and PS3, the games are basically *identical* with better graphics. I was a hardcore gamer since I owned an NES and Master System, then a Genesis, SNES, TG-16, N64, and Playstation. By the time the PS2 and XBox came out there was no reason to buy them. PS3 and 360? More of the same. I went to PC gaming instead, because at least there we didn't have to play RTS and FPS games with a freaking gamepad.

So, if the one company doing something truly innovative and different this generation is the one company that blows the others away in terms of units sold and profit, that's fine with me. Maybe the XBox 720 and PS4 will try something new and innovative in terms of gameplay if MS and Sony realize that gamers - not just hardcore console gamers who will play console games 24/7 no matter how shitty they become - want something actually fun and exciting, they'll produce something new and exciting.
 
zamardii said:
Just wait until the end of this year. B/c if we get what we're supposed to get with the 2.0 update with the PS3, then that officially makes the PS3 have more console features than the 360. I mean, with the ability to access the XMB from anywhere (hence listen to music while playing), and many others. There are going to be millions of different options with the PS3. I'm running Linux off mine sometimes (mostly to mess around with it), and Sony just added printer support for the PS3... which was awesome. Also, the option to smoothen out PS2, and PS titles to make them look a little better.

They also added new slideshows for pics, and the ability to upconvert regular DVDs which is awesome. We also get Playstation Home in the fall, and everything from Metal Gear Solid 4, Grand Theft Auto 4, Assassin's Creed, Lair, Heavenly Sword, Turok (screenshots look sick), Army of Two, Call of Duty 4, Medal of Honor: Airborne, The Darkness...

All in all, it's going to be a great year for PS3. I have all 3 systems, and it's going to be a good year for all of them, but the PS3's library i'm looking forward to the most. By the holiday season this year, everybody's going to want a PS3. I wouldn't even be surprised if it turned some nay-sayers, and fanboys opinions.
Click to expand...

Not trying to be too nitpicky but all indications are that Metal Gear Solid 4 is being pushed back to early 2008. The only non-multiplatform games that you mentioned that are coming out, or are already out, this year are Lair and Heavenly Sword. I'm not convinced that the multiplatform games are going to boost Sony's sales given that there is a cheaper console to play them on.

One thing I also want to know, this is a question, not flamebait. What are people excited about with Playstation Home? It looks like a less open version of Second Life to me. I can think of several things about the PS3 that would make it worth buying (when the price drops), but I just don't get Playstation Home or why I should care about it.
 
Wow, is the OP 12? Do you just make up number for the hell of it? Manufacturing costs have little to do with over all profit. Also, manufacturing costs do not stay stagnant.
 
ROFLROFLROFLROFL

It is IGNORANT to claim one company better off in the games business just because their console costs more than they sell for. Sure, all business basics tell you to lower your costs as much as possible, but the games business has traditionally been full of people willing to take the initial hit to potentially gain huge.

To claim one company profitable purely on console sales is unbelievably myopic. Without considering royalties/software sales, it is impossible to get a clear picture on who is "more successful". Console providers are WILLING to take the initial hit because it opens up a window for continued revenue. Ever wonder why phone companies like Verizon and ATT are willing to give you a $250 dollar phone to you for $50? They make you sign those ridiculous 2 year contracts for a reason. They make up those costs with you paying them a subscription which eventually you'll pay off the phone in just a few months, meanwhile the rest is revenue for themselves.

It is a very similar business model with consoles, and especially so with new internet services brought into the console market as Xbox Live has done. When you buy a console, you will definitely buy at LEAST one game. Chances are everyone will buy multiple games. To these companies, they are selling little stores to put into people's homes. They sell it to you so you can buy more of their stuff.

Sure, Nintendo is making money off of every console sale which is good news, and the Xbox division over at Microsoft isn't expected to see a single cent of profit until this year is over, but to claim any one company to be more successful/profitable/better than the other simply on estimated console cost and sales numbers can be grossly misleading.

The single greatest source of profit for a game console provider are games that are sold on their platform. If you want to have a more accurate description of the economic status of these companies in the games business, you MUST take into account software sales and the kinds of royalties that these companies rake in.
 
ClearM4 said:
Wow, is the OP 12? Do you just make up number for the hell of it? Manufacturing costs have little to do with over all profit. Also, manufacturing costs do not stay stagnant.
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I posted my references... Also, I know that this isn't the full picture, that software sales and accessory sales play a big part in how successful the brand is, but that wasn't what I was talking about, I was talking about a specific thing, and you are all generalizing it and talking about the bigger picture. I was focusing on the specific gain or loss from console sales, don't turn it into something else.

Also, if you really want to compare the success of these companies you can look at their stock:
chrtsrvdlljh5.gif


Gee, it looks like they where pretty even until Nintendo released the Wii... refute what I am saying now...
 
CodeX said:
I posted my references... Also, I know that this isn't the full picture, that software sales and accessory sales play a big part in how successful the brand is, but that wasn't what I was talking about, I was talking about a specific thing, and you are all generalizing it and talking about the bigger picture. I was focusing on the specific gain or loss from console sales, don't turn it into something else.
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I have to completely disagree with you there. The entire reason these companies (well I guess its now two of these companies) make consoles is not to sell the console for money, but to sell the console so they can sell the games. Yes, console sales are just as critical as software sales, but your post brings up a topic which is so closely intertwined with other business aspects that they cannot be ignored.
 
xSnowmaNx said:
Sure, Nintendo is making money off of every console sale which is good news, and the Xbox division over at Microsoft isn't expected to see a single cent of profit until this year is over, but to claim any one company to be more successful/profitable/better than the other simply on estimated console cost and sales numbers can be grossly misleading.
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You are right that money made off console sales doesn't tell you much, but the reality is that Nintendo is making piles of profit and Microsoft's games division has been bleeding money.
 
Are some of you stockholders for Nintendo or something? Just because the Wii is making more money doesn't mean its "better" than 360 or PS3. Enjoy whatever console(s) you own, and leave the profits/losses to the companies to worry about.
 
CodeX said:
I posted my references... Also, I know that this isn't the full picture, that software sales and accessory sales play a big part in how successful the brand is, but that wasn't what I was talking about, I was talking about a specific thing, and you are all generalizing it and talking about the bigger picture. I was focusing on the specific gain or loss from console sales, don't turn it into something else.

Also, if you really want to compare the success of these companies you can look at their stock:
chrtsrvdlljh5.gif


Gee, it looks like they where pretty even until Nintendo released the Wii... refute what I am saying now...
Click to expand...

Might wanna look at the fact that other things affect the business of Sony and Microsoft. Nintendo *just* does games. So success or failure of the PS3 or 360 are just one factor that affects the stock price of MS and Sony.
 
jester1176 said:
Might wanna look at the fact that other things affect the business of Sony and Microsoft. Nintendo *just* does games. So success or failure of the PS3 or 360 are just one factor that affects the stock price of MS and Sony.
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Exactly what I was just about to say. Using stock prices and a graph like this doesn't work. Microsoft and Sony have other businesses.
 
xSnowmaNx said:
Exactly what I was just about to say. Using stock prices and a graph like this doesn't work. Microsoft and Sony have other businesses.
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Yeah, they are larger companies with other divisions and are still getting the crap kicked out of them
 
Way to ignore their points. :rolleyes:

This thread isn't going anywhere. Its obvious that CodeX is a Nintendo fangirl.
 
CodeX said:
I posted my references... Also, I know that this isn't the full picture, that software sales and accessory sales play a big part in how successful the brand is, but that wasn't what I was talking about, I was talking about a specific thing, and you are all generalizing it and talking about the bigger picture. I was focusing on the specific gain or loss from console sales, don't turn it into something else.

Also, if you really want to compare the success of these companies you can look at their stock:
chrtsrvdlljh5.gif


Gee, it looks like they where pretty even until Nintendo released the Wii... refute what I am saying now...
Click to expand...

Sorry, I cant refute stupid. Like your original post, stock prices or consoles sales have little to nothing to do with a company's profits. Infact MS posted some of there highest profits ever last quarter and their gaming division also posted a profit for the first time.
 
aznpxdd said:
Way to ignore their points. :rolleyes:
This thread isn't going anywhere. Its obvious that CodeX is a Nintendo fangirl.
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CodeX said:
I love my Wii but honestly I would like to see one of the "graphic whore" consoles at least be remotely successfull. I don't wan't the industry to get the idea that no one cares about technological progress anymore.
Click to expand...

Way to ignore my posts. I am perfectly happy being in the Wii60 camp, and actually feel bad for sony, the more competition the better, I was just surprised by the numbers.
 
CodeX said:
I posted my references... Also, I know that this isn't the full picture, that software sales and accessory sales play a big part in how successful the brand is, but that wasn't what I was talking about, I was talking about a specific thing, and you are all generalizing it and talking about the bigger picture. I was focusing on the specific gain or loss from console sales, don't turn it into something else.

Also, if you really want to compare the success of these companies you can look at their stock:
chrtsrvdlljh5.gif


Gee, it looks like they where pretty even until Nintendo released the Wii... refute what I am saying now...
Click to expand...
That graph doesn't show that they were even. It shows that *growth* was even.
 
CodeX said:
Yeah, they are larger companies with other divisions and are still getting the crap kicked out of them
Click to expand...

yes. getting the crap kicked out of them....

nevermind that vista hasnt taken off
nevermind that the zune is costing them money
nevermind that there are 11 billion sony consumer electronics products...mp3 players, TV's, DVD Players, stereos...

but thats ok. put on your rose colored glasses. that's all good! nintendo is a god damned world beater!
 
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