Sonys has a bigger turnover but with far higher overheads, Microsoft has a smaller income but massive profit ( paying for services etc). Its also worthy of note that the losses have been halved in a year, even with increased sales and a lower price. I expect the money lost to the PS3 will be offset by BD wining the HD wars (lol) and increasing revenue to Sony from BD sales ( think they get a share of disk sales?). FY2009 will probably see the games division make a small profit.
PS3 costs sony 3.3bn dollars - and it may struggle to earn the money back
- Thread starter movingtables
- Start date
Unfortunately you can, as Microsoft have the cash to throw away. There would need to be a shift in consumer bias the likes of which the world has never seen to convert ever Windows based machine to another company.
Microsoft's predominant financial gains come from software sales of Windows and Office.
Coupled with the fact that Bill Gates is also the biggest philanthropist in the world, he is intent of giving away his fortune ($60bn) to charity, and gives billions of dollars a year to charity.
Yes, Microsoft really can afford to lose a bit here and there - they are not going to go bankrupt any time soon.
Never said they were. You're preaching to the choir here.
As I've said, I was making no comment on the scale of either company as a whole, I was simply saying that both make money from other divisions.
You must think I'm retarded if you believe I'm honestly trying to put Sony against MS in terms of wealth.
Sure I realise that you know Microsoft are the larger company, but your arguing that if Sony can't afford to lose a $bn here or a $bn there then why can't Microsoft.
I don't think you're alone tbh.
You just confused me when you were saying if Sony can't lose $bn why can Microsoft
Except I didn't say that. My original post was pointing out that if you accept MS make money from other divisions, you also have to accept that Sony do to. That's making no mention on the scale of potential profits/losses, just the simple fact that both MS and Sony have other divisions within the company.You just confused me when you were saying if Sony can't lose $bn why can Microsoft
Soldato
- Joined
- 18 Oct 2002
- Posts
- 8,302
- Location
- The Land of Roundabouts
The loses could be seen as a investment in getting brand recognition.
They would rather sell at a sustainable loss than allowing the competition to get a stronghold. Its all about having the monopoly.
Sony & MS can afford to loose a few $, they would loose out more if they allowed Nintendo to get a console in every home.
They would rather sell at a sustainable loss than allowing the competition to get a stronghold. Its all about having the monopoly.
Sony & MS can afford to loose a few $, they would loose out more if they allowed Nintendo to get a console in every home.
Yes I understand where your coming from but you can't discount the scale of matters.
In its launch year the 360 was losing roughly $1.2bn - so pretty equal to what the PS3 is losing for Sony at this point in time. Last reports hinted at around $500-750 million loss a year on the 360 brand, but this was circa 2005/2006.
3 years ago it was also reported that Microsoft make a loss of $130 per 360 sale.
For Microsoft:
A $1.2bn loss in your launch year of a console isn't a daunting figure compared to what you actually gross per year - Realistically you'll make this up elsewhere in a month. The figure eventually fell to below $750 million
For Sony:
A $1.2bn loss in your launch year is surely a daunting figure when your total annual profits aren't even $1bn. This figure has remained pretty static for the last 3 years.
I except perfectly that both Microsoft and Sony have other divisions to create revenue. The simply fact is that Microsoft's entire company creates enough annual revenue to dwarf the figure that one division loses. Whilst Sony's annual revenue is actually less than one of the divisions losses.
In the large scale of things, surely the PS3 is doing more harm to the Sony company than the 360 is doing harm to the Microsoft company?
To state the obvious, Sony have used the ps3 to get Blu-ray into many more peoples homes than they could have hoped too with stand alone players and will eventually see decent profits from Blu-ray discs sales because of it so in the long run I think they will be doing ok.
Sony often only make profits through the Playstation and Bravia departments.
A few years ago (3 I think) it was only the Playstation department pushing profits.
Aye, iirc most of Sony's other departments are/were running at a loss.
From memory most of their manufacturing sections are making a loss year after year, with most of their profit in recent years being from the Games department.
One of the smart moves both MS and Nintendo made, is that they don't actually own the plants that make their products, so if a product doesn't sell in great numbers they can cut their losses much more easily (if you own the factory, and employ the staff it costs you just to have the factory sitting there). It has it's downside in that they are reliant on a third party, and what they can manage but it does rather limit the costs/liabilities.
I am the first to admit I dont know the internal structure of each company - but from an outsiders perspective it looks to me as though 90%+ of MS's income actually comes into "Microsoft" and is then split
Whereas it appears to me as though Sony is already split (SCoA, SCoJ, Sony Pictures/MGM/Columbia, Sony BMG, Sony Electronics etc etc etc)
Maybe Im wrong but this is how it appears to me
Not suggesting one is wrong and the other is right, but for instance its plausable that MS would find it easier for other "departments/sections" profits to write off the Xbox losses as its all internal - however Sony looking like its seperate companies/corporations its a little more ....problematic
Although I would be surprised if the profits from the PS2 arent able to carry the PS3 for a while yet (if necessary) - not to mention that Home should increase the advertising revenue for Sony quite considerably
This is probably why Sony have structured the companies the way they have (even if it causes them problems elsewhere)
IF the manufacturing part of Sony that produces the PS3 (SCE?) goes bust, it doesnt pull the rest of Sony down as it has nothing financially to do with each other (otherwise they would all be under the standard "Sony" umbrella)
I wouldnt be surprised that somewhere in the small print in creation of the SCE it says something like "SCE is a licensee of the Sony Corporation, and in no way financially obligated blah blah blah"
Each seperate part of Sony are probably worth 3/4 of what MS is, but the companies are structured differently so the totals dont read similarly
Last edited:
er where are you lot getting your figures for Microsoft from? 
according to their last quarterly filing (their fiscal year end hasn't occured yet) found here http://www.microsoft.com/msft/download/FY08/Q3-08_10Q.doc shows a good healthy profit
according to their last quarterly filing (their fiscal year end hasn't occured yet) found here http://www.microsoft.com/msft/download/FY08/Q3-08_10Q.doc shows a good healthy profit
er where are you lot getting your figures for Microsoft from?
according to their last quarterly filing (their fiscal year end hasn't occured yet) found here http://www.microsoft.com/msft/download/FY08/Q3-08_10Q.doc shows a good healthy profit
I have shown my sources already, and I never said Microsoft are in the red. I said that the 360 is causing them to lose money (~$750 million per year as of 2005) and I even showed the end of 2007 reports from their website as you have.
I haven't said they're running out of cash, mearly that they made a loss of $1.2bn on the 360 at launch - but in the grand scale of things with an annual profit of $14bn it doesn't even dent into Microsoft's huge wallet.
Sony doesn't own any of the factories that make playstation 3, foxconn and asustek make the ps3 for sony and their LCD panels are outsourced aswell ( samsung or somebody like that )
...... but on the flipside, sony's ability to refine the manufacturing process and bring down costs quicker than MS ( in terms of time from release ) also points to a positive aspect of being a manufacturer.
Also I think all of sony's divisions made a profit except for scei, but hey you have to spend money to make money.
I have always thought of Sony's console as a media console rather than the console on its own. Obviously sony must get some profit from making bluray the dominant media format for a few years to come.
I always thought the same about the Ps2, DVD would never have kicked off (in japan) at least if the PS2 didn't include it.
Plus their download service and the fact they may implement other services in the near future (as well as possibly charging for the Online play).
I always thought the same about the Ps2, DVD would never have kicked off (in japan) at least if the PS2 didn't include it.
Plus their download service and the fact they may implement other services in the near future (as well as possibly charging for the Online play).