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Back in 2020, PlayStation had lower gross margins than Xbox despite a 2:1 install base advantage
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DenchDeckard
Moderated wildly
How the fuck?
Salty Popsicle
Banned
So console hardware sales aren't the end-all-be-all indiciator of success...
HeWhoWalks
Gold Member
Who said that they were?
DenchDeckard
Moderated wildly
Where were they losing margin? Hardware sales? Surely it can't be anything else?
I'm confused.
I'm confused.
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Salty Popsicle
Banned
Engagement > Unit Sales
Flutta
Banned
Exactly, gamers can buy those console games without having a console to play them on….
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Salty Popsicle
Banned
90% of the people on this forum who foam at the mouth ever few weeks when new NPD sales tracking data releases or UK box charts.
Salty Popsicle
Banned
You don't need to own an Xbox console or even a PC for that matter to play many Xbox games. This is why Microsoft has invested and will continue to invest heavily in cloud.
Killjoy-NL
Member
It would help if you'd wipe your tears and pay attention.
Salty Popsicle
Banned
No, I like my popsicles with a bit of salt.
Flutta
Banned
You are one sad ignorant little fella, i’ll tell you that.
HeWhoWalks
Gold Member
Hyperbole, but okay.
Unit sales are a measure of success, yes. To argue otherwise is to argue ignorance. Of course, there's more to it than that and I've never seen anyone say something to the contrary. Making money is another, where PlayStation again is ahead. So, it's a pointless, bullhorn argument no matter which side of the cloth you cut.
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Salty Popsicle
Banned
cireza
Member
ChuckeRearmed
Member
I believe that at that time PS5 was still selling at loss. But in general Xbox usually had higher profit margins.
How the fuck?
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Heisenberg007
Gold Journalism
Then there's no reason for Xbox to hide their P&L numbers or have "tough conversations" about their P&L and ROI with the Microsoft Board of Directors. (as Phil said in his other email).
I guess the easiest way would be for Phil to share Xbox GM and P&L numbers, so we can compare that with Sony's GM and P&L data and see for ourselves
I guess the easiest way would be for Phil to share Xbox GM and P&L numbers, so we can compare that with Sony's GM and P&L data and see for ourselves
Crispy Gamer
Member
Yeah right how would they have all that info
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Mibu no ookami
Member
I'm guessing this is due to Sony actually putting money into software development...
I've mentioned to people for a while that Sony is trying to shore up their profitability. They've been running very lean despite their success.
Microsoft on the other hand has not really reinvested its revenue into the business.
I've mentioned to people for a while that Sony is trying to shore up their profitability. They've been running very lean despite their success.
Microsoft on the other hand has not really reinvested its revenue into the business.
Salty Popsicle
Banned
Expanding Xbox Game studios with Zenimax and Activision is not investing into the business???
Woopah
Member
Microsoft can be criticised for many things this generation, but "not reinvesting" isn't one of them. They are trying to spend $70 billion on ABK.
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Neither closed in 2020.
DryvBy
Member
Better hope those numbers improve or else Xbox will be in the clouds.
Aenima
Member
When you sell a console at a loss, the more units you sell the lesser the profits. In the long run it pays off as the install base increases, it makes the platform more atractive to developers, and having more developers putting games on your platform, makes it more atractive to gamers. Thats how you make success, not with how much profits you made in your launch year.
Klayzer
Member
Man, Team Green is really desperate for some good news. Patting yourself on the back for launch year profits, is really scraping for scraps.
Mibu no ookami
Member
This didn't happen until 2021 and 2022
Freelance Yakuza
Member
what does it mean?
PlayStation is the most profitable entertainment businesses in the world
Profit and profitability are not the same.
Long-term value creation is a function of revenue growth and return on invested capital (ROIC).
ROIC, a comprehensive measure of a company's profitability, considers both the amount of capital invested and the return generated from that capital.
It measures how much profit PlayStation generates for every yen invested.
47.5% , 41.9% ... Absolutely insane
Profit and profitability are not the same.
Long-term value creation is a function of revenue growth and return on invested capital (ROIC).
ROIC, a comprehensive measure of a company's profitability, considers both the amount of capital invested and the return generated from that capital.
It measures how much profit PlayStation generates for every yen invested.
47.5% , 41.9% ... Absolutely insane
Mibu no ookami
Member
I really wish people read thoroughly...
Sony present all their data. It's MS that hide it so they only need their own to compare. Funny how the xbox people are cheering this on though. It just means they sold a lot more PS5s and that affected their margins whereas MS didn't give a shit about xbox numbers and securing an install base for their loss leading Series X.
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Crispy Gamer
Member
That makes sense now I remember Sony didn't turn a profit on PS5 until around summer 2021
Xbros are so desperate they resort to out-of-context cut-and-paste peanuts carefully selected by...
A Reeee Evangelist.
Little Chicken
Member
Maybe that's why that chubby guy before Jim was given the sack.
Klayzer
Member
Shocked not shocked at the timing. It's almost like there's a fire going on in Redmond.
Hip Hop
Member
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TransTrender
Gold Member
At first glance this looks like a shitty and dumb ass pull tweet.
I thought I already saw emails yesterday stating Xbox had a massive massive subsidy on hardware costs and PlayStation was not doing the same.
ZehDon
Gold Member
Their margins might be lower, but I'd wager their overall profit would still be higher. Xbox has been smart with migrating itself to a platform, to insulate itself against lower hardware sales as Sony tightens its stranglehold. The issue is that Xbox needs to scale up their subscriber counts to make bank, and they simply haven't been delivering the first party titles necessary to do that. When they add Call of Duty to Gmae Pass, I imagine we'll revisit this discussion.
StreetsofBeige
Gold Member
What does AM % mean? Never heard that term before.
bender
What time is it?
Average Margin?
RickMasters
Member
Not in this day and age. Customer retention and getting them to spend regular on your platform is probably more profitable in the long term. Of course they are gonna need more big hitters to make this really work though.
nowhat
Member
Most consoles are sold at a loss initially, this is nothing new. The PS3 launch was nearly catastrophic for Sony, despite the high retail price Sony still made a substantial loss with each console (some estimates say up to $200). But PS3 was also one of the cheapest, if not the cheapest, BluRay player at the time, so many home theater enthusiasts would just buy it without spending much (or at all) on games. Not suggesting it was the same with PS5, I'm assuming we're in the same ballpark as with PS4 (during PS4 launch Sony stated that they'd need to sell a single full-priced game to break even).
GetInTheRobot
Banned
Hardware will always be a losing battle to software.
twilo99
Member
Xbox is more of a bring your own device situation.. for example, you can play Starfield on a $200 Chromebook if you wanted to, but if you want to play Spider Man 2, you can only do so on a PS5.
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