It's probably a sure thing PS3 will outsell the xbox 360. But with all the extra stuff microsoft has going for it with live/marketplace etc... Do you think there is a potential for them and developers to actually make more money on the 360 then with the PS3 even with it's higher hardware sales?
Can microsoft generate more revenue with much less sales?
- Thread starter skilzygw
- Start date
skilzygw said:
1) I think you mean profit. Revenue will be higher for the company that sells the most. Profits is the revenue after you take out the expenses - basically the notion of actually "making money"
2) To answer your question, MS could make more profits if their expenses are much lower than Sony's. It's all to be seen if that will be the case.
I did mean Net Profits, whoops.
I forgot about the supposed high cost of PS3 hardware. Then again Sony may be looking at this from an overall conglomerate. Where if they get enough ps3's out there it will help there electronics blu-ray division, which will help there HDTV division, which will help their movie division etc...
I forgot about the supposed high cost of PS3 hardware. Then again Sony may be looking at this from an overall conglomerate. Where if they get enough ps3's out there it will help there electronics blu-ray division, which will help there HDTV division, which will help their movie division etc...
Factoring in Sony's 'Live! Marketplace', CONNECT, will be selling music and stuff too, I'd think not. Sony just have more to sell.
Ignnoring the iPod for a moment, Apple has been making a profit off their computers despite selling significantly less than Dell. If the margins are high enough MS can make a net profit. With the new economy MS established with Live I'm sure they'll make a profit off of it and their investments will pay off.
I'm confident they can make a profit or at least increase revenues. But that has yet to be seen. Your answer will be given in the coming years.
I'm confident they can make a profit or at least increase revenues. But that has yet to be seen. Your answer will be given in the coming years.
Another thing, developers and publishers will target most of their games for the system with the largest install base. Their best products will be first and foremost for those systems, and then ported to other consoles.
Sony's PS3 is supposed to be more of a factor on Sony's profits than MS has on XBox 360. So Sony is willing to invest more and take more chances and even initial up front loss on the prospect of selling music, movies and other content through the PS3.
In the long run both companies will likely be happy with the outcome of this generation, making the profits they wanted and expanding their userbase.
Speng.
Sony's PS3 is supposed to be more of a factor on Sony's profits than MS has on XBox 360. So Sony is willing to invest more and take more chances and even initial up front loss on the prospect of selling music, movies and other content through the PS3.
In the long run both companies will likely be happy with the outcome of this generation, making the profits they wanted and expanding their userbase.
Speng.
MS has created more channels of income with 360 than they had with Xbox.
For starters, the whole licensing agreements with IBM and ATI are far better than what they had with Intel and Nvidia. So money will be "saved" there.
Then we have all the peripherals that exists with 360. I think that MS would want the core system to be the "best selling" of the two SKUS, this way they have better margins with for example the HDD and other peripherals that are bundled with the premium SKU.
But yeah, the peripherals will add an extra income channel as well..(remember that MS has better agreements here with MadCatz and such regarding thirdparty controllers and such)
The we have the whole XboxLive thing.
All the stuff you can buy.. and all the things to come. For example.. I would bet that a demo for Halo3 (or other anticipated games) will cost a small fee to download and people will download it gladly.
thanks to the integrated XboxLive and the different subcription forms, many more will get Gold-memberships and download stuff that costs MS-points (which you have to buy aswell)..
and the last part..
MS strongly believes that Xbox360 will exceed sales of Xbox (who can argue against that).. which will mean that far more software will be sold and therefore, more income can come from software...
So yeah, MS will generate some interesting incomes from 360.. will it be more than Sony? Hard to tell.. but MS has created far more channels for income than they had with Xbox.
For starters, the whole licensing agreements with IBM and ATI are far better than what they had with Intel and Nvidia. So money will be "saved" there.
Then we have all the peripherals that exists with 360. I think that MS would want the core system to be the "best selling" of the two SKUS, this way they have better margins with for example the HDD and other peripherals that are bundled with the premium SKU.
But yeah, the peripherals will add an extra income channel as well..(remember that MS has better agreements here with MadCatz and such regarding thirdparty controllers and such)
The we have the whole XboxLive thing.
All the stuff you can buy.. and all the things to come. For example.. I would bet that a demo for Halo3 (or other anticipated games) will cost a small fee to download and people will download it gladly.
thanks to the integrated XboxLive and the different subcription forms, many more will get Gold-memberships and download stuff that costs MS-points (which you have to buy aswell)..
and the last part..
MS strongly believes that Xbox360 will exceed sales of Xbox (who can argue against that).. which will mean that far more software will be sold and therefore, more income can come from software...
So yeah, MS will generate some interesting incomes from 360.. will it be more than Sony? Hard to tell.. but MS has created far more channels for income than they had with Xbox.
Depends on their CONNECT integration. Sony are certainly headed down the right path with PSP and if they continue with PS3 I see no reason why they won't have a strong online interface and downloadable content. Downloadable content is really an amazing source of profit IMO.
I was thinking about this the other day, Nintendo are going to get insanely rich. Revolution, even though I don't think it'll sell more than either X360 or PS3, will probably sell NES/SNES/N64 games by the bucketload. And they'll price them $5-20 apiece (title + system taken into account) IMO.
So anyway, if Sony have a halfway decent download service, then they'll probably gain more profit on that than MS on virtue of the # of PS3s expected to be out there. That and the content Sony actually owns is huge, and they have more pull to get other companies on board. Factor in more royalties from normal store-bought games (assuming, again, PS3 wins as expected) and I doubt MS will beat them.
I was thinking about this the other day, Nintendo are going to get insanely rich. Revolution, even though I don't think it'll sell more than either X360 or PS3, will probably sell NES/SNES/N64 games by the bucketload. And they'll price them $5-20 apiece (title + system taken into account) IMO.
So anyway, if Sony have a halfway decent download service, then they'll probably gain more profit on that than MS on virtue of the # of PS3s expected to be out there. That and the content Sony actually owns is huge, and they have more pull to get other companies on board. Factor in more royalties from normal store-bought games (assuming, again, PS3 wins as expected) and I doubt MS will beat them.
ImaginaryIndustryInsider
Newcomer
Titanio said:
Free movie trailers and music video(s) are already available, I doubt that micro-transaction music and TV content are too far behind...
scooby_dooby
Legend
I think this whole Sony 'content' advantage is blown out of proportion.
Sure Sony might make more profit off some of the content they could offer, it doesn't mean MS could not offer the same services, simply by partnering with a 3rd part content provider.
Like this:
http://cinematical.com/2006/01/03/microsoft-and-sony-partner-in-vongo/
Coming soon to an XB Marketplace near you i'm sure, complete with overpriced upgradeable HDD's. I'm sure you'll be able to use your PC as storage though, through the Media Centre extender probably...
Sure Sony might make more profit off some of the content they could offer, it doesn't mean MS could not offer the same services, simply by partnering with a 3rd part content provider.
Like this:
http://cinematical.com/2006/01/03/microsoft-and-sony-partner-in-vongo/
Coming soon to an XB Marketplace near you i'm sure, complete with overpriced upgradeable HDD's. I'm sure you'll be able to use your PC as storage though, through the Media Centre extender probably...
You'll see also Sony gets the same contentscooby_dooby said:
MS 'can' get more content, but they haven't got it yet. Sony already have what AFAIK is one of the largest music collections in the world for sale on CONNECT, and a popular TV and movie content. Even without any 3rd party alliances they can lead the way on content distribution, and the moment they show things being sold they'll attract support. I don't think rating what 'can' happen is something worth doing. MS might forge alliances to sell movies. Sony might create a portal for selling homebrew. MS might get 10x the game tie ratio as Sony. Based on what is there already and setup and in the works, Sony definitely have a content advantage. and they ought to have, having spent years and $lots buying into the media industry!
Surely you jest?scooby_dooby said:
The own a huge proportion of the international music market (~22% just behind Universal), an even bigger share of the NA market, and are also second behind them in catalogue.
And their movie studios are huge. 4000+ movie catalogue IIRC.
And Sony's divisions are in many ventures with the other content holders already (PSP (UMD), MovieLink, Connect).
scooby_dooby
Legend
Nicked said:
So? Does that mean MS can not sell exactly the same content and simply pay royalties on it? They can just partner with 3rd part re-sellers and get access to all the same content, including sony pictures I'm sure.
And before you start accusing me of 'what-ifs', MS is clearly lining up for online delivery of video, television and movies using media centre, and media extenders, so they will be signing deals like they already have with DirectTV, and Vongo, and they will aquire rights to resell this content.
As far as the consumer is concerned, they do know who technically 'owns' the content, just as long as they can buy it.
Like I said, I can see sony making more 'profit' on the content, but it's not as if MS won't be able tp provide the same content if they choose.
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