This isn't necessarily a reply to your comment, but I think it brings up an important point IMO: Profits are only one angle for the future and how we should be evaluating consoles right now. The game is bigger and there is a lot going on right now beyond, "Who sold made the most money this year?"
It would be rather interesting to see what their endeavor would look like if they were... you know... required to make a profit off it, yeah.
(Not "start making a yearly profit off it 7-8 years down the road, and only get the division in the black 5+ years after that.
)
Then Sony would not have been permitted to enter the market in 1994/1995 because they did not make an immediate profit. Of course you could argue, "But they eventually did" but that kind of defeats the point in setting arbitrary boundaries... based on other consoles! We could create all kinds of what-if scenarios around Atari or Nintendo that would have precluded Sega, Sony, MS, Matsushita, 3DO, and so forth.
Sony, Nintendo, and MS are all approaching the market differently, therefore it isn't realistic to set arbitrary measurements to what is success and/or important to each:
Sony: The PS brand is very important to Sony, financially, but almost importantly the PS brand has become essential, if not primary, as a platform to foster adoption of technologies and formats. The PS3 is probably the most clear as such with the BluRay media platform, Cell technology platform, and Sony's future online network for digitial distribution and entertainment. From a console perspective the cost & risk of BluRay is massive -- yet as a platform BluRay is very important in regards to media security and establishing a new format for consumer media (sell movies + players) that will drive Sony profits into the next decade and beyond; therefore the risk of a $600 console is not only worthwhile, but necessary. Sony themselves have been preaching this very thing for a year now: The PS3 is a computer, not a gaming device. Sony has eyes for a bigger piece of the pie, and a game console is just the footprint to get into the door (one they are quite at home at).
Microsoft: MS owns the software ball on the biggest/most profitable platform in the world. [...insert obligitory MS bashing...] Obviously in the financial world everything is about profits, period. Any openly traded company says otherwise is not telling the truth. Now they all put nice facades on it how they are all about delivering product X to maker consumers happy and make their lives better... so they can make huge wads of cash. Just as Cell and BluRay are important to Sony (and hence incorperated into their Playstation to leverage these technologies as longterm market winners) MS looks to extend their strength (software) to anything with an electronic pulse. It doesn't take a genious to figure out we have been in full swing toward a digital and information driven world--but even more so an *entertainment* driven world. MS missed the boat the first time on the Internet and after some corporate soul searching I am certain they realized that there was a life outside the PC, and that entertainment (movies, games, music, etc) were evolving in a direction that would open the doors to new "players" in the market. Being in the mix is as important as making money because consoles pose a core threat not only to their future vision but also their current market. If you are not growing your are dieing, as they say, so MS is investing in growing long term in spite of the short term realities. (I would add, because of your comments, that while their was initially a lot of skepticism about MS's committment to games themselves, MS has proven to not only be committed to developing quality games but creating a profitable framework for others to do so [hint: helps PC devs out a lot, which in turn helps MS!] and have spread their wings some and did not sit idle being a copycat).
Nintendo: They are driven by two things: Developing quality gaming experiences (secondary) to drive profits (primary). Unlike Sony and MS, gaming is Nintendo, and their products completely represent such. You don't see leveraging of operating systems, online networks, media platforms, processor technologies, and so forth for some bilateral vision with other divisions within Nintendo. Everything is very focused on delivering a profitable gaming experiences. The experiences may change as time, technology, and consumer change, but that variable is always kept in line with the goal of earning profits.
One thing all three have in common: All have realized, and embraced, the reality that beyond their corporate desires and goals that on the consumer level consumers want one thing:
Great gaming experiences.
Sony, MS, and Nintendo each have a different vision for what "great gaming experience" is -- both now, and for the future, and that experience is intertwined intimately with their visions not only for "good games" but also "good platforms" for themselves and in their opinion for consumers. This gen spells that out clearly:
• Nintendo sees intuitive player driven input and accessibility as a financially rewarding goal; Nintendo gets a "pass" by avoiding direct competition in regards to technology and pricepoint with Sony and MS, thus opening up to different gamers through experience and pricepoint. A great gaming experience, Nintendo argues, is not based on graphics or technology but ideas, creativity, and focusing on what has made gaming a succuss in their opinion: user focused, experience focused gaming. Nintendo plans to get rich by giving you something uniquely Nintendo.
• Sony sees the continued convergence of digital media (like movies) with the gaming platform; in addition Sony is looking long term as a hardware company. Cell is a platform by which Sony developers will be offering great games on for many, many years to come. But not only through the traditional routes as the backbone of the PS3, PS4, and PSP2 but Sony is laying a framework of a "Cell Network" of hardware interpolarity where Cell is in everything from Cell Phones, TV decoders, and Supercomputers. Sony sees a Cell world as the future of gaming -- and they are offering this convergance and this foundation to gamers come November 2006. Cell IS as the core of Sony's vision for a great gaming experience, and Sony believes consumers will agree. Thus the PS3 is as much about a great gaming experience now (they are the market leader, i.e. do more of the same!), but have also made a bold move to officially solidify that position... permenantly, which is music to many, many gamers's ears!
• MS sees the idea of "great gaming experience" at the opposite spectrum as Sony -- which is no more clearly spelled out than by Live Anywhere. Hardware is an abstraction, the software experience, and opening that door to a vast audiance across many platforms, is MS goal. MS feels that gaming is moving in the direction of online networks, experiences, and interaction. Online distribution of music (and movies), games, and marketing material for those experiences. MS thinks that at the core of "great gaming" is great services, and everything about Live, and in many ways the 360, revolves around establishing consumer services. Give people the experiences they want and they become your consumer on your platform. MS has already proven Live is not limited to hardware (x86 to PPC) and is bringing it to the PC. There is no question that MS's goal is to establish a quasi-unified software network that in many ways goes beyond platforms so they can provide their software experiences to consumers on many platforms (not just the Xbox). The Xbox is just a frontier along with Smart Phones, Media and Music Players, UMPC, portable game machines, and yes PCs. MS is fully committed to the Xbox as a "games" platform, so MS is invested in that experience, but in addition they are seeking mutual benefit by providing Xbox gamers with features and services that are intended to be the software backbone for a breadth of consumer experiences.
In broad strokes we can say Nintendo is about unique experience, Sony is about consumer electronics/hardware, and Microsoft about software. Of course ALL THREE categories overlap and none are completely overlooking any of these, but their vision for WHAT makes a good game now, and what is the proper foundation for the future are very different. They all believe their market position is right, for them, for profits. But their vision of when, and how, those will be profitable vary depending on what their vision is.
There are plenty of nuances to read in there (IMO at least), e.g. Xbox marketshare, especially in the west, is more important at this point to MS from a stategic standpoint than it is from a financial one. MS in many ways needs the Xbox in the living room to reach their vision of Live, but also to obtain a broader presence in software. Likewise Sony has bet the farm on the PS3 and in many ways has thrown a haymaker--they have played their hand for the future, not only in console gaming, but as a platform with far reaching impact on the digital world outside of movies and games. The PS3 could lose a ton of money, yet still be a success for Sony if that means it establishes BluRay and Cell for long term market strength. Without the PS3 Cell has no hope and BluRay would be in a serious format war, and without those two Sony has a bleak future. Yet if Cell and BluRay win out, the PS3 could cost Sony significantly yet still be a big win for Sony overall.
Consoles have evolved beyond "the game" and are becoming an important part of the digital home. Each is staking their piece, and dare I say that only Nintendo is actually primarily concerned with profits this gen. Sony and MS both have a lot weighing on their consoles beyond console sales this generation.
Dare I say that Sony will be tickled pink if the PS3 sells 100M units in 6 years, but loses 1B, but Cell is established as a long term platform and BluRay wins out, and thus generates a lot of profits in the CE and movie studios. Likewise MS would probably be happy about breaking even every year in year 4 and 5 and having firmly established a brand for their software-entertainment and a buffer to protect the PC and a means to bring the PC experience to consoles.
I like to think of it as an open ended MMO! Winning really depends on how you play the game for these companies
