Sony PS5 buyers and owners

Morgan Jolley

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Leo - I stand corrected and apologize. I had tried to look up games being reissued like that and couldn't find any. Looked a bit more after your recent comment and found a handful. Looks like reissues of hit games (the CoD MW trilogy for example), kind of similar to the classic rereleases most consoles see. I'm curious how much money was made on these.

You're right that you don't see this with PS3 games...because they don't play natively on the PS4. Instead, they need to port them up. Which they have for some like Uncharted, Assassin's Creed, the Batman Arkham games, The Last of Us, etc.

Jeff - my point was that the Xbox brand was pretty weak. Significantly lower hardware/software sales backs that up.
 

hildegard

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I think that the Sony team is creatively trying to explain away some sort of engineering limitation, because this must be related to stability of one of the components - That's the only reason I can think of to keep voltage elevated even when clocks are reduced.
 

Edwin-S

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I look at the success of a game system from this perspective. If the manufacterer comes out with a new gen of the console then that means from their POV the last one was successful. When the company announces the end of line or fails to release a new generation then that is loudest announcement that the last gen was a failure. SEGA's Saturn is a good example of that philosophy. The failure of that system hailed the end of SEGA as a console maker.
 

Morgan Jolley

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Edwin - well, are we talking about the success of a game system or the success of a brand?

The Wii U was a pretty significant failure, selling only 13 million units worldwide. It was preceded by the Wii and followed by the Switch, two of Nintendo's most successful products. Your criteria would suggest the Wii U was a success because Nintendo released a follow-up.

Also, the Saturn wasn't Sega's last console...the Dreamcast was. Both sold roughly the same amount. And if you look at their sales, the only real big success Sega had was the Genesis, yet they were a major brand in hardware until around 2000.

My point is that it's really hard to use console sales as a measure of how successful a brand is. Microsoft was hemorrhaging money on the Xbox brand from the moment it launched (as any company going into a new market would) and didn't turn a profit until 2007...which was then basically erased with the RRoD issue and the warranty extension for 360 consoles. Now, Xbox is more profitable as a streaming subscription service brand than as a hardware brand. It's still a major player in the console space but it's basically relegated to 3rd place permanently because of how weak it is outside of the US.

Interesting sidenote: Sega's most successful console was the Genesis, selling about 35 M units. Microsoft's worst-selling console was the original Xbox, which sold about 24 M units.
 

Sam Posten

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Just a reminder that this is all you guys talking out your butts. The guys who actually do market research on brand value say differently, but whatever. It's a dumb fing argument.

 

Edwin-S

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Edwin - well, are we talking about the success of a game system or the success of a brand?

The Wii U was a pretty significant failure, selling only 13 million units worldwide. It was preceded by the Wii and followed by the Switch, two of Nintendo's most successful products. Your criteria would suggest the Wii U was a success because Nintendo released a follow-up.

Also, the Saturn wasn't Sega's last console...the Dreamcast was. Both sold roughly the same amount. And if you look at their sales, the only real big success Sega had was the Genesis, yet they were a major brand in hardware until around 2000.

My point is that it's really hard to use console sales as a measure of how successful a brand is. Microsoft was hemorrhaging money on the Xbox brand from the moment it launched (as any company going into a new market would) and didn't turn a profit until 2007...which was then basically erased with the RRoD issue and the warranty extension for 360 consoles. Now, Xbox is more profitable as a streaming subscription service brand than as a hardware brand. It's still a major player in the console space but it's basically relegated to 3rd place permanently because of how weak it is outside of the US.

Interesting sidenote: Sega's most successful console was the Genesis, selling about 35 M units. Microsoft's worst-selling console was the original Xbox, which sold about 24 M units.
The game system is the brand. Nintentdo's Wii U was a failure so Nintendo cut bait and ended the line. They then reinvented the system and rebranded it as "The Switch". I do not consider "The Switch" to be a direct descendant of the WII line of Nintendo consoles. It is a complete new line that was successful, so it is more than likely that there will be a "Switch 2" released. If "The Switch" had failed then that would have been the end of that system. Either Nintendo would attempt yet another rebranding or they would abandon the market. My point was that it doesn't matter whether we as consumers consider a console system as a "loser" in the console wars.

All that matters is the actions of the company that manufactures the system. If they release another console In the line then from their POV it is a success because it met their expectations. If Microsoft had announced that the XBOX line was dead then that is the only true measure of failure. Whether the PS4 outsold the XBOX doesn't matter to MS. Sales managed to meet their expectations, so that ensures a new generation under the same banner.....period.


Just a reminder that this is all you guys talking out your butts. The guys who actually do market research on brand value say differently, but whatever. It's a dumb fing argument.

Was that called for? It is a discussion site and I don't see how I'm talking out of my butt by saying the only real measure of a console's success is if the company making it decides to market another one in the same line. If a console was truly a market failure then the company making it would stop releasing new ones in the line, either by leaving the market or by redesigning it and rebranding. Whether a console is in "third" place or "first" doesn't matter as long as the company decides there is enough value to continue making it.
 

Morgan Jolley

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I don't entirely follow the line of thought that consoles follow a "line" when they're released. Was the NES successful? Yes. That led to the Super NES. Was the SNES successful? Also yes. But by your reasoning, it was not successful because Nintendo then made the Nintendo 64 which didn't quite follow the ___ NES line of naming convention. And the N64 must have been a failure to lead to the GameCube, which must have also been a failure because it led to the Wii. And the GameBoy was a success but the GameBoy Advance was a failure because it was followed by the DS.

In reality, Microsoft kept Xbox alive for nearly a decade despite losing money on the venture because MS is really rich, were able to afford the losses, and knew they would eventually turn a profit. They would also be incredibly stupid to release a product that didn't have the name "Xbox" in it, just as Sony would be stupid to release a product without the name "PlayStation" on it. If anything, the fact that MS has an incredibly convoluted naming convention (Xbox, Xbox 360, Xbox One/S/X, Xbox Series X) and keeps changing the focus of each platform (Xbox was purely games, 360 was everything, One was originally TV-focused, Series X is hardcore gaming) shows that they have no long-term vision or direction for their platform. Nintendo really messed up with the Wii U, but they have always been focused on gaming. Sony has veered a little from gaming to entertainment but the gaming functions have always taken center stage.

I also don't know how your reasoning applies to Sega: Master System, Genesis, Game Gear, Nomad, Saturn, Dreamcast?

Sometimes, companies stick with losing strategies because they're boneheaded or stubborn, not because they work. The one area where MS is doing really well is with subscription services. Everything else is really appealing to a small base of loyal fans and not really anyone else.
 

Edwin-S

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I don't entirely follow the line of thought that consoles follow a "line" when they're released. Was the NES successful? Yes. That led to the Super NES. Was the SNES successful? Also yes. But by your reasoning, it was not successful because Nintendo then made the Nintendo 64 which didn't quite follow the ___ NES line of naming convention. And the N64 must have been a failure to lead to the GameCube, which must have also been a failure because it led to the Wii. And the GameBoy was a success but the GameBoy Advance was a failure because it was followed by the DS.

In reality, Microsoft kept Xbox alive for nearly a decade despite losing money on the venture because MS is really rich, were able to afford the losses, and knew they would eventually turn a profit. They would also be incredibly stupid to release a product that didn't have the name "Xbox" in it, just as Sony would be stupid to release a product without the name "PlayStation" on it. If anything, the fact that MS has an incredibly convoluted naming convention (Xbox, Xbox 360, Xbox One/S/X, Xbox Series X) and keeps changing the focus of each platform (Xbox was purely games, 360 was everything, One was originally TV-focused, Series X is hardcore gaming) shows that they have no long-term vision or direction for their platform. Nintendo really messed up with the Wii U, but they have always been focused on gaming. Sony has veered a little from gaming to entertainment but the gaming functions have always taken center stage.

I also don't know how your reasoning applies to Sega: Master System, Genesis, Game Gear, Nomad, Saturn, Dreamcast?

Sometimes, companies stick with losing strategies because they're boneheaded or stubborn, not because they work. The one area where MS is doing really well is with subscription services. Everything else is really appealing to a small base of loyal fans and not really anyone else.
You made some pretty good counterpoints regarding my reference to console "lines", so I'll just make it more simple. Obviously, the XBOX console is meeting Microsoft's corporate objectives. If it wasn't then they would stop making them. It has nothing to do with being stubborn. While being in first place with sales would be ideal, it obviously is not a concern with Microsoft where they "place" in unit sales. There are factors other than just unit sales driving Microsoft's decision to keep releasing a console regardless of whether it sells the most units or not. You may think the XBOX is "weak" because it is in third place behind the PS5 and Nintendo, but obviously Microsoft doesn't think so since they keep releasing new generations of the hardware. When the XBOX stops meeting their objectives then Microsoft will cease making them regardless of their supposed "deep pockets" or assumed "stubbornness".
 

Morgan Jolley

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I think Microsoft has essentially acknowledged their weak position with hardware sales, but the enterprise is financially viable enough to keep going. Someone always has to be in last place.

In reality, companies don't stop when they have one failure. They tend to stop when they have 2 in a row. And I wouldn't call the Xbox One a failure, but rather a really solid 3rd place that's probably going to continue to be stuck there for a very long time. Their brand is essentially a 3rd place brand.

EDIT: This is sort of turning into a discussion about profitability. I didn't argue that the Xbox line was no profitable. I believe (I could double check) that early on I even said that MS is making a lot of money from Game Pass and XBox Live which is making it extremely profitable for them. But the brand itself is quite weak compared to the competition. Nintendo has more liquid capital than the gaming divisions of either MS or Sony. Sony's PlayStation line consistently sells excellently in every generation. Microsoft has only had 1 console that sold really well (out of the 3 generations, consisting of like 6 models total) and even then it was the 3rd place finisher at the end of the generation.
 

LeoA

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Microsoft has had three iterations of the Xbox. At most you can squeak it out to 4, if you must (Although I personally think it's a stretch to view the Xbox One X as something more than just a souped up revision of the Xbox One).

And I've told you this many times before, but you always ignore me, Morgan. You don't have the first clue what the working capital is for either Sony or Microsoft's gaming divisions, since that data simply isn't published.

What we get are corporate-wide figures for Sony and Microsoft in annual reports. Corporations far larger than just the Xbox and Playstation portions of each firm.

For your "liquid capital" that you think Nintendo has more of (i.e., the Cash and cash equivalents line), Microsoft's 2019 annual report shows a figure of $133,819,000,000. Nintendo's 2019 annual report shows a total of $5,321,000,000‬.

Not sure how you can take that and seriously suggest with any certainty that Nintendo has more cash on hand to play in this arena. While Microsoft is a far larger and more diversified company, we have no possible way to divvy that total up and determine what amount of resources the Xbox portion of the business could access.
 
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Edwin-S

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Their unit sales are in third place. In terms of recognizability in the market the XBOX brand is equal to PlayStation. If anything, Nintendo's Switch is in third place in terms of branding. Ask the average non-gamer if they have heard of the XBOX and they'll answer that it is Microsoft's game console. Ask them about the SWITCH and they are most likely to answer with, "that's what you use to turn on the lights". There is more to branding than just raw sales.

Anyway, the argument is just going to become circular. You say the XBOX brand is weak due to sales and I'm saying that Microsoft obviously doesn't think the brand is weak because, regardless of being third in sales in the last gen, their objectives were met, warranting the release of another generation of consoles.
 

Edwin-S

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Nintendo has more liquid capital than the gaming divisions of either MS or Sony.
Do you seriously believe that Nintendo has more liquid capital than either MS or Sony's gaming divisions? I can tell just by the hardware alone that MS expends a shit ton more money on its gaming division than Nintendo does. Add in marketing costs and MS's expenditures in their gaming division would dwarf anything that Nintendo is spending. The same holds true for SONY versus Nintendo.
 

Morgan Jolley

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Heavy disagree that MS met their goals with the Xbox One. When was the last time a Kinect game came out? How did that all-digital future work out? Does anyone still pass HDMI through the box?

Microsoft as an entire company has the highest cash reserves. Nintendo actually has more than Sony. MS makes a lot of stuff whereas Nintendo only makes games. Additionally, Nintendo turns a profit on every piece of hardware they've sold minus the Wii U whereas MS has always taken a small loss (made up with software sales). I showed stats a bit back that Nintendo and Sony have roughly 1.5-2x the software attach rate for their consoles that MS has (even with the Switch already) so Nintendo is earning more on their hardware per unit than either competitor.

MS made about $11B from Xbox, roughly 10% of their overall revenue for FY2019. Nintendo made about $10B with an operating profit of $2.3B. I couldn't find out how much Xbox revenue turned into profit, but if their revenue is about 10% Xbox then their overall annual profit of $13.2B would produce about $1.3B Xbox profit (this is a guess, though). For reference, Sony made $1.6B in profit from PlayStation on $12B revenue.

As for brand recognition, I think that's a weird argument. Do people hear "Xbox" and know it's MS' gaming console? Sure. Do they know who Master Chief is? Cortana? Marcus Fenix? Not really. But do they know what the Wii was? Know who Mario and Bowser are? Also, the Switch has sold more units than the Xbox One (regular, S, and X) so I would be surprised if people knew what the Xbox One was but didn't know what the Switch was. And even if they do know what the console or brand is, they clearly aren't giving MS their money so the value is minimized.
 
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LeoA

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It's a bit harder to locate the figure for Sony, but looks to be approximately 21.89 billion compared to Nintendo's $5.321 billion. So approximately four times the ready cash that Nintendo has on hand.

As for attach rates, nobody knows where the Xbox One stands. Microsoft doesn't release that data. But I doubt it's drastically different. People aren't buying an expensive Xbox One and finding a severe lack of content to buy compared to a Playstation 4.

The library is healthy and vibrant. And like I said earlier, substantially the same as the PS4 library. No reason to think the average XB1 owner is buying a lot fewer games than the average PS4 owner.
 
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Morgan Jolley

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Sony has 4x the cash on hand but also makes a wide range of electronics, has a music business, and produces movies. Nintendo only makes games.

I also showed the numbers above on the net profit and revenue from each company from their videogame business. Nintendo has a higher profit.

I honestly am not that interested in a Sony vs Nintendo discussion because they're definitely top 2 and relative close year to year overall.
 

LeoA

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For Sony's cash and cash equivalents, I found an official figure of 1,470,073,000,000 yen for the fiscal year ending on March 31st 2019. Can't find the figure for the latest fiscal year, but perhaps that report hasn't been released yet.


Utilizing some other figures in the same report that have both a Japanese yen and USD amount to approximate an exchange rate (107.50 yen to 1 USD), that gives us a total of $13,675,097,674 as of 13 months ago for Sony's cash. Still well above Nintendo.
 
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Edwin-S

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Jesus are you guys still arguing about this bullshit? =)
:lol:

I'm pretty well done on my end. No convincing Morgan and he isn't going to convince me that the XBOX is a weak brand just because it was supposedly in third place in sales.
 

Morgan Jolley

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Sony announced that they've sold 110M PS4s. Nintendo announced recently that they've sold 56M Switch consoles. Xbox is at about 47M console sales.

Given that the Switch is only halfway through it's life cycle and is still selling really well, I don't see how this can be seen as anything other than MS in a clear third place.
 

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