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State of the Console War: Sony Outsells Microsoft, but is the PS4 Really Ahead?

Sony has sold more units, but is it really ahead?

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gamerheadlines.com
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n4rc1401d ago

This should be fun.. Lol

Aggesan1401d ago

The logic in the article is flawed. What the article fails to consider is that money earned is mainly from software, not from hardware, and more consoles sold equals opportunity to sell more software.

H0RSE1401d ago

The article is not flawed, in the sense that it is purposely using only consoles for it's data. He even sets the criteria by stating:

"And for those of you wondering, my criteria for who’s, “in the lead” is simple. It will be who ever is profiting the most from their console’s success."

Who is profiting from their "console's success," as in the success from console sales alone, not in addition to the games people buy.

It's not to say that the author is "forgetting" to factor in software, but rather that for his "experiment," it is irrelevant, since he is focusing only on console sales, thus the title of the argument: State of the CONSOLE War.

Eonjay1401d ago (Edited 1401d ago )

It wrong because he assumes that the companies are able to make consoles for free. No. They have to pay for the console upfront. It was revealed that Microsoft manufactueres 1 million consoles a month for thefirst year. The have to sell through 94% or 11.3 million of those units before the revenue overtakes the cost.

Sony is making about 17 million. They have to sell 95% or almost 16 million before the revenue overtakes the cost.

Being super generous to Microsoft we can say that they have sold about 500k this year and there for they are about 4% of the way to breaking even.

For Sony lets say they have sold 800k or about 5% of their break even number.

Any calculation that considers revenue and ignores cost is short sighted because you have to pay to have a product manufactured before it can be sold. Period.

Edit: The winner used to be determined by who got the most systems into peoples homes. This site asserts that the winner is the one that can extract the most profit out of us. Our goal probably should be to buff their bank accounts. I'm admittedly more of a Sony guy, but I must also admit that it makes no difference to me which company has the higher profits. That is none of my concern.

ravinash1401d ago

It just sounds like another case of spinning the numbers to make what ever side your supporting sound better.

But I would have to agree that if you want to see who is in the lead going on what profits they are making, then you have to include the software sales. This is because these companies make an active decision to lower the price of the console in order to increase their market share and therefore increase the software sales.

360ICE1401d ago

Agree. More flawed logic:

"As a man who invests $1,000,000 and brings in $1,000,0001 is bringing in more physical money, but increasing his value less than a kid who invests 50 cents and brings in one dollar."

Consider that. (I'm sure it's really a spelling mistake, though)

johndoe112111401d ago

@Eonjay

I'm sorry but horse is completely right. Based on the author's criteria the xbox is clearly winning. What you need to understand is that the author has to use this criteria because if he uses any other he wouldn't have an article to write and he wouldn't have something to make xbox fanboys feel good about.

This article reeks of desperation and the author is stretching so far in order to make himself feel good about his purchase he better hope he doesn't damage his spine. This is shameful journalism at its finest.

FarEastOrient1401d ago

If this was given to shareholders the writer would've been kicked out of the office. Tear downs do not include royalties, advertisement, etc. At the same time every single Xbox One generates a small amount of revenue to Sony. The writer didn't include R&D that both companies had to pay for as well take into consideration that each market has a different profit margin.

badz1491401d ago

This article took a page from from MS spin technique and somehow try to convince people that being ahead is not actually being ahead. Major Nelson would be proud!

morganfell1401d ago

Sorry johndoe but you and horse are wrong. What is really occurring is the writer defined success in very barrow terms in order to allow one console to trump the other. You can say he can look at it like that, you can try to find the logic, but reality will give you the beatdown every time.

The reality is you cannot truly look at one small facet that defines winning and then award a first place. Pulling out one point and separating it from all other factors because it makes you feel good is neither honest nor accurate market analysis.

Winning or being ahead as the writer titles it encompasses a myriad of factors and a hardware provider must take the lead across the majority, or at least the most important points in order to be considered "being ahead".

Manufacturing costs, units sold, public perception, software attach rate, public demand, projected software library - exclusives and multiplatform, etc etc. There is more to calculate than a single number. People can spin matters how they want but one single console is hitting the majority of those points ahead of the competitor.

miyamoto1400d ago

M$ seems to spin spin spin anything the way they want them to be spun. They are so desperate liars' vain attempt to look good is going nowhere.

+ Show (6) more repliesLast reply 1400d ago
n4rc1401d ago (Edited 1401d ago )

Well I was right... That was fun... Lol

Its twisting figures only if they aren't twisted in their favor..

Profits don't matter, only sales because that where you are winning.. How is that any different then what youre accusing the author of?

truefan11401d ago

Lol its hilarious watching the ps4 defense team come out whenever another perspective is brought to the table. He clearly states his logic and by his logic MSFT is profiting more than Sony, accept it. You guys shouldn't be worrying about sales anyways you should be wondering why Sony isn't giving you any games. I'll be playing the project spark beta and PvZ with 2 weeks and Titanfall in one month.

Hicken1401d ago

Why do I get the feeling you wrote this tripe?

rawz1393d ago (Edited 1393d ago )

@truefan1
It's not a defense team. Like n4rc said it's twisting the logic (one should not say figures, because they are correct).

If we go down the profit road, we should bring the real profi logic in. How much does Microsoft spent money on adverts? How much did it cost to develop the console? (Most of you have heard about the costs of the controller, I'm sure.) How much more profit does the bigger marketshare bring to Sony? (Software, PS+ subscriptions)

kingdip901401d ago (Edited 1401d ago )

Of course you can make whatever console you want to be the winner if you decide on the criteria that decides the winner. I could say that the Nintendo wiiu is the winner because it has more exclusive ip's.

Generally people go off sales numbers and install base and the majority rules...

showtimefolks1401d ago

here is what is funny when its their console of choice that sells than all that matters is the sale numbers and nothing else. but when another console sells than the excuses like

well this or that system has more games
i like the controller better
online service is better
oh i have more friends who bought that so i will too

end of the day buy whichever console you want and as long as you enjoy it that's all that matters or should matter

GenericNameHere1401d ago

As time goes on, parts will become cheaper, therefore both will be cheaper to make, thereby slightly increasing profits. Right now, both are doing really well, and MS should be happy that they had such loud wake-up call from fans and other gamers alike to reverse their original plans for the Xbone, which is why it's doing so well now. Instead, we should see this as a way that while mobile gaming is now such a huge thing, consoles still have a big market, and that they'll still be around for quite a while.

As for "winners" of the console wars, it really depends on what you look. Personally, I think all the 7th gen consoles were both "winners" and losers".

Xbox - "Winner" because they managed to steal such a huge market share from Playstation. "Loser" because even though gamers see the X360 as a huge success, investors still want to sell it off. It's really not making big money for MS.

Playstation - "Winner" because they were the underdog this gen. They started with "No Gaemz!", but have reached the 8th year with some of the best games ever, and shows that Playstation is still a force to be reckoned with. "Loser" because the early years were a train wreck, and the PS3 are up so much of the PS1 and PS2 profits.

Wii - "Winner" because the Wii printed money, simple as that. "Loser" because they stuck with SD for so long, and Nintendo was then branded as a kiddie console. The Wii didn't have such a great 3rd-party support, and it's affecting the Wii U. They did the same thing with the N64, which is be stubborn and ignore to live in the present, and we all know how well the GameCube did, sales wise.

In terms of who "won" in transitioning to next-gen, MS and Sony won, no question. Nintendo lost because the audience for the Wii either went on to iPhone games, still sticking with the Wii and playing Just Dance 4 and not knowing the Wii U IS a new console, or stopped caring about the fitness gimmicks altogether, and just went to a real gym instead.

GutZ311401d ago

In other words, Yes, it is ahead.

Ra30301401d ago (Edited 1401d ago )

Do you apply R&D cost into your thinking? Also isn't the $399 and $499 cost of console a United States number? Cost around the globe vary for each country and each console. Getting back to the R&D cost no company can claim profit until they cover the R&D cost. So you must add these numbers in because in the end no matter how many you sale if you can't cover that cost it may put you into bankruptcy.

showtimefolks1401d ago

sony stated that they didn't have much R&D cost because they are using most off the shelf parts

I think MS is the same although i think they did have big R&D cost for Kinect 2

ziggurcat1401d ago

Post link proving that's what Sony said.

mkis0071401d ago

Zigg
Its true that is what was disclosed. Amd would have handled most of the r and d costs

jackanderson19851401d ago

yeah but going down that route you've to also take in account the tax breaks coming from the R&D, if that R&D is used in another area of the business (to apportion costs correctly) and a number of other factors (salaries, light/heat costs, rent costs etc etc)...

one of the sony execs said in an interview to Eurogamer that they need the equivalent of a game and a half of additional sales beyond the base console to be making a profit on the console itself... going from a euro perspective that's around 90 euro give or take.

start of the cycle of consoles, they're sold at a loss.. .it's always been the way and most likely always will... software is generally the biggest driver for profits for the game companies so it'd probably be better to do an analysis of it that way but unlikely to happen seeing as no-one really knows what percentage the companies get from the games being sold on the platforms

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