sonycowboy said:
CJ.
I think you're mixing a few things together.
1) ALL COMPANIES recognize revenue when an item is sold to an entity. That's not really the issue here so your little quote from Microsoft doesn't really mean anything. That's standard accounting practice.
I agree, it is standard practice, thats why Microsoft only mention it in their 20-K as a necessary housekeeping item. However, it is important since they are specifically connecting shipments to sales recognition here, which leads us to:
2) Microsoft's latest earnings release, seems to have specifically stated that "Xbox shipments have reached 21.9M units", not sales. I say "seems" because of some reason, my powerpoint is failing when I try to open it. Could someone please verify januswon's quoting of the Microsoft PR?
Thread:
http://new.ga-forum.com/showthread.php?t=56195&highlight=21.9
Microsoft Release (powerpoint - page 17):
http://www.microsoft.com/msft/download/FY05/MSFTQ4-05.ppt
It doesn't matter that Microsoft uses the term shipment or sales here. Microsoft say they recognise sales when they have made a shipment to retail.
3) You seem to be right regarding Nintendo as they use the word "sales", but it's specifically and purposefully seperated from revenue, so it's not crystal clear, so I'd be hesitant to say for sure.
They've got to sell it to someone, never suggested it was the consumer, actually mentioned retail to you in the other thread
. The one possibility that might make these numbers meaningless is if they include intra-company sales i.e. NCL to NoA and NoE here. That seems very unlikely given they specifically mention these are consolidated numbers.
4) We also don't know what Sony's "shipments" are defined to be. They do supply seperate "production" numbers from time to time, but primarily report shipments. The shipments could easily be to retailers / distributors, but we don't know for sure.
The "production shipments" mentioned in reports to shareholders
always tie-in with the numbers they announce as "shipments" in press releases.
I think it's certainly a reasonable point to clarify, but iif we don't have any definitions for various parts, it's dangerous to try and take it upon yourself to assume definitions yourself.
We don't have definitions for Nintendo, they don't flesh out their accounts to the SEC, that is a problem. If someone got their hands on the filings to the yuka shoken hokokusho it'd be clearer, perhaps.
Sony and Microsoft do however give detailed information out. Sony make it blatantly clear what they mean by their shipment numbers given in every quarterly and final year accounts. "shipment of products from manufacturing bases". Microsoft would be asking for class action lawsuits if they tried to mislead shareholders over hardware number shipments which they specifically tie-in with revenue. The assumptions being made here are: Sony's shipments from manufacturing plants > shipments to retail and Microsoft don't want not to get sued for lying to shareholders. Guess you could call them assumptions but it seems more common sense to me.
