Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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Gross profit is a metric that doesn't fully account of costs of running a business, when people refer to profits, they typically look at operating income.Did you read your own source or are you agreeing with me?
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Varteras
Member
Gross profit isn't actually what they got to keep. Operating expenses wiped out much of that. Operating income is what you want to look at.Did you read your own source or are you agreeing with me?
It's ridiculous to suggest everything was fine in the PS3 gen. Look at their operating income during that gen. Nothing but losses the entire gen.
ChorizoPicozo
Member
there was a meme back then:It's ridiculous to suggest everything was fine in the PS3 gen. Look at their operating income during that gen. Nothing but losses the entire gen.
"Sony is going to announce bankruptcy"
Did you read your own source or are you agreeing with me?
I did. Do you know how to read a financial statement? Operating income is how much Activision retained after paying its expenses for the year.
ZehDon
Member
Well, which one is it? The idea that Ryan is playing some kind of 4D chess to "protect" (?) Sony's first parties doesn't really work, not when his on-the-record statements stipulate very clearly that he believes that those first parties are not enough to keep PlayStation alive - only Call of Duty can do that. So, either he's outright lying to regulators, or, he legitimately thinks PlayStation's first parties are, ultimately, worthless. In either case, Jim Ryan comes out pretty poorly without anyone having to do anything other than listen to Jim Ryan.
What sort of take is this? He can see the value of first party games and not think they are worthless while understanding the importance of third party games like COD to their business. Part of that income probably funds their first party anyway.
Yoboman
Member
Where did I say anything about net profit? I just said profit. If I was talking about operating income I would say operating income
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I kinda knew you were going to go down this route. If you think Net Profit is a meaningful metric in this conversation or people equate 'profit' to 'gross profit', all the power to you.
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Predictable response. Misplaced pride is a sad thing to witness.
I remember when I didn't want to admit to a mistake on the internet, sad sad times.
Yoboman
Member
I don't think you know what you are on about. Gross profit is an indication of the levels of profit after the production of the game (COGS). Operating expenses are far more malleable especially as it is an entity being absorbed by another and the conditions of day to day operations, marketing, future R&D etc. are far more subject to change.
Take it how you want, I was clearly talking about gross profit as those are the numbers that match.
Yeah it's sad to see your gotcha moment fall flat on its face. Take your ball and go home
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Minecraft
Minecraft Dungeons
Minecraft Story Mode
Minecraft Legends
Quake Remastered
One game? That's not how counting works.
Haven't even gone into MS allowing Ori ports to Switch, Cuphead to PS4 and making a PSVR exclusive version of Minecraft.
Varteras
Member
Because typically when people say "profits" they are referring to the money a company got to keep. That's not your fault. That's just how it normally is. So unless you get more specific, that assumption will pretty much always be made.
ZehDon
Member
Apparently, Ryan can't. According to Ryan, if nothing else changes, but PlayStation lost Call of Duty, PlayStation folds. It's an illogical statement, one that doesn't seem to align to the real world, but, it's Jim Ryan's statement none-the-less. Assuming he's telling the truth - and, I don't think he is - PlayStation's continued existence depends solely on Call of Duty. All of PlayStation's first party titles, every other third-party partner - none of it, it seems, amounts to much of anything.
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lostinblue
Banned
Does this merger have a deadline to happen like ARM+Nvidia did?
Your OP makes even less sense if you model using GP. Half the GP would mean that Activision would be running an actual loss of 1.5 billion or so. There wouldn't be any profit assuming current expenses.
Net income is a better metric because game companies don't capitalize costs until games reach a certain point. Research for new games, pitches, and other activities prior to release are counted under operating expenses. Employees also need a place to work, support staff, and other costs which aren't included under COGS. COGS for software is also less relevant because the marginal cost of production is near zero.
Varteras
Member
He's just being dramatic and anyone with a clear head knows it. I doubt anyone at PlayStation Studios lost sleep over an executive making hyperbolic statements in order to do everything he can to protect a cash cow that Sony puts no money into aside from marketing.
Going back to the previous point, where are you getting the assumption that Gross Profit would halve without Sony? we don't get Gross Profits by Segment only Net Revenue and Operating Income
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You believe what you want to believe. First party output on the PS3 was stellar but they suffered only losses because their third party sales tanked. First party can attract people to the console but third party sales from COD or FIFA can still be invaluable to your business. Does that mean that first party output was worthless? Xbox also relies very heavily on COD, more so than PS (have you seen the platforms top seller every month for the past 5 or so years? 3 or 4 CoDs in top ten) but I'm sure you would argue MS first party isn't worthless but COD is still important. If CoD didn't exist on xbox I'm fairly certain it would be in the red for the past 5yrs.
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Banjo64
cumsessed
True.
Interestingly nothing new. Xbox allowed Rare to continue releasing Game Boy and DS games post acquisition (2002):
- Donkey Kong Country
- Grunty's Revenge
- Banjo Pilot
- Sabre Wulf
- Donkey Kong Country 2
- Donkey Kong Country 3
- Diddy King Racing DS
- Viva Piñata Pocket Paradise
It is worth noting that Moon had to approach Microsoft for the Switch port, however Microsoft were very accommodating to the request. They denied PlayStation the port though.
Microsoft don't own the Cuphead IP, nor published the game. They had no control over the IP. That's why the game isn't on Game Pass either.
Kinda makes sense given how much of Playstation's revenue comes from third parties. Playstation could remain profitable but it would likely require restructuring to survive an exodus of third party players.
I admit I wasn't too sure of that one. But the dev emphatically said in 2017 that it could come to other platforms, but would never be released on PlayStation. My inference from that is this was based on a console exclusivity deal tied to the extensive pre-release support and marketing Xbox provided.
Getting a PLayStation release after all this makes me imagine MS had to be involved. But I could be wrong…
Banjo64
cumsessed
Yeah I wasn't aware of those comments - definitely may have needed MS ratification in that case.
The_Mike
I cry about SonyGaf from my chair in Redmond, WA
Because the majority on a forum are non casual gamers based to a specific platform.
Meanwhile people in here are in shock over Sony earns around 6 to 800 millions a year on call of duty, which makes it their primary cash cow.
People in here are at the same time confused over why Sony don't want to miss cod and how crucial it will be to them.
Tl Dr - people on a forum are living in a bauble where they hype each other up on things the casual gamer doesn't know or care about.
Robb
Gold Member
I personally think removing Sony from the marketing of the series will be one of the biggest gains for MS. Getting CoD associated with Xbox instead of PS is what will make people move over time. Additional content will just be icing on the cake.
Varteras
Member
I think Sony was just caught completely off guard by this deal. They were already making moves to bolster first-party output and put themselves in a position to weather a reduction in big third-party titles. They had been in talks with Bungie almost 6 months before Microsoft and Activision started talking, if I remember correctly. I don't think they, or anyone really, imagined a world where ABK would be bought by a competitor. So I think for them this accelerates or expands their plans in a way they really didn't want and hadn't even considered prior.
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feynoob
Banned
Fyi: 10m copies of 3rd party sold on Xbox/PS generates $180m (30% of the game sale).
That is equivalent of 3m copies of first party game sale revenue.
First party games make less money, unless they sell 10m+ in the first year, Since first year price is around $50-$70. That is because of the game production cost is going to be high, and the game would need to recoup that cost first.
Minecraft
Minecraft Dungeons
Minecraft Story Mode
Minecraft Legends
Quake Remastered
One game? That's not how counting works.
Haven't even gone into MS allowing Ori ports to Switch, Cuphead to PS4 and making a PSVR exclusive version of Minecraft.
If you're counting like that with minecraft story mode or iterations in a franchise you might aswell start counting things like Destiny The witch queen, Destiny Lightfall, MLB 2020, MLB 2021, MLB 2022...
Ori doesn't help your case though, it works against it. Moon studios convinced MS to do a switch release, they wanted to also do a PS release but MS rejected it specifically for PS. MS also don't own Cuphead at all.
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POKEYCLYDE
Member
And yet, Playstation survived and is thriving. When a huge portion of 3rd party games for an entire generation were worse on Playstation, they recovered.It's ridiculous to suggest everything was fine in the PS3 gen. Look at their operating income during that gen. Nothing but losses the entire gen.
But Sony would have regulators believe one title being marginally worse on Playstation will cause such a cascade of effects that Playstation as a business would never be able to recover.
You can look at how abysmal a generation the Playstation 3 was for Sony (evidence provided by yourselves) and see that they recovered just fine.
Sony is bullshitting when they say a worse version of CoD would destroy their gaming business to a point where they couldn't recover.
But how did they recover? By having the better performing third party games and COD marketing agreements during the PS4. Read back what you said:
Made it seem like everything was dandy during the PS3 when xbox had the COD deals with 1 month map pack exclusives on 360 and the better performing third party games. Reality was that Playstation was losing money year after year until it had better performing games and the marketing agreements for COD during PS4. Those things did hurt them immeasurably during PS3.
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Neofire
Member
Timdog? Lol
POKEYCLYDE
Member
Entire swaths of games were not just subpar on PS3, they were empirically worse. This was largely Sony's fault for having a hard to develop for console.
By simply having a comparable architecture to Xbox in the next generation, solved that problem.
Sony is acting as if any negative difference on Playstation (even small ones) in regards to a single title will cripple their entire gaming business.
I'm not saying things were dandy for Sony during the PS3 generation, just that despite most 3rd party games being worse in comparison to the 360, they managed to recover.. they managed to recover even before the PS4 released. Largely in part thanks to their first party games.
Yes of course the worse performing games was their own fault of using complicated architecture but do you at least agree that poor performing games could have hurt the financial viability of their business until they righted that wrong with the PS4? That the PS3 is not a good example of poor performing 3rd party games not hurting them?
No they didn't. Not at all. Where do you see a recovery. They even had to sell SOE to fund PS4 production. They were losing money every single year except PS+ launch then they lost money subsequent years too even with releases like TLOU1 and Uncharted 3.
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Minecraft, Minecraft Dungeons and Minecraft Legends are separate, distinct games in different genres. Comparing them to Destiny expansions of the same base game is rather inane. What were you thinking?
Might as well insinuate Gears 5 and Gears Tactics are the same game.
Minecraft Story mode is a freaking point and click game made by Telltale, not Mojang. How are you comparing this to DLC?
The MLB example clearly doesn't work since it's published on Xbox and Switch by MLB, not Sony, and the franchise presence on competing hardware comes from the developer being compelled to do so.
Sony confirmed that it was MLB's decision.
Actually, it does help my case. My initial comment was about MS putting their games on competing platforms, and the Switch qualifies for that. I didn't mandate it had to be PlayStation. It helps to read before replying.
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Not really accurate. Sony's been pushing to go the GaaS route for quite a while. They wanted to buy Leyou, a publisher, back in 2020. Leyou made multiplayer GaaS games. They've paid Deviation Games to make their upcoming ambitious AAA shooter a PlayStation exclusive, bought Jade Raymond's Haven (also making a GaaS shooter), expanded the scope of Naughty Dog's TLOU shooter and have multiple other studios working on multiplayer games. And of course you've mentioned the Bungie purchase.
They've been heavily investing in COD competitors for years now.
The_Mike
I cry about SonyGaf from my chair in Redmond, WA
Which call of duty competitors do they have atm?
In the market, none. In development? Several. For example, Deviation Games was formed by former Treyarch devs behind the likes of Black Ops. They're making an ambitious FPS game they've self-described as 'world class', and it'll have the standard COD setup of Single player Campaign + Multiplayer, with strong GaaS elements. Studio set up in 2019, Sony paid for full exclusivity in 2021.
Then there's Bungie's upcoming shooter after they wrap up Destiny 2.
Yet again the issue is him saying if they don't have the superior version of COD playstation goes under. That's non-sense and you know it. If he believes that are they paying millions a year to have the xbox version handicapped performance wise? He is being foolish period and not thinking before speaking. COD is not leaving playstation he knows that hence going with we are entitled to the premiere version of COD.
feynoob
Banned
I am the brawn. I don't have the brain capacity to follow some of these discussions.
Was more talking about it being one franchise. Fair enough wasn't aware what story mode was.
Minecraft has various publishers too where the majority of sales come from. Look at minecraft and look at the show in any NPD result. Have you never wondered why you see this in NPD results under publisher?
Because the game publisher can be SIE on PS and Nintendo on Switch for Minecraft too. You don't need to come up with a reason why a SIE game isn't a SIE game.
I did read, but you need to make up your mind about what competition is then:
If you're talking "dominant market leader outselling competition 2:1" you can't be talking about Nintendo Switch as competition in the same paragraph. If you're including switch as competition there is no dominance and no outselling competition 2:1. So decide what market you want to define when making your point.
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POKEYCLYDE
Member
I agree that the overwhelming narrative that games are worse on Playstation 3 hurt them financially. My point is that you can recover from that financial downfall. The tail end of the PS3 saw games like Uncharted 3, Journey, God of War 3, Resistance 3, The Last of Us and Ni No Kuni release.
These exclusives did more to recover the Playstation brand than 3rd party parity. The PS4 righted the wrongs of the PS3, but the PS3 was recovering on it's own merit. Afterall... didn't the PS3 end up outselling the 360 by the end of the generation?
In the graphic you provided...
Fiscal year 10, their operating income was in the positives.
The_Mike
I cry about SonyGaf from my chair in Redmond, WA
Devs are always self describing their games as world class.
If they didn't believe their games are world class, then they wouldn't believe in their own product.
It was also previous cod devs making Titanfall.
A great franchise, people liked it, but its nowhere near call of duty, far from it.
There were plenty of studios made by previous wow devs a decade or so ago, the only one breaking through was guild wars, which isn't as big anymore as well.
Previous working means nothing when we don't know what they made.
Again, Titanfall had all this, and fell flat.
Battlefield, a known franchise, has that, and is years past it's peak.
Can you tell me about the strong GaaS elements, or do I just have to take your word for it?
Diablo immortal has strong GaaS elements and gets slammed for it.
But you assume it will be a banger before it even gets released. We know nothing about the game at all.
Destiny 2 only shares being a fps.
Destiny 2 is a heavy grinding gear treadmill game where you have to play alot to get fun.
Its also a rpg lite.
CoD is an arcade shooter you pop up, take 3 matches and feels you got something out of it.
In every year that these games released Playstation was still in the red except 2010 with PS+ release year and GoW3. All subsequent and prior years ended in losses even with their big blockbuster releases like UC1,2,3, GT5/6, TLOU, Resistance 3, Ni No Kuni, etc. All still in the red.
I'm not sure how you can say their first party releases caused a recovery when you have the results right there. It did very little and they continued to be in the red.
That year was the PS+ release year I mentioned and it dropped back into the red the year after and a bigger loss the year after that. Not exactly a recovery. What about all the other years with their first party big hits like TLOU, UC1,2,3, GT5/6 etc. Why were they still taking a loss in all other years do you think?
The PS3 was outselling them globally but the loss of third party sales meant they couldn't recoup costs for their first party and hardware. They couldn't maintain themselves in terms of profits even with the barrage of first party releases. They needed that third party profit to keep their business viable. PS4 was the beginning of that recovery, not PS3.
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Tomeru
Member
I believe your post history removes any need for guesswork
Your commentary delves into unrelated discussion. I've cited examples of Sony already having games in the works to compete with the likes of COD for users time. Of course that doesn't guarantee the quality of the final output. Never said it did.
I have no idea why you posted multiple paragraphs about Destiny 2.
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