Killjoy-NL
Member
Same as us then, but you're not wrong.
Xbox profits revealed in new FTC leak (Update: margins are not operating profit, article was misinformative)
- Thread starter I Master l
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DeepEnigma
Gold Member
Sony has streamlined their console building/revisions to where the PS5 became profitable less than a year after launch. Their profit margins will fluctuate as it will this year based on price cuts and marketing investments.
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Hudo
Member
That's what I am here for, at least.
Killjoy-NL
Member
Complaining can be a good thing though.
Imagine if people never did, then MS would've thought they truly struck gold with their original plans for Xbox One and Xbox would've been buried last gen.
Hudo
Member
Good for the shareholders, I guess.
As soon as they invest that surplus of money into making a new Motorstorm, I might contribute to their bottom-line as well! (Closing Evolution Studios was a cardinal sin...)
nemiroff
Member
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DeepEnigma
Gold Member
It's good for gamers as well. More success = more investment into games and services.
For Motorstorm, keep bot spamming them on twitter, lol.
LavitzSlambert
Member
I feel like I'm taking crazy pills looking at this infographic. The methodology is all over the place, it's a mess. The author is calling it "margin" when we are looking at "accountability margin" from Xbox, operating income from Sony, and net income from Nintendo. It doesn't help that Nintendo's financial statements are reported differently in Japan, and Xbox's figures are a complete mystery except for what's released in this leak.
I can't draw conclusions on whatever accountability margin is, could be anything in between gross profit and net income. I'd wager a guess somewhere between gross profit and operating income depending on how they track overhead costs. Probably closer to operating income.
But why are they using Nintendo's net income!? That is an after tax measure when operating income is pre-tax. To show how large of a difference this would be, I decided to do a few quick calcs of my own using Nintendo's public earnings reports. https://www.nintendo.co.jp/ir/en/
Operating income = 402,728
Net income = 313,784
(in millions of yen for 9 months, 7/1/22 - 3/31/23)
In USD, these numbers look different. I'll use the average USD x JPY for FY22 from Nintendo's annual earnings report, averaging 135.38 yen to 1 USD.
Operating income = 2,975
Net income = 2,318
(in millions of U.S. dollars for 9 months, 7/1/22 - 3/31/23)
Ok, so it looks like they ARE using the operating income number for Nintendo. So this would be an overall fair comparison, but now I question how the labels match up with the numbers elsewhere.
Looking at Nintendo's revenue... at the same 135.38 FX rate that 11,826 from the infographic in USD is 1,601,004 yen. Yet when I look at the 9 months of revenue from 7/1/22 to 3/31/23, Nintendo reported 1,294,217 yen which should translate to 9,560 USD.
Since Nintendo's fiscal year actually ends in March, and I am a huge fan of Occam and his razor, I took a look at full-year revenue for 2022 - it turns out that is 1,601,677. Extremely close to the infographic figure. So this Tweaker used Nintendo's full-year revenue instead of 9 months. Interestingly, that means Nintendo's operating margin was actually 31% during that stretch.
At this point I had wasted 25 minutes on this post and the calcs, so I didn't bother burning any more of my life away verify the Sony data.
TL;DR
Tweaktown infographic data is no good, both the measures and the data itself are largely bogus. Don't trust gaming/tech journalists to get anything right, especially financial data, just because they write about the industry. If you want reliable data, do the calcs yourself or get them from a trusted source for financials.
And last...
I can't draw conclusions on whatever accountability margin is, could be anything in between gross profit and net income. I'd wager a guess somewhere between gross profit and operating income depending on how they track overhead costs. Probably closer to operating income.
But why are they using Nintendo's net income!? That is an after tax measure when operating income is pre-tax. To show how large of a difference this would be, I decided to do a few quick calcs of my own using Nintendo's public earnings reports. https://www.nintendo.co.jp/ir/en/
Operating income = 402,728
Net income = 313,784
(in millions of yen for 9 months, 7/1/22 - 3/31/23)
In USD, these numbers look different. I'll use the average USD x JPY for FY22 from Nintendo's annual earnings report, averaging 135.38 yen to 1 USD.
Operating income = 2,975
Net income = 2,318
(in millions of U.S. dollars for 9 months, 7/1/22 - 3/31/23)
Ok, so it looks like they ARE using the operating income number for Nintendo. So this would be an overall fair comparison, but now I question how the labels match up with the numbers elsewhere.
Looking at Nintendo's revenue... at the same 135.38 FX rate that 11,826 from the infographic in USD is 1,601,004 yen. Yet when I look at the 9 months of revenue from 7/1/22 to 3/31/23, Nintendo reported 1,294,217 yen which should translate to 9,560 USD.
Since Nintendo's fiscal year actually ends in March, and I am a huge fan of Occam and his razor, I took a look at full-year revenue for 2022 - it turns out that is 1,601,677. Extremely close to the infographic figure. So this Tweaker used Nintendo's full-year revenue instead of 9 months. Interestingly, that means Nintendo's operating margin was actually 31% during that stretch.
At this point I had wasted 25 minutes on this post and the calcs, so I didn't bother burning any more of my life away verify the Sony data.
TL;DR
Tweaktown infographic data is no good, both the measures and the data itself are largely bogus. Don't trust gaming/tech journalists to get anything right, especially financial data, just because they write about the industry. If you want reliable data, do the calcs yourself or get them from a trusted source for financials.
And last...
Hudo
Member
I am doing my best. If I happen to see Jim Ryan somewhere, I will ask him to sign my copy of Pacific Rift.
DeepEnigma
Gold Member
LavitzSlambert
Member
You can't even trust that the numbers match up to the measures they claim to have used.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
The fact that they DON'T call it that, should lead us to realize it's not "operating margin". They wouldn't be using this phrase if it didn't mean something.
IntentionalPun
Ask me about my wife's perfect butthole
Eh it could go either way really.
Sometimes companies just choose weird terms to "socialize" internally that differ from something like general accounting practice terms, but mean the same thing.
"Let's not call it Profit, let's call it Accountability because every group is held accountable" or some shit.
OR yeah maybe it's some fuzzy math shit. Who knows?
Based on other emails that leaked Spencer and team discuss this like it's the same as beating Sony's profit margins.
edit: It could be something like this:
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Contribution Margin: Definition, Overview, and How To Calculate
Contribution margin is a cost-accounting calculation that measures the profitability of a product or the revenue that is left after covering fixed costs.
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Thick Thighs Save Lives
NeoGAF's Physical Games Advocate Extraordinaire
Btw, the author of the article took down that chart.
OP should be updated.
OP should be updated.
Bernoulli
M2 slut
Too late misinformation already out and viral
Well well....would you look at that.
Its been amazing seeing posts about this chart, lol.
graywolf323
Member
yep, the lie makes it half-way around the world before the truth has a chance to put on it's pants
the chart was wildly inaccurate but we're going to see it be cited by fanboys for years now thanks to that piss poor 'journalism'
Heisenberg007
Gold Journalism
FYI - margins are not operating profit, as the title of this thread incorrectly suggests. For example, Contribution Margin does not usually include fixed costs.
This CFO and Financial Analyst explains this whole thing well. Folks who have studied accounting would understand it easily.
This CFO and Financial Analyst explains this whole thing well. Folks who have studied accounting would understand it easily.
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Omnipunctual Godot
Member
Am I misreading something? It looks like they missed their budget by $4.7B. That seems substantial.
graywolf323
Member
it's really hilarious to see Sage arguing with this guy and calling him dishonest
DeepEnigma
Gold Member
StreetsofBeige
Member
$13B is Q1-Q3 actuals. $17.7B is FY estimate (Q4 not happened yet).
LavitzSlambert
Member
Not sure if he is the one who created that chart, or if he just took it at face value from someone else. Either way, removing it was the right thing to do and while it doesn't absolve the author for including it without due diligence, I am glad to see the public acknowledgement and corrective action.
Hopefully instances like this will encourage better vetting of numbers from publications in the future, but I have a feeling they might care more about the ad traffic it generates. Oh well, VGchartz lives on in our collective hearts!
LavitzSlambert
Member
Eh it could go either way really.
Sometimes companies just choose weird terms to "socialize" internally that differ from something like general accounting practice terms, but mean the same thing.
"Let's not call it Profit, let's call it Accountability because every group is held accountable" or some shit.
OR yeah maybe it's some fuzzy math shit. Who knows?
Based on other emails that leaked Spencer and team discuss this like it's the same as beating Sony's profit margins.
edit: It could be something like this:
Contribution Margin: Definition, Overview, and How To Calculate
Contribution margin is a cost-accounting calculation that measures the profitability of a product or the revenue that is left after covering fixed costs.www.investopedia.com
Even if they believed it did match up with operating margin, there is a simple explanation for why they would call it something different. Their ERP systems will certainly have an operating profit account, and to avoid confusion between that and this unofficial metric, a distinction must be made lest nobody is on the same page when looking at data.
It was either go with Accountability_Margin or BigPhils_Operating_Margin and I know what sounds better to me. Unfortunately they chose the wrong name
Edgelord79
Gold Member
Fascination with these sales topics are fascinating.
Edgelord79
Gold Member
Our company is Australian based and they use strange terms just like you are describing.Eh it could go either way really.
Sometimes companies just choose weird terms to "socialize" internally that differ from something like general accounting practice terms, but mean the same thing.
"Let's not call it Profit, let's call it Accountability because every group is held accountable" or some shit.
OR yeah maybe it's some fuzzy math shit. Who knows?
Based on other emails that leaked Spencer and team discuss this like it's the same as beating Sony's profit margins.
edit: It could be something like this:
Contribution Margin: Definition, Overview, and How To Calculate
Contribution margin is a cost-accounting calculation that measures the profitability of a product or the revenue that is left after covering fixed costs.
jayj
Banned
It's pretty easy to make profit when you are selling 2013 technology in 2023 with 2017 prices.
BlackTron
Member
Yes I'm sure every company finds it easy to sell 2013 (uh, 2015) tech to the whole world
Badlucktroll
Member
H-I-M
Member
jayj
Banned
Why wouldn't they? It's cheap.
F0rneus
Tears in the rain
SenjutsuSage haunting us from the grave lol. Guy is literally militant for his favorite plastic box. It's a thing to be a fan of something. But being capable of accepting negative facts about their box thing, is now impossible for some. ITS THE BEST PLASTIC BOX!!!!!
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poppabk
Cheeks Spread for Digital Only Future
These weren't ever meant to be seen though.
Kilau
Gold Member
If you think of MS as another political party it really makes sense.
poppabk
Cheeks Spread for Digital Only Future
It's pretty much a rule at this point that if someone gets social media engagement because of a view on a divisive topic then their opinions on that topic will get more and more extreme over time.
ShaiKhulud1989
Gold Member
At this point I would love to see how Spencer does his taxes. Just for the laughs.
Topher
Identifies as young
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mejin
Member
BlackTron
Member
You're right, there really is no reason not to. Most companies don't/can't do it simply because they haven't thought of it yet
graywolf323
Member
yep like I said, the idiots are going to latch onto that graph despite it being misleading/inaccurate (at best)
"Please tell me that PlayStation is dying"
DeepEnigma
Gold Member
"Please tell me that PlayStation is dying"
A reminder. Xbox top exec's cozy up and seed these bullshitters.
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Klayzer
Member
Absolute attention hoes. Loud and frequently wrong. It's hard to pull for anything Xbox related, when you have complete tools like him spewing diarrhea in public constantly.
"Please tell me that PlayStation is dying"
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