I found a statistic that said out of the big 3 Nintendo was earning the least money per annum.And after researching to confirm that it was real, I can’t understand.Nintendo has triple the amount of Switches sold compared to the PS5 and Xbox X.So how can they be in last place?Not to mention, almost all of their first-party games sell like hotcakes.
Source: Nintendo- [https://companiesmarketcap.com/nintendo/revenue/#:\~:text=According%20to%20Nintendo%20%27s%20latest%20financial%20reports%20the,generates%20by%20the%20sale%20of%20goods%20or%20services](https://companiesmarketcap.com/nintendo/revenue/#:~:text=According%20to%20Nintendo%20%27s%20latest%20financial%20reports%20the,generates%20by%20the%20sale%20of%20goods%20or%20services)
PlayStation-
[https://www.tweaktown.com/news/91280/playstation-delivers-record-26-9-billion-revenue-operating-profit-drops-40/index.html](https://www.tweaktown.com/news/91280/playstation-delivers-record-26-9-billion-revenue-operating-profit-drops-40/index.html)
Xbox-
[https://www.theverge.com/2022/7/26/23278933/microsoft-q4-2022-earnings-revenue-cloud-windows-xbox-gaming-surface](https://www.theverge.com/2022/7/26/23278933/microsoft-q4-2022-earnings-revenue-cloud-windows-xbox-gaming-surface)
by Theheavyfromtf3
16 Comments
Quote / link whatever statistic you’re referring to.
> nintendo has triple the amount of Switches sold.
Those lists don’t count hardware sales
Except they don’t pull best seller every years, and not every first party Nintendo games are best seller. M$ has gamepass, Sony got PS+, both of those things could earn more money than just selling games.
Because Sony and Microsoft are in other markets aside from gaming?
A couple things:
– Sony and Microsoft win out in third party sales by a lot, which is the vast majority of games. Nintendo likely wins with most indie games, but those typically have much smaller price tags and still sell a lot fewer copies than large third party games
– Sony and Microsoft have online subscription services that rake in a lot consistently
– PS5 games sell at $70, I forget about if Xbox Series X games do
– Sony and Microsoft both have a much higher percentage of their sales being digital, which are sales that don’t need to give a retailer a cut, so they make more per sale on the whole because more of the sales are digital, and it’s by a lot
Nintendo has a lot more emphasis on its first party games than Sony or Microsoft, so just comparing sales of first party games isn’t really telling even close to the full picture
Size and scope of the companies, honestly. You HAVE to remember that Sony and microsoft ISN’T JUST ABOUT GAMES. Microsoft has Windows, a bunch of cloud services, productivity tools and has a big hand in the server market. Sony is in a bunch of different fingers in different tech sectors too like televisions, phones, cameras, etc etc. Nintendo is only playing in one space. ALSO, honestly, the Switch is great but there are clearly limits inherent to it’s design. You’re just not going to get horse power out of the thing as long as it has a portable design with current battery tech. Plugging something into a wall and giving it more room to cool itself just gives you way more headroom. There’s also the aspect of PS5’s and Xbox Series devices doubling as entertainment consoles outside of games. Blu ray’s and streaming stuff. Switch doesn’t really boast any of that because it’s not going to display the best pictures for those things. Also, no disc drives.
Nintendo does have a lot going for them, it’s just that Microsoft and Sony are bigger fishes. That affords them certain market advantages Nintendo can only dream of.
Because owning a Nintendo console, a Sony console, and a Microsoft console are not mutually exclusive.
PlayStation and Xbox also happen to have more real money generators – that is, live service or gacha and MTX-heavy games. The Switch has a good amount already (Fortnite, OW2, Apex Legends, etc.), but high-revenue games those two consoles have that are not on Switch include:
• Call of Duty (especially Warzone)
• Madden NFL
• The Sims 4
• Destiny 2
• Genshin Impact and Honkai Star Rail (only on PS4/5)
• Roblox (only on Xbox until recently)
• Final Fantasy XIV (only on PS4/5, will get Xbox version soon)
Console manufacturers get a cut for every bit spent, and games like those that generate a lot of revenue for Sony and Microsoft are completely absent on Switch. There’s a lot of other reasons why the Switch generates less revenue, but the absence of those games may be one of the bigger ones
Revenue =/= profit
Not sure about Sony but Microsoft has game pass which is pretty big
This is an easy mistake to make. Revenue is money brought in regardless of profit. So if PlayStation sells 10 systems that’s $5000 brought in, or revenue. Nintendo at 10 systems would bring in $3000 in revenue. However if Sony takes a $20 loss on every system, they actually have -$200 profit from system sales, which they will try to make up in first party sales and third party royalties. At the same time, if Nintendo sells systems and *make* $20 on a system, they will profit $200.
So, that’s why Nintendo is so profitable. Now having said that, PlayStation and Xbox both have subscription passes that are big REVENUE earners, because they can bring in like $10-20 a month a user. However, even then, Gamepass may not be profitable yet because of licenses they have to pay out to third parties to use their games and acquisitions like Activision being $69billion.
I don’t know if Nintendo is more profitable than Sony or not for sure, but they are certainly more profitable than the Xbox arm of Microsoft right now. But Microsoft can afford to pump billions into Xbox, because Microsoft is massive.
Well Sony also sells other electronic devices like TVs, cameras and so on. Microsoft also sells the windows operating system and software like ms office and other professional software. Imagine the money they get from companies buying their licenses for Windows and Office alone…
They need to make better games and focus on their brand
Somehow or another when calculating revenue from the gaming sector, Google is actually the biggest earner which I have found perplexing since most of their most popular games are actually free, with in-game purchases.
It makes more sense when you realize that Google Ad Words is on every illegal ROM/emulator site, meaning Google knowingly splits revenue with pirates of all the retro games from Nintendo, Sony, Sega, Atari, etc.
Good lord. You’re comparing like 3 different kinds of data from like 3 different times. On a monthly basis, Nintendo mind sell more consoles, but generate less revenue that PlayStation because the ps5 costs way more. But the profit might be higher for Nintendo because they make more money per console sold than Sony.
But you’re like looking at Microsoft and Xbox data together and Sony data and there are a lot of reasons revenue can be higher for PlayStation than Nintendo despite Nintendo selling more systems and games. It’s not even worth comparing total revenue because there are so many factors that go into those numbers.
The revenue of Sony/MS includes the full price of third party games sold on their platforms, but they only get a a 30% cut from that. That’s why their revenue is higher (as Xbox, PC & PS have all the big budget third party games), but their profits are a lot lower than Nintendo’s.
Nintendo makes most of their money from first party games, where they get a 100% cut off, not 30%, hence the much higher profits.
Nintendo’s position is the best to be in, as they’re less reliant on third party games. They just need to make sure their first party is of high enough quality and sells a lot, which they don’t struggle with.