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On Tue, Feb 22, 2011 at 01:14:23PM -0000, Simon Waters wrote:
>
> I assume this is effectively before tax profit by area. Interesting, I saw
> some discussion of how big Entertainment and Devices Division has become
> in terms of revenue, guess it is less profitable. Wonder if that is
> because they take a hit on the hardware upfront? Presumably the games
> console vendors walk a fine line between not wanting to release a must
> have upgrade, and wanting to release a must have upgrade if they subsidize
> hardware.
>
>
Sort of before tax profit. Very Roughly
Revenue = Sales
Sales - Costs = Operating Profit
Operating Profit - Tax - Interest = Net Profit
I believe that there is a sort of dance between hardware and software:
- Write software for new hardware
- Sell hardware cheap and recover the costs on the games
- Persuade 3rd party developers to write software who will only do so
if the hardware is good and is going to be around for a bit
And because this is entertainment, you then also have to advertise
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