dunno where you're getting they lost money on hardware
Sony mentioned multiple times in their fiscal reports or related Q&As, more recently Totoki when he explained why needed to improve their profitability and why they didn't have more profits this previous FY.
At some point they were able to sell it at a profit, but during the pandemic they didn't only had component shortages: the price of the components has been highly growing since then. And even they didn't mention it, in recent years shipments by plane or ship also got way more expensive due to inflation, fuel costs rising and issues in certain spots of the world.
So they were were selling it at loss, big enough to make them increase the price of the console when in previous generations they made a price cut instead. Ryan explained it back then.
Since then did some efforts to try to reduce hardware related costs, but the prices of components and shipments kept rising.
Nintendo built their hardware to profit basically from Day 1, so there you go.
Yes, but they can do it because Nintendo makes low-end hardware and Sony makes high-end hardware instead because unlike Nintendo they focus on games with high-end visuals.
High-end hardware is way more expensive than low-end hardware. So they must sell it at a higher price unless they want to lose a too high amount of money per unit.
Also Sony have sold way more peripherals in that span of time than Nintendo has; those peripheral sales would make up for any losses on PS5 consoles themselves.
Yes, Sony is breaking records for any platform history in many areas, one of them being accesories.
But Sony only highlights the profitability or loses of some specific point like hardware or accesories when it significantly affects their operative income in a meaningful way, specially if isn't something usual. Case of mentioning loses from hardware due to component costs rising or discounts, or highlighting that PC ports are specially profitable.
But regarding profitability hard numbers being reported every quarter of fiscal year, they only report profitability for the whole Sony or the entire G&NS/SIE division. They never shared specific operative income/profitability numbers coming from hardware, accesories, sorfware, subs etc.
So we don't know how profitable are accesories, in general or specific for PSVR2 or PS Portal.
For the Bungie acquisition costs suppressing profit margins...again it's not like Nintendo hasn't made some acquisitions themselves, albeit much cheaper than Bungie. They've also hired ~ 400 people since a few years ago, which would cut into their own profit margins.
Sony says "acquisitions made in recent years", in plural.
And Nintendo didn't made acquisitions anywhere near similar in volume or price to what Sony got in the last 5 years: Insomniac+Housemarque+Bungie+Bluepoint+Nixxes +Haven+Firewalk+Firesprite +Savage+EVO+Valkyrie+Audiokinetic+iSize+Audeze+whatever else I forget.
And didn't only acquire them, they highly grew the headcount of these and previously existing teams. As an example, Bungie had 800+ people when they announced the acquisition and now are 1500/1600+.
You are vastly overselling the market for PC handhelds; even combined they will not come to pushing even half the numbers Switch 2 will do in its lifetime, let alone on a per-brand basis.
I only said it's a growing market. A market where we almost have confirmed that more players like MS will join. And -my speculation- it's pretty likely that Sony will end joining for the PS Player next gen successor and to compete directly against Nintendo.
You're being delusional at this point if you think SIE are going to have higher profit margins than Nintendo once the Switch 2 goes into swing.
What I said is partly based on words from people like Ryan or Totoki explaining how they planned to improve their profitability in long term, and also Nintendo higher ups showing concern because of the rising costs of games not being proportional to the rise in revenue (so affecting profitability).
And if Switch 2 gets more powerful its costs will be more expensive for players unless they reduce the per unit profitability. And if their price increases will be more similar to the PC ones so will compete more directly but having way less 3rd party support, emulators, etc.
And that's the rub here; if SIE DO have consistently higher profits than Nintendo going forward, it'll be at needing at least 2x (likely closer to 2.5x) the revenue figures of Nintendo to accomplish that.
Sony is in a multi-year growing revenue trend on their hardware, software, game subs, accesories, non-gaming adaptations of their IPs, off-PS gaming revenue. And has multiple projects/investments/initiatives in all fronts to keep them growing in the next years.
SIE's revenue will also considerably grow, not only their profits.
I personally think Switch 2 pretty likely will have record hardware numbers in the launch window, but beyond that will be less successful than Switch 1 in hardware sales, software sales and their profitability in general.
Which means, SIE will be spending far more along the way in all areas. At some point of course they are going to have higher net profits because, at some point, you're just "brute forcing" your way to accomplish that spending way more money.
Yes, until now Sony generated way more revenue than Nintendo but had less profit because reinvested most of that money on very expensive games with a relatively low profit margin and acquisitions and growing their teams.
But in recent times has been investing in things that will have a bigger profit margin as are GaaS, PC ports, mobile games, movie/tv show adaptations plus at least during some time won't continue growing a lot via hirings and acquisitions.
Sony could decide to keep reinvesting it (and we know that in around a year and a half or a year later they'll acquire again), but we know Totoki wants to increase the profits not only to secure themselves from the risk of $300M tanking, but also because of different reasons as could be uncertainity of the global economy and geopolitical issues, huge inflation, currency exchange, or maybe also because of concerns related to the global total industry gaming revenue basically remained flat during the last couple of years causing investors to move away -hurting publishers and devs, so reducing their output which also means SIE's main revenue of the related 30%- from gaming because that may indicate that the gaming market peaked -I think it didn't- after 5 decades of growth).
