PS3 more Profitable for EA than 360 in Latest Fiscal Quarter. Wait, what?

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Ecofreak

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According to MCVUK.com (a gaming industry website), they reported that the PS3 actually raking in more profit than the 360.

[quote name='MCVUK.com']Both PC and PS3 prove more profitable platforms than Xbox for EA in quarter ending June 30th

Whilst it was the Wii, thanks to the success of EA Sports Active, that really shone for EA in its latest fiscal quarter, just as big a surprise is the fact that the publisher’s PS3 returns far outstripped those coming from Microsoft’s Xbox 360.

Wii revenues lead the charge at $161m, up from $109m in the same quarter last year. Next up was PC, which courtesy of The Sims 3, bought in a considerable $124m.

Next in line was PS3 with total revenues of $121m, markedly higher than Xbox 360, which generated $73m for EA. The PSP was also a surprise victor over DS with revenues of $38m compared to DS’ $28m.

North America remained EA’s most lucrative territory, producing $343m of revenues. In comparison, Europe generated $258m with Asia at $43m.[/quote]

I know that there had been other publishers that made more money from the PS3 offerings than the 360 last year but I really don't understand how this is possible especially when the 360's worldwide install base is larger than the PS3 and typically sell more copies of the same title (fighting games withstanding).

And for those who say, "Well, EA just produces crap games and PS3 owners eat up whatever they can get" forget that it was EA who released Mirror's Edge and Dead Space. So there are quality titles there and not the usual shove-ware from the EA of yester-years.

According to a forum post in this article (reader beware)

If you look at the non-GAAP revenue (which better illustartes what actually sold at retail) from EA's own financial report, then the numbers are a little different:
PC 31%
Wii 23%
360 17%
PS3 12%
Click to expand...

Can anyone explain this? Is it because Sony chargers lower royalty fees? Is the attachment rate on the PS3 higher than that of the 360, thereby having a smaller residual inventory on the PS3 than 360?
 
You do know that EA lost a quarter of a billion dollars last quarter, right? Looking at just revenues doesnt tell you much. I also believe its the case that 360 revenues are deferred 6 months before being reported, wheareas PS3 profits are recorded immediately.

Bringing in record sales/revenues while spiraling the drain is the story of this generation's western development/publishing, unless you have the fortune of owning Blizzard.
 
PS3 is not and has never been more profitable for the industry as a whole outside of non-recurring or variable adjustments. If you see it in a specific financial report it is because of one of three reasons (listed in order of likelihood):

1) Currency conversion rates are favorable for EU/JPN sales
2) A single title skews heavier vs. PS3 than normal and is a large percentage of that company's sales for the time period
3) The company is not allocating their costs properly by platform
 
[quote name='Dr Mario Kart']You do know that EA lost a quarter of a billion dollars last quarter, right? Looking at just revenues doesnt tell you much. I also believe its the case that 360 revenues are deferred 6 months before being reported, wheareas PS3 profits are recorded immediately.

Bringing in record sales/revenues while spiraling the drain is the story of this generation's western development/publishing, unless you have the fortune of owning Blizzard.[/QUOTE]

I don't understand why the revenue reports would be different for two platforms within the same company. I can understand the difficulty of comparing Sony and Microsoft's reports in that case, but why would EA do that? They should understand immediately what revenues they pull in based on their own sales figures from interactions directly with their store customers.

And the discussion isn't about the overall health of a gaming company, but rather where they are making the most money. PC and Wii making the most money for EA makes sense Sims 3 and Active Fitness respectively. But I still don't see why the PS3 would earn EA $50 million more in revenue than the 360. It's true that profit is the figure we should be most concerned about but I still think this discussion is of interest.

[quote name='jkanownik']PS3 is not and has never been more profitable for the industry as a whole outside of non-recurring or variable adjustments. If you see it in a specific financial report it is because of one of three reasons (listed in order of likelihood):

1) Currency conversion rates are favorable for EU/JPN sales
2) A single title skews heavier vs. PS3 than normal and is a large percentage of that company's sales for the time period
3) The company is not allocating their costs properly by platform[/QUOTE]

1 and 2) EA doesn't sell many games in Japan so that market isn't really a factor. The PS3 and 360 are practically in parity in Europe (save for England but only slightly). So the two should sell roughly the same amount of copies for the same title (save for perhaps Fifa, where I believe the PS3 has a slight advantage). Doesn't seem like enough to account for a $50 million revenue difference. Games cost the same for both systems, released at the same time, etc. Neither system has an advantage over the other.
3) If this were the case, then EA is investing too much money into the 360 and not getting a good enough return on investment. Or they're investing more shrewdly in the PS3 and getting a higher rate of return. Neither of which make sense because marketing any title covers both the 360 and PS3 equally. EA doesn't play favorites for either system nor they do exclusive titles -- all they want is money (save for Mass Effect, but that doesn't come out till later).

So I guess what's really baking my noodle is, if the 360 sells more copies than the PS3 across the board for the most part, why does it bring in $50 million less in revenue? If the figure was for profits and Microsoft charged more/Sony charged less, then I'd understand. But my grasp of economic principals doesn't seem to apply to this situation.
 
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