PS3 sales surpassed 360's

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Re: PS3 sales surpassed 360's

Unread postby plunged » Mon Apr 11, 2011 9:41 am

James wrote:Yeah, I'm sure it isn't. Unfortunately that's par for the course when it comes to analysts. It could be sampling from a specific platform, game, etc. But it should also be noted that sales numbers are deceiving as well. A great example here is the phenomenal failure rate of the XBox 360, especially through its earliest years. Each replacement unit is a 'sale'.

All we can do is draw general conclusions, but fortunately that's not too hard to do.

I've always wondered how many 360's were 'sold' due to the high failure rate. Back then websites such as Gamespot and IGN reported that 360 had a failure rate of over 40% (close to 50% even). They already sold millions back then, so a 40% failure rate should've caused millions of 'sales'.
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Re: PS3 sales surpassed 360's

Unread postby James » Mon Apr 11, 2011 3:21 pm

Separation Anxiety wrote:They wont count a replacement as a sale because they lose so much money on it. Any investor that sees the sales number and the sales $$$ and sees that its not profiting due to the replacement "sale" would deuce in his trousers because they would be losing money with each sale instead of making a minor profit.

This is not usually correct. It is exactly what many different companies have done in situations like this. Generally speaking, they'll spin numbers in any way which reflects in a positive light (Microsoft pulled this stunt too, early in the 360's lifespan). The value associated with the sales number us usually regarded with much more interest than the value of a unit's profitability, especially in the case of these consoles early lives and when handled by a company like Microsoft which is quite comfortable running a product at a loss while they establish themselves in a market. On that note, there's a reason why the to-date profitability of Microsoft's gaming division has been rather embarrassing compared to their other divisions and the industry. I'm not certain of all the reasons involved, but I'm pretty sure the high failure rate of the XBox 360 is one of them. The unit's profit is profit, but they might as well make sure it looks like most of the units distributed are in actual use by customers.

It should also be noted that this isn't a Microsoft thing. Most companies do this stuff.
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