Xbox’s Data Suggests They Might Have A Better Profit Margin Than PlayStation

gameranx.com:

Microsoft revealed how much they have been profiting for the FTC court case, and the results, well, they will probably surprise you.

As reported by Tweaktown, Microsoft shared what had usually been confidential data about the Xbox division’s sales and profit numbers. So let’s break it down one by one.

For the first nine months of FY2022, which runs from July 2022 to March 2023, Xbox had an accountability margin of $ 1.5 billion. Xbox shared a chart where they discussed their margins, in comparison to their competitors, PlayStation, and Nintendo.

If you’re wondering what an accountability margin is, there is actually a record of a conversation in the court where Phil Spencer explains Microsoft’s terms to an FTC lawyer:

“Phil: On the other side we have Sony with PS5 and a very analogous hardware subsidy. Sony’s gaming P&L runs at lower GM and AM percentage margins than our gaming business, even though they have 2 times the console installed base.

FTC: GM means gross margin, right?

Phil: Gross margin percentages.

FTC: And AM means accountability margin?

Phil: Accountability margin percentage, yes.

FTC: Is that like profit?

Phil: That’s the percent of your revenue that you keep in profit.”

Xbox also shared a table comparing the revenue and operating profit ratios between the three companies. You can see the table below.

Now, this information needs to be understood in terms of what we don’t know as much as what we do know. Mainly, we don’t know how Sony and Nintendo does their accounting, so it may not be possible to make this much of a 1 is to 1 comparison. We may assume that Microsoft made these estimates of their competitors, or perhaps hired an external company to make those comparisons.

But looking at the charts make