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The story
On 5ch’s Hardware/Industry (Geha) board, a thread sprang up over why SIE’s (Sony Interactive Entertainment) earnings look so much stronger than Nintendo’s. It started with the observation that the two companies record revenue from third-party download software differently: SIE books the full sale price as revenue (gross), while Nintendo, acting as a distributor, books only its cut (net). Throw in subscription fees and in-game purchase (gacha) revenue, and posters argued this creates a big gap in how the headline sales figures look. Plenty of others pushed back, arguing that the accounting method doesn’t change the bottom-line profit, so opinion in the thread split over whether sales or profit is the fair way to compare the two companies.
What people said
April–September 2026 Sales
Nintendo
Here we go with the 'accounting standards' thing again?
You're saying Sony's sales are really lower once you adjust for accounting differences, but Sony's profit is already way bigger than Nintendo's — so if its sales are actually lower, that just means its profit margin is even higher than we thought.
What reason would there even be to exclude it?
Nintendo should get in on subscriptions too.
Unlike the other camps, Nintendo has clear reasons and real advantages for sticking with packaged software.
Subscriptions are ultimately just a rip-off business model, so there's no guarantee they'll keep working forever.
As far as being a gamble goes, it's no different.
So even accounting for those standard differences, the roughly 1.4-2x gap in the two companies' core game sales doesn't change much in broad terms.
that's what the AI says
Totally wrong.
"Trashstation" (a derisive nickname for PlayStation) depends on third parties for 90% of its software sales
and they're showing that 90% at the "price charged to the customer," which is why the headline number is inflated.
Only the sales number changes — the profit doesn't 🥺
That's the IFRS-vs-Japanese-standard difference talking.
What actually differs between SIE and Nintendo is how they book revenue from third-party download titles: SIE uses gross (total) accounting, Nintendo uses net accounting.
For DLC the platform's cut is around 30%, and for gacha the fee is only around 10-something percent, so it wouldn't be strange at all for the reported sales figure to shrink to 1/9 depending on the accounting method.
> Content sales use a wholesale model unlike anything seen on other platforms. In other words, the platform holder doesn't earn its cut from a sale the developer makes directly to the user — instead, SCE buys the content from the developer at a wholesale price, and the user then buys it at a retail price higher than that wholesale price.
So Sony's contract structure is: buy from third parties, then sell it themselves. Under that setup Sony is the seller of record, so it has to book revenue gross (the full amount).
Nintendo uses a distributor/agency model, so it has to book revenue net. Neither company is doing anything wrong here — anyone directly comparing these two companies' raw sales numbers is a fool.
Wholesale, huh — like Shoshinkai (a Japanese toy/media wholesalers' association)?
Subscriptions are an in-house service, so both Sony and Nintendo book those gross the same way.
Profit is profit.
Whether or not they include the non-royalty portion of software revenue in sales doesn't matter at all.
Exactly. SIE and Nintendo are selling things (hardware and software) at basically the same prices, so if SIE's profit is double, however you slice it, SIE is just moving way more software.
This one's dumb too.
Nintendo's "in-house software sales ratio" is comparing gross-booked in-house titles against net-booked third-party titles, so of course the in-house number is going to blow everything else away.
We're talking about the fact that that in-house software revenue is tiny to begin with.
Are they seriously doing that?
Makes no sense. Not reporting revenue that actually exists would be the real problem lol
What you're saying makes zero sense.
Nintendo runs mobile games and earns gacha money too, so why are they getting crushed this badly then?
Third-party software must be selling like never before then —
except you never hear a word about that happening.
Here you go. You're just only looking at Japan.
PS5 titles swept the top 5 best-selling console software in France for 2025
https://imgur.com/a/bGrP0sL
#1 EA Sports FC26 (PS5) — 960,000 units
#2 EA Sports FC25 (PS5) — 360,000 units
#3 BF6 (PS5) — 310,000 units
#4 Assassin's Creed Shadows (PS5) — 310,000 units
#5 CoD: Black Ops 7 (PS5) — 280,000 units
Source: S.E.L.L.
https://www.sell.fr/sites/default/files/essentiel-jeu-video/ejv_avril_2026_def-en.pdf
Sony's first-party sales ratio is roughly around 10%.
Meaning the remaining roughly 90% of digital sales are booked gross.
This is a pain, so let's just compare profit — with profit it doesn't matter whether something's booked gross or net.
Besides, back when Nintendo was winning, people were comparing profit too.
Background and Key Points of This Debate
At the heart of this debate is a difference in how each company records sales in its earnings — its “revenue recognition method.” Sony (SIE) uses a “wholesale model,” buying third-party software outright and then reselling it itself, so it books the full sale price as revenue (gross). Nintendo, by contrast, operates under a distributor-style contract, booking only its cut — the royalty — as revenue (net). That difference alone can swing how large each company’s reported sales look, and posters repeatedly pointed out that comparing the two on sales figures alone is meaningless. At the same time, many argued the recognition method shouldn’t affect the bottom-line profit either way, so the thread never settled on which metric — sales or profit — is the fair basis for comparison. The debate was further muddied by a side argument over how far subscription membership fees and in-game purchase (gacha) revenue should count as “sales.” Posters also tended to conflate two separate issues: differences in accounting standards (like IFRS), which concern the scope of revenue recognition, and the separate question of gross vs. net booking method.
*This article is excerpted and summarized from the 5ch (Hardware/Industry (Geha)) thread “[Sad News] The Reason SIE’s Earnings Only *Look* Strong Has Finally Been Revealed lolololololololol.”
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