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PSN still makes more money than the entirety of Nintendo Co., Ltd.

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DonFerrari said:
maxleresistant said:
I'm still wondering if the switch really is increasing Nintendo's userbase and sales or is it just replacing the 3DS?

Both, but the proportion is anyone guess.

I think an educated guess based on the launch numbers of the WiiU and 3DS could help.

But yeah it will be easier to compare after we get to the end of the first year for the Switch.

 



DonFerrari said:
Nautilus said:
What people dont realize is that when you invest in Sony, you dont just invest in its gaming division, you invest in the whole company, and not every division is fairing as well as the PS4.
But when you invest in Nintendo, you invest in the gaming division, which is doing extremely well to say the least, with a bright future ahead of it.Thats why Nintendo is doing better in the stocks.

But both companies are doing well.No need for these salty comments or denial by both sides.God.

You mean Sony having all their departments making profit in the quarter and "only" increasing 13% the stocks?

My sole point is that trying to use stock market evaluation for anything here is mostly useless.

Sony has a lot of bad apples among its operating units, with most of them losing money for years or fluctuating over the years. Even then, Sony has a lot of competition in those industries and isn't a top competitor in them. Even when you look at the consistently profitable segments, like music, they don't make enough. The only segment that is doing as well as games is insurance, which is a separate subsidiary. At the same time, there is more risk for Sony. They have weaker liquidity and more debt. 

Nintendo, on the other hand, has a lot of potentials. They have a large portfolio of IPs that can be leveraged into other products and mobile games. They have the legacy systems and of course the hardware/software business. The company has little debt, pays a constant dividend and is flushed with cash, giving them plenty of opportunities for M&A activities. Nintendo has a better outlook for growth with levering their IPs, the Switch selling well, and expanding into other markets. 

As for the income, keep in mind Sony has a larger install base. This means more revenue from PSPlus and licensing fees from software developers. This will change as the Switch install base grows and the online service kicks in.



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Cerebralbore101 said:
Lawlight said:

That's not how a company's worth is determined. Amazon and Netflix are highly indebted companies and we all know they're a lot.

As for your PS, you're company 1 quarter of the PS division's OI to Nintendo's 2 quarters in this FY.

I had a financials course in college, and that is indeed how a company's worth is determined. Total Assets - Total Liabilities = Company value. 

I'll have to look over the OP's documents later. I'll edit my post to accurately reflect the real difference between the two gaming divisions. 

Edit: Yeah, I see what you mean. That widens the gap between Sony's Gaming Division and Nintendo to 33 billion yen. 

What?! That's not how companies get valuated. Maybe internally, but to critics (like Forbes who make those lists) and investors, it's easy to see that it's not the case.



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outlawauron said:

What?! That's not how companies get valuated. Maybe internally, but to critics (like Forbes who make those lists) and investors, it's easy to see that it's not the case.

To an accountant that's exactly how they would value companies, through "total equity" ... 

With investors and stocks, it's totally based on speculation ... 

I quite like using total equity as a measure of worth since it's more grounded but even that's still subject to speculation ... 

There is only value in something if people believe it to have value such as money even though it's just printed paper ... 



outlawauron said:
Cerebralbore101 said:

I had a financials course in college, and that is indeed how a company's worth is determined. Total Assets - Total Liabilities = Company value. 

I'll have to look over the OP's documents later. I'll edit my post to accurately reflect the real difference between the two gaming divisions. 

Edit: Yeah, I see what you mean. That widens the gap between Sony's Gaming Division and Nintendo to 33 billion yen. 

What?! That's not how companies get valuated. Maybe internally, but to critics (like Forbes who make those lists) and investors, it's easy to see that it's not the case.

What he described is book value per share. Its a good measure since it, in essence, the amount the company is worth if you liquidated all its assets. If you are looking at a stock, it may not be bad to know since you can tell if the market is vastly overvaluing or undervaluing. 

There are two reasons that the book value and the market value are different. First, per GAAP, assets are measured at historical cost, with some exceptions. This means if you have, say, a building that you've owned for 30 years and has appreciated in value, it would still be recorded at price you bought it. The other is that there are some nontangibles the company may have that can't be booked. For instance, a company could have an amazing brand that makes it more valuable than what the financial statements are showing. In the stock market, future potential plays a lot into the price as well. 



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VideoGameAccountant said:
DonFerrari said:

You mean Sony having all their departments making profit in the quarter and "only" increasing 13% the stocks?

My sole point is that trying to use stock market evaluation for anything here is mostly useless.

Sony has a lot of bad apples among its operating units, with most of them losing money for years or fluctuating over the years. Even then, Sony has a lot of competition in those industries and isn't a top competitor in them. Even when you look at the consistently profitable segments, like music, they don't make enough. The only segment that is doing as well as games is insurance, which is a separate subsidiary. At the same time, there is more risk for Sony. They have weaker liquidity and more debt. 

Nintendo, on the other hand, has a lot of potentials. They have a large portfolio of IPs that can be leveraged into other products and mobile games. They have the legacy systems and of course the hardware/software business. The company has little debt, pays a constant dividend and is flushed with cash, giving them plenty of opportunities for M&A activities. Nintendo has a better outlook for growth with levering their IPs, the Switch selling well, and expanding into other markets. 

As for the income, keep in mind Sony has a larger install base. This means more revenue from PSPlus and licensing fees from software developers. This will change as the Switch install base grows and the online service kicks in.

Their semiconductor business seems pretty solid too. "Sony's semiconductor business saw profit of 49.4 billion yen in the quarter, up from a 4.2 billion yen loss in same period a year before. The loss was due to an earthquake which hit production.



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COKTOE said:
VideoGameAccountant said:

Sony has a lot of bad apples among its operating units, with most of them losing money for years or fluctuating over the years. Even then, Sony has a lot of competition in those industries and isn't a top competitor in them. Even when you look at the consistently profitable segments, like music, they don't make enough. The only segment that is doing as well as games is insurance, which is a separate subsidiary. At the same time, there is more risk for Sony. They have weaker liquidity and more debt. 

Nintendo, on the other hand, has a lot of potentials. They have a large portfolio of IPs that can be leveraged into other products and mobile games. They have the legacy systems and of course the hardware/software business. The company has little debt, pays a constant dividend and is flushed with cash, giving them plenty of opportunities for M&A activities. Nintendo has a better outlook for growth with levering their IPs, the Switch selling well, and expanding into other markets. 

As for the income, keep in mind Sony has a larger install base. This means more revenue from PSPlus and licensing fees from software developers. This will change as the Switch install base grows and the online service kicks in.

Their semiconductor business seems pretty solid too. "Sony's semiconductor business saw profit of 49.4 billion yen in the quarter, up from a 4.2 billion yen loss in same period a year before. The loss was due to an earthquake which hit production.

Let me clarify. Gaming is racking in a lot of money compared to many of Sony's other businesses. Semiconductors is a lot like Music in that is does OK, but doesn't make a ton of money. In terms of place in the market, I wouldn't know. Maybe they are top of their class there.



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maxleresistant said:
DonFerrari said:

Both, but the proportion is anyone guess.

I think an educated guess based on the launch numbers of the WiiU and 3DS could help.

But yeah it will be easier to compare after we get to the end of the first year for the Switch.

Well sure we can suppose when talking about migration there is more 3DS owners than WiiU owners buying Switch... but I also believe they are bringing a healthy quantity of new customers.

VideoGameAccountant said:
DonFerrari said:

You mean Sony having all their departments making profit in the quarter and "only" increasing 13% the stocks?

My sole point is that trying to use stock market evaluation for anything here is mostly useless.

Sony has a lot of bad apples among its operating units, with most of them losing money for years or fluctuating over the years. Even then, Sony has a lot of competition in those industries and isn't a top competitor in them. Even when you look at the consistently profitable segments, like music, they don't make enough. The only segment that is doing as well as games is insurance, which is a separate subsidiary. At the same time, there is more risk for Sony. They have weaker liquidity and more debt. 

Nintendo, on the other hand, has a lot of potentials. They have a large portfolio of IPs that can be leveraged into other products and mobile games. They have the legacy systems and of course the hardware/software business. The company has little debt, pays a constant dividend and is flushed with cash, giving them plenty of opportunities for M&A activities. Nintendo has a better outlook for growth with levering their IPs, the Switch selling well, and expanding into other markets. 

As for the income, keep in mind Sony has a larger install base. This means more revenue from PSPlus and licensing fees from software developers. This will change as the Switch install base grows and the online service kicks in.

Yes you are totally right, and all that influences the evaluation of the company. But you also understood that a lot of the "value" is based on speculation and manipulation as well.

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