This is not to add fuel to the fanboy flame war which I find childish and boring.  So children go outside and play so grownups can talk.. Obviously I, like everyone else, bought the console that appealed to me. I'm not married to it, Nintendo doesn't send me a check, or even a Christmas card. I just prefer motion control, but so what. You like what you like for your own reason.

But here is some interesting food for thought about what a mismatch of companies we are dealing with..

Sony is cutting 8,000 jobs out of 160,000 because they are losing money and are out of cash.

According to Fortune Magazine that 8,000 is twice Nintendo's total payroll. The company's 3,400 employees generated $8.26 billion in revenue in 2007, or $2.5 million each.

While exchange rates and fiscal calendars complicate comparisons to U.S. companies, let's do it anyway. Over roughly the same time frame, Microsoft employees generated $624,000 each.

That's lean and mean competition.

But Sony is so much bigger , right?  Maybe.

In March, 2007 Phil Harrison was boasting "Sony Computer Entertainment Studios employs some 2,200 developers across 14 different studios... it has more programmers, artists, audio technicians and designers than Microsoft and Nintendo combined."
Ubisoft, with a ‘technical workforce' of 2,400 sits in second place, while Electronic Arts with 5,500 comes in first.

That's big alright.

But just 6 months later Forbes announced the Nintendo's market capitalization had just passed Sony at $52.9 Billion US. At the time it flip-flopped the same day but it was the tip of the iceberg.

By October, 2007 it was a done deal. Reuters  announced: Nintendo zipped past 10 trillion yen ($85 billion) in market value on blistering demand for its red-hot game machines, having almost tripled in value since launching the Wii a fivefold increase in the past two years. Nintendo's market capitalisation is almost double that of Sony, whose total revenue is more than eight times as big as Nintendo's.

Nintendo is now Japan's third-most valuable listed company behind automaker Toyota Motor Corp and Mitsubishi UFJ Financial Group Japan's largest bank, and analysts see the game machine maker's shares setting more high scores.

As of Dec 31the three companies stacked up like this in total capitalization:

Microsoft  (the whole company) = $ 172 Billion US
Sony (The whole company) = $22 Billion US (less than half  its value in June, 2007)
Nintendo = $54 Billion US (even after the major hit stocks took, higher than June 2007)

Now looking at Ninetendo's latest financial report they are also sitting on uncommitted CASH Reserves of $18 Billion US and that amount has undoubtedly increased substantially since then.

So the take home message is that tiny Nintendo, once a company that made playing cards, could actually buy all of Sony, every single share for CASH - not borrowing one red dime. There's a creative solution to the console wars. They would be unlikely to have any desire to do so, but if anyone thinks they are going to beat Nintendo now by outspending them, or out research and developing them, or thinks they can back them down in a price war better have somewhere upwind of $25 Billion US play money. Microsoft might have that much but I'm not betting on it and also, video games are a sideline. Games is all Nintendo does.

Talk about the 500 lb gorilla. 

They have definitely done well for themselves.

Great Post.  In the real world these are the numbers that matter to these companies.  A lot of people forget that the only game these companies really are playing is how to get your money.  Right now, Nintendo is killing everybody, regardless of what your favorite console is.

Use your brain and see that Nintendo has found a whole new demographic. And it's larger then anyone expected.

Thank you for supporting my signature.

Damn... Nintendo basically has almost $20 billion dollars just sitting around doing nothing. Nintendo's future is secure. As long as Nintendo is profitable whether they failed or not in the video game business, they aren't going anywhere. They didn't even spend any of that and don't need to either and is outselling the competition as well.

Imagine if Nintendo used that $20 billion to buy talent or for R&D for new ways to play games?

These are huge numbers for ninty, but they will give most of this money back to their shareholders.

Yes its quite obvious Nintendo's revenues, profits, and market share growth over the last 4 years is quite impressive. If someone had invested 10,000 dollars in shares in Nintendo back in 2004 they'd be quite the rich man right now.

However, I don't think outspending people is the way they are going to go about this new found cash load. This is what they could do but its also what could have been done by MS and Sony. MS did do it actually by taking on such heavy losses yet they still been unable to establish themselves as a market leader. Sony tried that with the PS3 and took the losses and it backfired on them.

What I expect Nintendo to do with this "new" found money per se is to buy a few more studios to wrap under their belt like they did with Monolith soft. Obviously with their expanding userbases they will want to release more games so they'll want to expand their internal and external development bases. Thus I could see them buying out companies like Factor 5 in the near future. Other companies could come from buying companies from struggling developers like Midway and EA who's been taking losses recently.

Thus with this they'll be able to have more projects under development which will bring in more money and keep a consistent flow of gaming. I also expect them to use this to work more on the home front with possible partnerships with some big Japanese developers. They already used it once with Tecmo and possibly bought the Fatal Frame IP. Personally I thought they were going to buy out Tecmo but the merger with KOEI stopped that. But they could possibly make deals with such companies as Sega, Capcom, Namco, and Square Enix to further increased development for their platforms. This may already be happening considering the recent announcement of DQX to the Wii and awhile back MH3 to the Wii. I'm sure Ninty has had a little to do with this by making deals with them that if they put it on their console they'll help marketing. Same thing they did with Fatal Frame IV. A lot more respectable than simply paying them off if you ask me.

Finally I expect them to invest more in the online spectrum of their consoles. Already seeing this with DSiware and more channels for the Wii.


So they are going to throw their money weight around but most of it is going to be involved with gaming development and increasing internal/external developing. Not so much on paying companies off, expensive research, and selling consoles for losses at competitive prices. I don't think Ninty wants to make a similar mistake that Sony and MS did.  Don't get me wrong a lot with be spent in the R&D department but nothing insane like that of Sony and MS recently.

They almost certainly will do exactly that, but very frugally and conservative. Simple and reliable is their mantra. They won't throw it around just because they have it. They may be the third richest company in Japan but they have no corporate jet. Only Iwata is even allowed to travel first class and he has been know to go to Europe and return the same day to save the cost of a hotel.

But every cent they have ever made has been plowed right back into new products. They have the money and Iwata has promised that the next won't be just a HD Wii. I'm looking forward to what they come up with.

In any case, it is the one company that will give it back to gamers in some form or other. They won't piss it away on some peripheral agenda. Gaming is thier only product and has been since playing cards.

Unless I am very mistaken, the cash is left AFTER all dividends have been paid out.