| steven787 said: Thrid bold: Nintendo is already a bigger company than Sony.
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Making more money and being worth more on the stock market are not the only ways to measure a companies size. They are in fact rather flawed methods for determining it's size.
They are fine methods to determine how much money a company can spend or raise, but that is not the same as 'how big is the company'.
As a fitting example: Nintendo makes vastly more money than GM does. However, GM has over ten times the revenue, about a hundred times as many employees and enough assets to be able to take a 38 billion dollar loss and still be here.
Clearly Nintendo's shareholders are much happier, yet just as clearly GM dwarfs Nintendo in size. It's just not very sucessful at this time.
The very same thing is going on with the Nintendo/Sony comparisons. Sony is a much bigger company than Nintendo. It's not as succesful, but it has huge assets compared to Nintendo, as well as a huge revenue base.
To put things into perspective:
At the end of the day for every dollar spent on Nintendo products worldwide, about eight get spent on Sony products.
For every employee Nintendo has, Sony has forty seven.
For every dollar worth of assets (incl. buildings, the Wii, etc) Nintendo has, Sony has sixty five.
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Or in short: the value of a company on the stock exchange is not required to be an accurate depiction of the actual value or size of the company in question. In case of Nintendo one could argue that the company is overvalued - it's market cap is sixty to eighty times the value the company is worth in it's books. In case of Sony the opposite can be argued - it's market cap is only about a third of what the company is worth in it's books.
And it's super easy to explain why this is so: invest in Nintendo and you're investing in a rising star, a company that almost guarantees a high return on investment. Invest in Sony and things are much more muddled, the company is not doing so hot so your investment might not give a positive return at all.
Those things are far more important for a companies market cap than the facts which sum up just how much the company is worth (i.e. it's assets).
