Renar on 09 December 2007
| FishyJoe said: Another factor to consider is risk. Nintendo is relatively small, so the downside risk is small as well. With only 3500 employees, they won't go into debt if the economy takes a big turn. Sony is huge and is saddled with many expenses. Should the economy turn, Sony could lose huge sums of money very quickly. |
It depends on how you interpete 'size'. If by size you only mean number of employees, then the risk is greater. Less cost to reduce via layoffs, less diversification in products. Sony is a prime example of this. They are surviving because they can do layoffs, if needed, and can rely on other product lines besides the video game division that currently is not profitable.
Now if by 'size' you are factoring in revenues and profit per employee, then yes, smaller is better to maximize those ratios.
Still, smaller by definition is riskier. Note which net stocks / companies survived the 2000-2002 crash in the stock market. It was the larger googles, etc, not the startups of 10 employees and an idea.
Torturing the numbers. Hear them scream.
