Tarumon said:
What Nintendo does, or actually doesn't do, is once they've made their US Dollars or Euros, wire any of it back. So none of the fluctuations in currency has any real impact until the day Nintendo repatriots that huge cadh reserve. Nintendo's policy is simply, no thanks, we wont pay commercial banks the transaction fees to convert any of that back to Yen (where the country is ..deflationary and some banks charge you to deposit with them). The huge reserves are themselves the perfect hedge, so they don't need to pay for expensive forward contracts or options for hedging. Also, their money is parked in higher yielding accounts. See how that works? Conservative and solid, just like their core marketing strategy of selling to the greatest common denominator using the most optimally priced technology. Now that the Yen is weakening precipitously, the same hit Nintendo absorbed will turn around and help them book upwards of $100 million a year in traslation gains. Nintendo holds a unique long term view to how they manage their currency, they make stuff that either sells at a profit or very darn near will with just an extra game sold. With 3DS kickng in Real profits, Wii And DS found money profits, Wii U already exceeding Reggie's one software and we are profitable proclamation, AND the reversal of those paper losses? I seriously need help embedding that 3DS prints money thingy here. |
Sometimes I wish all forums had a "rep" system. Well done in explaining in part why some people run a business and some do not.