The truth about Nintendo

[Zod95]

Viper1 said:

Zod95 said:

Mnementh said:

You didn't bother to read my post exactly. Let's make it simple: For every dollar you pay for WiiU or WiiU-games, Nintendo invests more than one dollar (let's say 1.30$) into games or hardware. For every dollar you pay for PS4 or PS4-games, Sony invests less than 1 dollar (let's say 0.70$) into games or hardware. That is your exact argument, but applied to the current situation instead of history.

I did read your post carefully and I know what you mean. You are talking about the last quarter, in which Sony presented some profit. In my opinion, you shouldn't do such an analysis about "long-term intentions" based on the results from some months or even years. Look at generations (complete cycles that tell you what really happened) and look at the entire history (Nintendo has accumulated many billions from gamers). That already tells you where the money is going to.

For example, in the Game Cube era, Nintendo did more profits than Sony. That tells you that Sony, despite earning huge amounts of money with the PS2, they have also invested a lot back to the industry. The more they have, the more they invest. Nintendo hasn't. Actually, the only thing that raises with Nintendo's success is their profits.

Sure that now that Sony has a lot of debt, they need profitable quarters. But if they recover all they have lost and turn back to the same level of earnings as they had with the PS1 and PS2, I assure you will see them heavily spending again.

You really have no idea what a company does with profits, do you?

Say in Q1 a company generates $100 million in profit.   Then in Q2 it takes a $100 million loss.   Everything you've posted so far suggests that you think it means they reinvested that initial $100 million back into the company. 

No, 100M$ would be the marginal difference of their investments. Assuming said company had 2B$ revenue and 1.9B$ cost in Q1 and 1.5B$ revenue and 1.6B$ cost in Q2, it had actually 100M$ loss in Q2 but the investments on that quarter were 1.6B$, not only 0.1B$.

And of course that the 0.1B$ profit of the Q1 were subject to taxes and eventually income to shareholders, so they couldn't all be equalized to the 0.1B$ loss of the Q2.