Nintendo hes a higher chance of going bankrupt then Sony - Explaining why

[Dusk]

Dusk said:

ImmortalHelixFossil said:

I wrote this on a comment in an other thread. I am just honestly curious if people see some truth. If it's nonsense, please give me some feedback. :)

 

I am afraid Nintendo hes a higher chance to go bankrupt with it's current business model. Making own hardware (home/portable console) and selling their own exclusive IP's on it.

What I am trying to explain is, right now they are barrely earning anything on the WiiU hardware/software. There profits comes from the 3DS, and even tho they are selling great (not as great as the DS). They have way to much competition from the tablet and smartphone market. How much longer, can Nintendo relate on their own hardware/software sells?

Sony, is having a financial struggle for ages. Way, way longer then Ninteno. Still, right now Sony's future is looking way brighter for years. They, finally removed the two divisions that caused the most trouble last 6 years (TV & laptops). What's left are healthy divisions, that always made profit, or a minimum lost.

The huge adventage from Sony side is they aren't depended on the portable/console market (Game). They have so many other healthy divisions, that always made a profit. So, if they have so many healthy divisions why did they made so many lost over the years? Simple, the TV and laptop divisions made such a big lost in the years, that the numbers of the whole company always turned red. Everyone, always look at the numbers of the news article. The moment you dig in the whole reports, you will see it was always 2/3 divisions that made the huge lost. The other divisions always made a minimum lost or no lost at all.

Also the Playstation 3 generations, was a huge financial disaster. That was also one of Sony's life lessons, and won't ever happen again. How can I be so sure? The financial sh*t load the Playstation 3 caused the first years. Made Sony realize: "Never ever again". Right now, they are making a lot of profit on the Playstation 3/software. They will make a profit at the end of the Playstation 3 generation. If it was worth all the trouble, bad image and stock value lost? Definitly not, but it was a precious lesson Sony learned. 

Back to the whole topic: Sony is heading the right way, they finally found their way out of hell (took them years). They finally made the right decisions of closing the most risky/making lose divisions. The last risky division that remains is the game division, not for this generation. They got this generation in their pockets. But in general the whole console market is a huge investment with a minimum chance of making profit (since the introduction of tablets, smartphones and cheaper laptops/computers). Their other divisions were never a risk and always made sure Sony didn't go bankrupt (got my doubts at home entertainment/sound division)

Nintendo: It's a great company with a fantastic game history and probarbly the most famous IP's in the world. Still, Nintendo will go bankrupt for sure. Wait what? Only, if they won't change their business model. The old times are gone. The portable market is declining very fast. No, not because of the Playstation Vita, that one is selling poorly. The tablet and smartphone market. Why should parents, give their children an 3DS or the next portable console for their children, if they can get a tablet for the same price or even cheaper? The difference is, the games will be way way cheaper plus they (parents) can have also some fun with it. 

I know Nintendo's IP's will always, always make sure they will sell console's, but only for the true Mario, Pokemon, Zelda and so go on fans. Nintendo need to change their business model. They can't relate on their console hardware/software sale (at least not this generation).  They, should start thinking about bringing some IP's out as an 3th party developer. There are now way more ways to play games. There are getting so many cheaper alternatives. They will introduce one more home/portable console, but if that one also sells poorly. Then, I don't see them building another console.

At the end, this is how I see it. Especially my prediction of Nintendo's future. That's my opinion how it's going to happen. 

Sony just closed a bunch of Sony stores, laid off a bunch of staff from Santa Monica as well as canceled the new IP from them (as you stated). They also just laid off 5000 employees. All these tactics are tactics that companies use to help them from going under or to negate the negative effects when going under. The PS4 I hope is making money, but it's guaranteed that they haven't recouped their R&D costs associated with the PS4. We also have no idea if the amount of PS4's sold have rolled over the point where they can start recouping the R&D costs because in order to do that you need to cover the inital development and shipment costs as well. If Sony is lucky they have rolled over that point, but it's still fairly low numers for that to happen, but it should be substantially less than the PS3, because as you said they should have learned from their mistakes. While it might look like Sony has become strong by doing these cuts, it often fills stockholders with non confidence and since the stock prices are already so low it might create more volativity. Also, with all these cuts there is also due compensation. They seem to be following the same thing that Blackberry has done and that hasn't turned out too great for them in this economic environment. Time will certainly tell more in a year or so. People often play down the Sony loosing money to the Platstation brand, but in factuality the PS brand will be affected because it is their parent company, they aren't actually separate. 

Nintendo has been having troubles without doubt however Nintendo has already started to change their tactics to a point. They have started along that road anyway. All of that was brought up during their last investors meeting, among other things. They are going the opposite direction that Sony is in strengthening and broadening the Nintendo brand instead of shrinking it. 

In both cases it's going to be a sit, wait and watch scenario. There are a lot of decisions and crucial developments that we have no idea about that could have very strong results on both companies outcomes. 

Oh yeah, I forgot to mention the difference between Sony and Blackberry though. Blackberry is essentially debt free and Sony is well... Not so much debt free, far from it sadly.