| foxtail said: I think all they did was a simple P/S calculation, and by that they took Nintendo's stock price at the time and calculated that it sold for 2.4 times its trailing 12-month revenue. I think they then multiplied that 2.4 number by the estimated 7 billion in Xbox revenue = 16.8 billion (~17B). This multiple is not an fair or accurate way to valuate the Xbox division because of how fundamentally different it is to Nintendo as a whole. Not only that but focusing on revenue may be misleading giving a high value to the Xbox division because it generates a high revenue while actually losing significant amounts of money, it is a low margin business for MS. |
Ah okay so they were able to use revenue statements from just the "Xbox" division. Of course, as you mentioned, it's not necessarily a fair comparison.
Yes, the low Xbox margins were the whole reason there was that "spinning off the Xbox division" speculation last year around the time Steve Balmer announced he was leaving.
