I hear a lot of people saying Nintendo can't afford to compete with a traditional console...

[foxtail]

Ruler said:

mountaindewslave said:

Nintendo actually has way more money than Sony. Sony is a larger company but they have a lot of a debt and have very limited cash reserves. in terms of assets and cash on hand Nintendo is in  a way better spot that Sony, despite the recent success of the PS4

Sony has more assets

Sony has more assets, that much is true.

But I think what is trying to be pointed out is the stark difference that can be seen when you look at both companies total liabilities.  

Total Liabilities is the aggregate of all debts an individual or company is liable for.

According to both their latest (individual) financial statements:

Sony has ->

12,900,614  Million Yen in Total liabilities.

Nintendo only has ->

185,387  Million Yen in Total liabilities.

From that we can see Nintendo is burdened way less by liabilities,

but also that the amount of liabilities Sony has accumulated is huge (more than $100 Billion USD).