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TheBraveGallade on 21 September 2017
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JWeinCom said:
Mnementh said:

Sorry, one factory that works at a pürofit or 20 factories of which some do profit, some currently not. Which is more valuable?

The number of factories is really irrelevant. 

Suppose the one factory is making billions.  10 of the 20 factories are making 10 million a year.  The other 10 are losing 5 million a year.  The one factory is more valuable.

JRPGfan said:

Nintendo stock is overvalued ?

In 2016 wasnt there a thread about how Sony had made more money from "ps plus" than the entirety of Nintendo did that year?

 

http://www.eurogamer.net/articles/2016-04-28-sonys-psn-is-making-more-money-than-all-of-nintendo

 

"During the financial year ending 31st March 2016, Sony's PlayStation Network generated 529.1bn yen in sales.

During the same financial year, the whole of Nintendo pulled in 504.4bn yen in sales.

In terms of operating income, or profit, PlayStation made 88.7bn yen (£538m). Nintendo made 32.8bn yen (£207m)."

 

If sony makes much more revnue & profit than nintendo, why is nintendo stock almost as high? 

Stock markets dont make sense to me at all.

There are a number of factors here...

First and foremost is historical performance.  Nintendo has made profit almost every quarter for its entire life, with a recent three year stretch being the only time they've endured losses.  So, even if 2016 was a poor year for Nintendo and a great year for Sony, that doesn't make them a more valuable company.  It's like if you have a baseball team that crushed its rival in the most recent game, but had lost the previous ten.

Secondly, you have to look at assets, liabilities, and debt.  Sony has a lot of long term debt, which diminishes the future profitability of the company.  In 2016, when PSN was making all that money, a big chunk of it had to go to creditors. If you buy the company, you buy the debt with it.  Nintendo on the other hand has no debt.

Sony also has a ton of short term liabilities.  That's a bit different from debt, as it doesn't necessarily carry interest.  Basically, these are bills that are going to come due in the near future.  Sony has more short term liabilities than it has cash available to pay for them.  So, if Sony has a bad quarter or year, they're going to need to either issue more stock, sell long term assets, or borrow money at interest.  None of those are desirable options.  If Sony has a few consecutive bad years, they could be in real trouble.

Nintendo on the other hand has enough cash on hand to pay whatever bills they have, and would still have billions of dollars to spare.  Nintendo could lose about half a billion dollars for 20 years, and there would be no external pressure on them.

Then, there is future potential.  Sony has their hands in a lot of businesses with iffy futures.  Their movie division is tanking, their phone business has had trouble making any headway against google and android, dedicated cameras are disappearing (Sony makes more money selling camera components for phones), and so on. 

Nintendo is in the same boat to an extent, as the future of dedicated gaming hardware is iffy.  But, Nintendo's most valuable asset is their intellectual property.  Even in a world where dedicated gaming consoles  go the way of the CD player, Mario and Pokemon alone are worth billions.  If Nintendo was forced to leave the hardware business, they could instantly become the most valuable third party developer.




To sum it up, Sony is like a guy who has a really high paying job, but has tons of expenses, owes the bank a lot of money, and has a history of money problems.

Nintendo is like a guy with a decent paying job that has a perfect credit score, has no debt, and has virtually no expenses.

yeah sony can't go third party cause... they live off of being a third party support. if they give up hardware, they give up.

ninty on the other hand... there is a REAOSN why sony fans wanted ninty to go third party, cause even die hard sony fans want a nintendo game or two.

 

well, more accurately, sony is the CEO who earns a lot but also has a lot of debt old and new, though not enough to compromize his high living standerds.

ninty is the division head of a big well off company who also managed to accumilate a big bank account, though he made a mistake in a stock investment recently.