Nintendo's Stock: Values Keep Rising

[VideoGameAccountant]

Teeqoz said:

Hedra42 said:

Care to elaborate how this is misinformed?

Easy. Sony gets loads of money (and profit) from non-PS businesses.

Here's Sony's results per segment for the 12 months ending on march 30th:

As you can see, Sony had higher operating income from financial services (primarily life insurance), than gaming, and they also had sizeable profits from Music, Home Entertainment & Sound (TVs and speakers et.al) and Imaging Products and Solutions (cameras and lenses and stuff like that).

The narrative that the only segment of Sony currently doing well is Playstation is quite wrong. It is one of the best performing, and in the future might become the best performing segment, but still not the only one making money.

Your assessment is misleading. Lets look at the actual numbers.

Gaming and Network Services are #1 in terms of revenue and #2 in terms of operating income. In fact, in terms of both revenue and profit, this divisions blows the others (outside of Financial Services) out of the water. The next closest, home entertainment, only made 58.5 billion with a profit ratio of only 5 percent compared to Gaming 8 percent. When you combine the profit of music, image production and home entertainment, they make up about 180 billion as compared to gamings 135 billion. Its not good when one division makes up 75 percent of three other divisions. This doesn't even speak to the fact that three of these divisions are losing money (with one of them doing better this year if you can beleive that).

Also, the insurance business is based on taking premiums and reinvesting them to build a cushion. The profit it makes will likely go back to buying more investments in case Sony has to pay out a lot (like a missile hitting Tokyo and killing a lot of people, for instance). 

So no, not every single dollar is coming from gaming (no one was saying that anyway). But of all of Sony's divisions, gaming is what is doing well. The problem is this industry is very volitile. Nintendo has stated this is why they have so much cash. Sony had loses in 2013 and 2014 and in those years and insurance didn't save them (in fact, that divisions had higher operating profit in those years). And many of these divisions that were doing well this year had loses in those years. This is what everyone is talking about. The only division worth its weight is gaming as the others, besides maybe music and finance, have been dragging the company down. If the PS5 doesn't nail the landing, Sony could be in very hot water with worse credit than they were at the begining of the Great Recession.