Yes a P/E ratio of 31 is not bad for nintendo, especially consider the possible Wii explosion in the next couple of years, buy N stock now! The DS is unstopable and the Wii aint going away.

I agree will Facher, assets mean very little if you cannot use them to make money, in fact having too much assets to profit is a very bad thing, I would make a strong argument that Sony has a Sh!tty Return on Assets(Revenue divided by Current Assets)

Another factor to consider is risk. Nintendo is relatively small, so the downside risk is small as well. With only 3500 employees, they won't go into debt if the economy takes a big turn. Sony is huge and is saddled with many expenses. Should the economy turn, Sony could lose huge sums of money very quickly.

The entertainment industry is relativly immune to business cycle. People will always want their entertainment fix. Videogames and Movies are the last 2 things to go with the economy.

From an Associated Press article in this morning's paper about the Wii.

"The stock market values Nintendo at $75 billion, compared to $48 billion for Sony, which has six time the revenue."

In other words, if I am reading the thread and the article correctly, some here are confusing value vs. money.

What that means is that Sony sells more -- but it is not worth more. (And revenues are in many ways meaningless without expenses -- which provide information on net income).

Remember, something is worth only what someone will pay for it. The Wii is priced at $250 but is going for $475-$490 on eBay. The PS3 80GB model is prices at $500 but going for $450 on eBay. (Both of these are examples of currently completed auctions for new items).

Says something about worth.

Mike from Morgantown

Do the math and you'll see that Nintendo is making 1.44 Wii's per second (in a 30 day month). Considering that I don't think they're producing all day every day, I would say they're trying pretty hard to get this thing to market.

 Generally speaking, posting the URL to the article in discussion gives credit to your post... most people here will go and read the link for themselves, and only then pass judgement on any comments... I'm more curious on the stock pricings.

It depends on how you interpete 'size'.  If by size you only mean number of employees, then the risk is greater.  Less cost to reduce via layoffs, less diversification in products.  Sony is a prime example of this.  They are surviving because they can do layoffs, if needed, and can rely on other product lines besides the video game division that currently is not profitable.

Now if by 'size' you are factoring in revenues and profit per employee, then yes, smaller is better to maximize those ratios. 

Still, smaller by definition is riskier.  Note which net stocks / companies survived the 2000-2002 crash in the stock market.  It was the larger googles, etc, not the startups of 10 employees and an idea.

Your math is wrong.

I don't think it's fair to compare small startups which never generated profit with Nintendo which has been profitable for decades even in the worst of times.

5 year price chart

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=NTDOY&sid=6137&o_symb=NTDOY&freq=2&time=12

Analyst estimates

http://www.marketwatch.com/tools/quotes/snapshot.asp?siteid=bigcharts&dist=bigcharts&symb=NTDOY&sid=6137&time=13

In the stock market, you are paying for future value.  And usually that means future earnings.  As can be seen in the price chart, buyers started to bid up the price when they correctly forecasted the large increase in earnings (up to 1.42 in 3/07 to est. 2.42 in 3/08).  Now the analysts are forecasting a slow down in the increase of earnings to around 25%.  ($3.01 in 3/09), thus limiting the potential gain in the stock price.