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Forums - Nintendo - Nintendo currently has $4.7 billion in the bank

Roar_Of_War on 27 June 2014

I'd like to see Nintendo buy Capcom, but it's hard to justify them spending that much if this is all they have in bank.

 

Unless they sell some of those "assets" or make profit quickly on some of their upcoming investments.



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TheLastStarFighter on 27 June 2014
theprof00 said:

Crytek is a company known for great visuals and underwhelming gameplay. It perfectly suits pc where it already is.
Nintendo is like, the exact opposite. A company Nintendo should buy would be sega, capcom...you know, studios who have a lot of creativity and assets, but are lacking in leadership and focus.


You're confused.  Vigil and Free Radical are not Crytek.  Crytek bought them, but those studios are solid.  Free Radical is the "Rare" that everyone misses from Nintendo's past, and Vigil makes great Zelda style games and happen to be located across town from Retro.  Both of these studios are now being burdened by Crytek and it's desperate decision to go Free-to-Play.  Right now Nintendo could probably buy them for a good price from Crytek if the situation is as bad as reported.  Sega would have no value for Nintendo, since it's expensive and the game content often overlaps with Nintenodo's own.  Capcom, yes, that would be a perfect fit.



foxtail on 27 June 2014
Skidonti said:
foxtail said:
MDMAlliance said:

So basically you're confirming that the value provided up there isn't necessarily based on assets but an analysis on how much Xbox might be worth based off of Nintendo's "multiples"?

Basically yes, their analysis is not based on assets or anything of the sort.  I think if people really want to know what the Xbox division is worth then MS should release thorough, clear and transparent financials for Xbox division alone. 

For comparison, by Nintendo's PSR multiple Bloomberg estimated the Xbox division was worth $17 billion less than seven months earlier.

It seems to be based on relative current market perfomance (essentially, stock trades n' stuff), but I don't know how they're isolating Xbox from the rest of MS to even do the calculation... but it's not like I'm an afficionado. In general it just seems like there are a lot of variable factors involved in the estimation method and we can't really know without MS just telling us.

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.



Skidonti on 27 June 2014
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.



foxtail on 27 June 2014

Skidonti said:

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.

I think it was just a revenue estimate since MS does not publish the numbers for the Xbox division alone in their public financials.



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NintendoMonkey33 on 27 June 2014

Crap i'll have to change my sig



ikki5 on 27 June 2014
mii-gamer said:
Can someone explain to me in simplistic terms what happened to the rest of the cash?



 

They did just kind of build a brand new building... which is now their main HQ in Japan.



Kresnik on 27 June 2014
TheLastStarFighter said:

You're confused.  Vigil and Free Radical are not Crytek.  Crytek bought them, but those studios are solid.  Free Radical is the "Rare" that everyone misses from Nintendo's past, and Vigil makes great Zelda style games and happen to be located across town from Retro.  Both of these studios are now being burdened by Crytek and it's desperate decision to go Free-to-Play.  Right now Nintendo could probably buy them for a good price from Crytek if the situation is as bad as reported.  Sega would have no value for Nintendo, since it's expensive and the game content often overlaps with Nintenodo's own.  Capcom, yes, that would be a perfect fit.


Crytek UK are about as much "Rare" these days as Rare themselves.  It seems like theres little, if any of the original talent left there.



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Metalheadgamer on 27 June 2014
Lyrikalstylez said:
Microsoft should buy nintendo for 4.8 billion!

Eh....no. Remember what happened to Rare? Besides, Nintendo would never allow themselves to be aquired. They are too stubborn for that. 



venomcarnage on 27 June 2014

http://www.destructoid.com/money-in-the-bank-nintendo-s-still-got-over-10-billion-in-assets-277274.phtml