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Forums - Gaming Discussion - Corporate Health of Sony, Nintendo and MS

kurasakiichimaru on 27 January 2016
SpokenTruth said:
kurasakiichimaru said:

More like Amiibo has helped bridged themselves to a bit of a profit.

So yeah they are failed products.

Amiibo retail for ~$13.00.  Last financial report (Oct 29) showed 21 million sold since launch.  That is $273 million at full retail (Nintendo probably sells them to retailers for half that price) since June 2014.  Remove the retail cut and that figure is likely closer to $135 million. Nintendo also reported full fiscal year profitability before Amiibo even launched.

 

Pretty sure Q1 and Q2 2014-15 was down for Nintendo and that was before amiibo launch. The depreciation of yen against dollar also helped during that time. So yes. Wii U and less being 3DS were failures without the Amiibos and that exchange rate.



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DonFerrari on 27 January 2016
SpokenTruth said:
DonFerrari said:
SpokenTruth said:

Why are you presumming something I never said based on your error?  I really shouln't even need to answer your first question because you know good and well the answer. 

Do you consider the Wii U and 3DS failed products?  If so, then how the hell are they currently making a profit?
That said, you can also have successful products and still take major losses?  PS3 was successful and their gaming division was often taking large losses. 

No, financials don't exist in a vacuum but they aren't polarized as success = profit and failure = losses either.

I know the answer. Both are failures when one will sell less than 50% the predecessor and the other only 15%. They are making profits not only because of amiibos but because the R&D were already paid during Wii and DS era. And it isn't like they are making large profits, and even more they are profiting on their SW. But if they keep failing on HW and their SW having increased cost because of generational leaps but lower market to sell you can see then losing a lot of money. If you preffer to ignore all of that no problem, doesn't matter mine or your opinion the reality will stay the same.

Don, of course they matter.  But you're also ignoring the fact that my statement was simply showing how much they lost and how much they still have and could absorb the same level of loss.  That's it.  It's a calculation of cash / biggest yearly loss.  Nothing more.  It's just a statement to exemplify in simple terms.

You really have this bad habit of presuming that a statement means more than it does.  If I say X for a simple example, you bring in the rest of the alphabet and I have to go on this long back and forth telling you that X just meant X.

Yes I suppose a lot, but ask for clarification. If you give open ended answer they only beg for more questions.

If your only point is that a company with a certain wealth could take a 5% of this wealth as losses every year for several years, mathematically yes. I just don't see much possibility of that happening to Nintendo that would be sustainable. If they launched a console that they take a major hit financially (but sell really well) in a way that they may have 3 years of deep loses but then even bigger profits in the next 3 that would be sustainable. But I don't see a scenario that they would be on loses for 20 years. Sony wasn't always losing money on all markets and selling little, that is why for me the parallel was very strange.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

Swordmasterman on 27 January 2016
SpokenTruth said:
Teeqoz said:
SpokenTruth said:

No, that's not what recovering from losses means.  Let's look at a fictional company and I'll show you what I mean.


2011 - $500 million losses
2012 - $2 bilion losses
2013 - $2 billion losses
2014 - $100 million profit
2015 - $200 million profit

As you can see, this company is making profit again but has not yet recovered from the losses.  They would still be down $4.2 billion over the past 5 fiscal years.  A full recovery would bring that up to a positive overall figure. 

 

That's a pretty weird definition of recovery though. The damage of those 4 billion losses will be just as big regardless of how much money you make later. The most reasonable way to talk about recovery is if they've recovered their ability to make an (equal sized) profit as before their financial troubles, and in that sense, Sony has pretty much recovered.

See below.

kurasakiichimaru said:
SpokenTruth said:
Teeqoz said:

Sony is back in the black if that was what you mean by recovered from those losses.

No, that's not what recovering from losses means.  Let's look at a fictional company and I'll show you what I mean.


2011 - $500 million losses
2012 - $2 bilion losses
2013 - $2 billion losses
2014 - $100 million profit
2015 - $200 million profit

As you can see, this company is making profit again but has not yet recovered from the losses.  They would still be down $4.2 billion over the past 5 fiscal years.  A full recovery would bring that up to a positive overall figure. 

Does it matter though? Sony is a bigger company, has more cash and assets and is now controlling their liabilities even more through their restructuring. As long as they're back to profiting, Sony can stand on its own because they could.

I never said they weren't in a better position than before.  But they have not yet returned to the profitability levels they used to have (much the same way Nintendo has not either).  I did say they will fully recover.  It just may take a while.  No need to dive into that anything more than that.

How Sony, only had 200 Millions of profit last year, if they were reporting more than 200 Millions of profit per quarter ?, and on 2015's 2 Quarter they reported 289 Millions of Profit, and they did not reported loss, last year.





KLAMarine on 27 January 2016
DonFerrari said:
KLAMarine said:
DonFerrari said:
KLAMarine said:

I'm not messing with you. The fact that I bothered to do the math to support my statements will attest to that.Sony has more employees than Nintendo. If we divide "armor" by employee size, we get the following:

Nintendo:

$17.4 billion / 5,000 = $3,480,000 per employee

Sony:

$22.1 billion / 130,000 = $170,000 per employee

What do you make of this? Who do you think might be able to hold onto their workforce for longer during times of crisis?

I certainly know who I'd rather work for.

You assume you have almost no knowledge on the issue but keep doing meaningless math to prove Nintendo is safier or have more armor? If you don't know what you are talking about it's better to just say you don't know.

I've said before that I'm not at all an expert and if any business majors see any faulty reasoning in my logic, I want them to correct me.

With that said, what is meaningless about my math?

You can answer that yourself, what meaning you expect on "assets/employee" calculation?

My "assets/employee" calculation was in response to Eddie_Raja's constant bringing up of Sony being able to survive "disaster" better than Nintendo. In response, I calculated how much each company has in reserve to keep their workforce employed. As one can see, Nintendo can afford to keep each one of their employees longer than Sony in part because they have much less employees on the payroll.

That is if my reasoning is sound: again, I'm no business major.

DonFerrari said:

I would dare say that in fact having more employees would make government more prone to bail out the company making it harder for sony to bankrupt than Nintendo, even more when sony acts in a lot more fields and work in technology evolution instead of only making games.

That's a big if. I don't recall the Japanese government jumping in to help Sony when it sold off its Vaio line or when it reported huge losses in the mobile phone business.



DonFerrari on 27 January 2016
KLAMarine said:
DonFerrari said:
KLAMarine said:

I've said before that I'm not at all an expert and if any business majors see any faulty reasoning in my logic, I want them to correct me.

With that said, what is meaningless about my math?

You can answer that yourself, what meaning you expect on "assets/employee" calculation?

My "assets/employee" calculation was in response to Eddie_Raja's constant bringing up of Sony being able to survive "disaster" better than Nintendo. In response, I calculated how much each company has in reserve to keep their workforce employed. As one can see, Nintendo can afford to keep each one of their employees longer than Sony in part because they have much less employees on the payroll.

That is if my reasoning is sound: again, I'm no business major.

DonFerrari said:

I would dare say that in fact having more employees would make government more prone to bail out the company making it harder for sony to bankrupt than Nintendo, even more when sony acts in a lot more fields and work in technology evolution instead of only making games.

That's a big if. I don't recall the Japanese government jumping in to help Sony when it sold off its Vaio line or when it reported huge losses in the mobile phone business.

The probability of a company surviving isn't equal to the probability of keeping everyone employed this is why your math on that wasn't meaning much.

Japanese government didn't jump to sabe a branch (and they sold it, didn't just bombed it), which is different from saving a company as a whole. And perhaps Sony didn't run for help like American banks have done to save their screw ups and make money while draining the population



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

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Swordmasterman on 27 January 2016
SpokenTruth said:
Swordmasterman said:

How Sony, only had 200 Millions of profit last year, if they were reporting more than 200 Millions of profit per quarter ?, and on 2015's 2 Quarter they reported 289 Millions of Profit, and they did not reported loss, last year.

I'm sorry. I'd like to answer your question but I'm not really certain what your asking. 

Someone said (i dont remember if was you), that Sony's finance were this.

 

2012,Loss

2013, Loss

2014, 100 Millions Profit

2015, 200 Millions Profit.

 

but in 2015, they were reporting more than 200 Millions of profit per quarter, and on Q2, they reported 280+ Millions of Profit.



KLAMarine on 27 January 2016
DonFerrari said:

The probability of a company surviving isn't equal to the probability of keeping everyone employed this is why your math on that wasn't meaning much.

But employee salaries are a natural expense for any business during normal operation. I imagine the assets/employee ratio would be at the very least a decent indicator of corporate health. Of course it's not the only indicator but if you have other ideas, please feel free to suggest other possible indicators.

DonFerrari said:

Japanese government didn't jump to sabe a branch (and they sold it, didn't just bombed it), which is different from saving a company as a whole.

Sony's salvation in case of "disaster" is still dependent on IF the Japanese government wants to bailout Sony in case of failure.



DonFerrari on 28 January 2016
Swordmasterman said:
SpokenTruth said:

I'm sorry. I'd like to answer your question but I'm not really certain what your asking. 

Someone said (i dont remember if was you), that Sony's finance were this.

2012,Loss

2013, Loss

2014, 100 Millions Profit

2015, 200 Millions Profit.

but in 2015, they were reporting more than 200 Millions of profit per quarter, and on Q2, they reported 280+ Millions of Profit.

He said generic corporation, but he could be infering to Sony, I just don't remember their losses on 2012 and 2013 being that big, but if he counted from 2000 to 2013 there would be even more losses.

KLAMarine said:
DonFerrari said:

The probability of a company surviving isn't equal to the probability of keeping everyone employed this is why your math on that wasn't meaning much.

But employee salaries are a natural expense for any business during normal operation. I imagine the assets/employee ratio would be at the very least a decent indicator of corporate health. Of course it's not the only indicator but if you have other ideas, please feel free to suggest other possible indicators.

DonFerrari said:

Japanese government didn't jump to sabe a branch (and they sold it, didn't just bombed it), which is different from saving a company as a whole.

Sony's salvation in case of "disaster" is still dependent on IF the Japanese government wants to bailout Sony in case of failure.

It's a indication of their health, but keeping the jobs isn't a necessity to keep the company afloat. But certainly depending on the costs to fire an employee it may hold more or less significance.

Yes it would depend on the governement, but if they are big enough they have more weight to pressure.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

AsGryffynn on 28 January 2016
DonFerrari said:
KLAMarine said:

I'm not messing with you. The fact that I bothered to do the math to support my statements will attest to that.

Eddie_Raja said:

Your math clearly showed that Sony is worth more money overall.
Eddie_Raja said:
SpokenTruth said:

I think the issue here is that you are looking at absolute values and he's looking as at ratios and percentages.

 

If that is the case, you are both correct in from those viewpoints.  The question then becomes, which viewpoint is actually a better indicator of corporate health and how well they could weather problems?

Which is why I have said several times that absolute value is more important in the case of disaster - that is one my main points.  Having the best Ratios is nice for investor meetings, but when the shit hits the fan what matters is how long can you survive hardship while you steer your company back on course.  Sony's (Too?) massive size allowed them to sell off nearly endless pieces of their business when some of their divisions were going through hard times.   If Nintendo were to be hit anywhere near as hard they would go bankrupt very quickly.

Sony has more employees than Nintendo. If we divide "armor" by employee size, we get the following:

Nintendo:

$17.4 billion / 5,000 = $3,480,000 per employee

Sony:

$22.1 billion / 130,000 = $170,000 per employee


What do you make of this? Who do you think might be able to hold onto their workforce for longer during times of crisis?

I certainly know who I'd rather work for.

You assume you have almost no knowledge on the issue but keep doing meaningless math to prove Nintendo is safier or have more armor? If you don't know what you are talking about it's better to just say you don't know.

AsGryffynn said:
DonFerrari said:
Teeqoz said:

Even the most profitable companies take up loans, because sometimes you need short term cash to cover expenses, and it makes no sense to take that cash from your main reserves. This is the same reason the country I live in (Norway) can run a surplus on its federal budget, but still takes up loans to cover costs. It's not as simple as a "They have enough money to pay it, so why don't they."

Also corporate bonds don't work like that. It's not like you can pay it whenever you want. They have due dates and set interest payments for years.

Government debt is a little more complicated... A lot of the reserve is used to manipulate the market in some way and play with exchange rates, and serve as cushion. So they can't dispose of that money and need external money. Other times like in Brazil they take money from banks with like 14% interest and lend subsized to "improve industries" and that money is lent by the same bank by 4% interest rate, and basically the bank is making 10% profit with a money it doesn't even own.

On company side, you could see on simpler term that a investiment have 25% return rate while the lent money will cost 10% on that period, so it's better to own money because it'll generate profit to cover the cost of it... That is why MS even having much more cash than Ninty still pick a lot of loans on the market... Ninty is probably too risk adverse and preffer to sit on their cash and invest very little and lend even less.

As far as I know USA always wanted to swallow the world economy and MS in 90's were already quite big. But what does that have to do with Sony problems? MS never caused much trouble to Sony besisdes maybe pushing them to bad decisions on PS3 (which I doubt, they would probably release the same HW independt of MS being or not in the market) or having to drop the price to fast and losing money (Sony usually drops HW price fast, but yes I can see MS pressure being a decisive ingredient here).

They weren't the juggernauts they are now. Windows was only starting to become popular (Windows 98 was when the rollout started) and the US economy swallowed the world whole during the Clinton years, so American companies started expanding like crazy until the Great Recession. When the Xbox appeared, they weren't that important, but with the 360 they started to pressure Sony into severing what they didn't profit from and created competition to help lower game prices.

They didn't really change anything. I just wanted to clarify they weren't as big back then...





rolltide101x on 28 January 2016
mountaindewslave said:
CosmicSex said:

Its really considered healthy to have some debt.  Have good debt as a consumer is better than not having any debt (for whatever reason but its true).

I was actually shocked.  I think they need to have more debt really.

its actually not 'healthy' to have any debt at all

its a false concept in society that having some debt is good, and the only reason for that is that it gives creditors and banks something to look at in terms of your history and reliability. if you have debt and pay it off then people consider you trustworthy. nothing more

the concept that 'debt is good' makes zero sense

From a consumer standpoint debt is almost a necessity. Without some sort of past debt getting a house loan would be very difficult. My parents are actually going through this right now. They want to buy a house, they have enough money to afford the house payment, but they have not had any debt in 7-8 years so even though their credit score is pretty high they are still having a bit of trouble. Though they will get it in the end if they keep trying