Grampy said:
This is not to add fuel to the fanboy flame war which I find childish and boring. So children go outside and play so grownups can talk.. Obviously I, like everyone else, bought the console that appealed to me. I'm not married to it, Nintendo doesn't send me a check, or even a Christmas card. I just prefer motion control, but so what. You like what you like for your own reason.
But here is some interesting food for thought about what a mismatch of companies we are dealing with..
Sony is cutting 8,000 jobs out of 160,000 because they are losing money and are out of cash.
According to Fortune Magazine that 8,000 is twice Nintendo's total payroll. The company's 3,400 employees generated $8.26 billion in revenue in 2007, or $2.5 million each.
While exchange rates and fiscal calendars complicate comparisons to U.S. companies, let's do it anyway. Over roughly the same time frame, Microsoft employees generated $624,000 each.
That's lean and mean competition.
But Sony is so much bigger , right? Maybe.
In March, 2007 Phil Harrison was boasting "Sony Computer Entertainment Studios employs some 2,200 developers across 14 different studios... it has more programmers, artists, audio technicians and designers than Microsoft and Nintendo combined."
Ubisoft, with a ‘technical workforce' of 2,400 sits in second place, while Electronic Arts with 5,500 comes in first.
That's big alright.
But just 6 months later Forbes announced the Nintendo's market capitalization had just passed Sony at $52.9 Billion US. At the time it flip-flopped the same day but it was the tip of the iceberg.
By October, 2007 it was a done deal. Reuters announced: Nintendo zipped past 10 trillion yen ($85 billion) in market value on blistering demand for its red-hot game machines, having almost tripled in value since launching the Wii a fivefold increase in the past two years. Nintendo's market capitalisation is almost double that of Sony, whose total revenue is more than eight times as big as Nintendo's.
Nintendo is now Japan's third-most valuable listed company behind automaker Toyota Motor Corp and Mitsubishi UFJ Financial Group Japan's largest bank, and analysts see the game machine maker's shares setting more high scores.
As of Dec 31the three companies stacked up like this in total capitalization:
Microsoft (the whole company) = $ 172 Billion US
Sony (The whole company) = $22 Billion US (less than half its value in June, 2007)
Nintendo = $54 Billion US (even after the major hit stocks took, higher than June 2007)
Now looking at Ninetendo's latest financial report they are also sitting on uncommitted CASH Reserves of $18 Billion US and that amount has undoubtedly increased substantially since then.
So the take home message is that tiny Nintendo, once a company that made playing cards, could actually buy all of Sony, every single share for CASH - not borrowing one red dime. There's a creative solution to the console wars. They would be unlikely to have any desire to do so, but if anyone thinks they are going to beat Nintendo now by outspending them, or out research and developing them, or thinks they can back them down in a price war better have somewhere upwind of $25 Billion US play money. Microsoft might have that much but I'm not betting on it and also, video games are a sideline. Games is all Nintendo does.
Talk about the 500 lb gorilla.
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