Nintendo Stock Doubles In Last Few Months, Now Bigger Than Sony

[Steven Bogos]

Nintendo Stock Doubles In Last Few Months, Now Bigger Than Sony

The recent lift on console bans in China [http://www.escapistmagazine.com/news/view/131078-China-Lifts-Ban-on-Sale-and-Production-of-Consoles] reportedly has something to do with Nintendo's stock rise.

You probably wouldn't believe it based on all the doom and gloom we hear regarding the Wii U [http://www.escapistmagazine.com/news/view/121778-Wii-U-Sales-Forecast-Cut], but Nintendo's stock has been steadily rising over the last few months. Its market capitalization (the total value of all its shares) has doubled to $18.4 billion, edging out Sony, which has dropped to $17.7 billion since last November.

Nintendo, based in Japan, has been trying to make inroads with neighboring China for years, a move that paid off when its stock price rose by 11 percent after China lifted its 14-year console ban [http://www.escapistmagazine.com/news/view/131078-China-Lifts-Ban-on-Sale-and-Production-of-Consoles]. The runaway success of the 3DS is also responsible, as well as investor rumors that Nintendo will shortly announce significant changes to its business model.

While this doesn't necessarily mean that Nintendo has more money than Sony, it does mean that the business world values it more. What's more impressive is that this figure includes the entirety of Sony, which spans several entertainment and electronics divisions. While Sony's gaming division is going well with strong sales of the PS4, it seems its other divisions are the ones bringing it down.

For comparison, the biggest third party publisher is Activision Blizzard, with $12.7 billion market capitalization, with EA trailing behind at $7.1 billion. Microsoft is in a league of its own at $304.0 billion, although as with Sony, this figure includes all of its businesses and not just the games division.

Source: Metro [http://metro.co.uk/2014/01/08/nintendo-valued-as-bigger-company-than-sony-4254425/]

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[Diablo1099_v1legacy]

...So basically, Nintendo is worth more then all of the Sony Corp?
Jesus, This is why you never doubt the House Mario Built and I can imagine that Nintendo's lack of Mature Titles would ironically be a help in the Chinese market.

I can't imagine the Government there being against a console that doesn't have Battlefield 4 or some other M.M.S. that demonizes the Chinese on it.
On top of that, China isn't exactly the most colorful place on earth so perhaps the bright and cheerful roster might be more appealing then all the blood and dirt of the western AAA market.

 

[MrBaskerville]

biggest games company in the world by revenue and pretty much always has been...as for comments above about BF4 and the like...it's not really in the same market...Nintendo is virtually unchallenged in it's core market...which is effectively "pre-teen" gaming...

people just grow up is all...and for some reason they expect Nintendo to grow up alongside them...which is kinda dumb really...

that's not to say Nintendo games can't hold enjoyment and depth for older players...they can and do...but it's not sales to that demographic that have always sat at the core of Nintendos business model...whereas when it comes to PS or xbox...there are virtual no "kid friendly" games for them...

I dunno, Sony has been pushing games like Ratchet and Clank, Little Big Planet and similar for a very long time. They defineately try to have a very broad appeal. More recently they tried the Wonderbook thing, it was largely scoffed at by gamers, but children seems to love it.

 

[RandV80]

largest "video game company" in the world by revenue and pretty much always has been...as for comments above about BF4 and the like...it's not really in the same market...Nintendo is virtually unchallenged in it's core market...which is effectively "pre-teen" gaming...

people just grow up is all...and for some reason they expect Nintendo to grow up alongside them...which is kinda dumb really...

that's not to say Nintendo games can't hold enjoyment and depth for older players...they can and do...but it's not sales to that demographic that have always sat at the core of Nintendos business model...whereas when it comes to PS or xbox...there are virtual no "kid friendly" games for them...

Eh as someone who's in their 30's now I've always found the shoehorning of Nintendo as a 'kids' console a little annoying. The problem is in our entertainment industry we don't really have a good distinction for 'youth', between child and adult. On the Playstation and Xbox there are many games that would be considered 'mature' to a teenager, but to most adults you could still call it a 'kids' game. Gears of War would be a good example of this. It will vary from person to person but I see those two as more 'aged 12-24' consoles, and eventually many will get to the point where they're not bothered by Nintendo's 'childishness' and can appreciate their games again.

 

[Flippincrazy]

Well played, Nintendo.

Just goes to show that the 'failure' (in the sense of units sold) of the Wii U has done surprisingly little to damage the company's reputation and revenue stream. I'd imagine that the Chinese will become major customers for Nintendo; their focus on family-focused fun will be welcomed over there...although the ones with obvious Japanese influences probably won't!

 

[captainballsack]

"Huur durr Nintendo should just give up and go third party"

http://www.youtube.com/watch?v=Ev_nuki0epE

 

[Kahani]

While this doesn't necessarily mean that Nintendo has more money than Sony, it does mean that the business world values it more.

The business world values Twitter at over $30 billion, yet they've never made a single dollar in profit and have no sensible plans that could ever manage to do so. What the business world says a company is worth via shares has absolutely nothing to do with it's value in the real world.

That's not to say Nintendo isn't successful. For all the whining about the WiiU, it's pretty clear that they're doing just as well as always. But comparing two imaginary numbers tells us nothing about their value relative to any other company.

 

[Ed130 The Vanguard]

I'd imagine that the Chinese will become major customers for Nintendo; their focus on family-focused fun will be welcomed over there...although the ones with obvious Japanese influences probably won't!

That's the rub isn't it?

Especially with the recent? dick waving over some islands that they've been having.

 

[Korskarn]

While this doesn't necessarily mean that Nintendo has more money than Sony, it does mean that the business world values it more.

The business world values Twitter at over $30 billion, yet they've never made a single dollar in profit and have no sensible plans that could ever manage to do so. What the business world says a company is worth via shares has absolutely nothing to do with it's value in the real world.

That's not to say Nintendo isn't successful. For all the whining about the WiiU, it's pretty clear that they're doing just as well as always. But comparing two imaginary numbers tells us nothing about their value relative to any other company.

That's... not exactly how valuations work. Shares are bought on the expectation that the holder will receive payments greater than the purchased price, either through dividends or share buybacks. Specifically for Twitter, the share price is not reflective of current profitability, but because revenue has grown from $28mil in 2010 to $254mil in 2012 and had already pulled in $253mil for the first 6 months of 2013. The expectation is that the growth will continue, even at a slower pace, and soon start pulling in tens of millions of profits... which will then go to shareholders.

Similarly for Nintendo, the net income for 2013 was ¥7bil up from a -¥43bil loss in 2012 - so the conventional wisdom is that absent the R&D and Marketing costs of a new game platform for a few more years Nintendo is at least likely to continue to be profitable, if not push those numbers up slightly. Meanwhile Sony went from -¥15.5 to -¥19.3, and the PS4 is currently being sold at a loss so is unlikely to push that number upwards (the gaming unit in particular went from +¥2.3bil in 2012 to -¥0.8bil in 2013).

So valuations are actually a pretty good indicator of "their value relative to any other company". They aren't perfect, of course, but claiming they're "imaginary" is a pretty big stretch.

 

[Insideout Ink Demon]

people just grow up is all...and for some reason they expect Nintendo to grow up alongside them...which is kinda dumb really...

I've seen this with Pokemon, people wanting a more mature version. I wonder, do people listen to themselves lol

 

[OldNewNewOld]

Yet Nintendo is dying while Sony isn't.
At least according to the hobby internet "analysts" who just happen to be fanboys of other companies.

 

[babinro]

This makes no sense to me but it must just be the internet circle I find myself with. These kinds of announcements happen all the time actually. Like how the xbone has sold over 3 million units when all the hate and boycotting made it sound like it would take them several years to reach this plateau (if ever).

Just goes to show you that popular gaming / online opinion in these parts don't always translate to real life.

What makes me happy about this Nintendo news is that people seem to genuinely like the WiiU as a console. It gets almost no respect or praise but those few who own one don't tend to give it bad press. More than what you can say for the Xbone or PS Vita.

 

[shiz1]

Yet Nintendo is dying while Sony isn't.
At least according to the hobby internet "analysts" who just happen to be fanboys of other companies.

I hope you're not serious about this only being the result of hobby analysts...

Why would you not believe this to be possible? Sony is a very big company with god knows how many branches. Some of their branches do great, some are crippled by fierce competition, for instance radio, tv, etc.

Nintendo's stock being higher than sony's only means that a few big fish think it's more likely for them to get more money if they invest in Nintendo. Do you really think people listen to what some amateur on the internet says when wondering where to invest, say... 50000 dollars? I'd even say they don't give a rats ass about what games come out or this whole 'console wars' sillyness. they care about numbers and especially about those that will make them richer.

Nintendo also has a huge brand name value. Back in the days parents could say they bought their children a nintendo playstation. Or even a nintendo. For most parents that was an accepted description of what you bought your child for christmas. It's not as widespread anymore but some older people still don't make any distinction between nintendo and sony. Micorsoft is different because that has always been linked to pc's more.

What the stockmarket says has not a lot of value on you as a consumer. It only matters if you're in it to make money.


edit: hello everyone, i guess this means my time of lurking on here is over ^^'

 

[Covarr]

I don't get it. Why would this affect Nintendo's stock price but not Sony's? Do they not both produce games consoles?

P.S. Thanks

 

[Aiddon_v1legacy]

Yet Nintendo is dying while Sony isn't.
At least according to the hobby internet "analysts" who just happen to be fanboys of other companies.

Well, keep telling a lie and eventually it might be regarded as the truth. Analysts will only see what they WANT to see, regardless of whether it makes any sense or not. It just really shows how incompetent most games analysts are when they can have the most objective numbers shown to them and they STILL preach that Nintendo is somehow struggling despite the fact that it's obvious that they are making more money than ANY of their competitors right now. The idiocy on display is so stupid it should be used as material for how NOT to study business, especially when dealing with an international scene

 

[Jumwa]

NINTENDOOMED

God, when will they just realize it's pointless and fail so I can feel validated about predicting their death for the past twenty years?

 

[TimeLord]

...as well as investor rumors that Nintendo will shortly announce significant changes to its business model.

Can a man dream that that could mean the destruction of 3DS region locking?

I know I'm crazy but I live in hope.