How much is Nintendo really worth? (Clue: very much)

by Jonti Davies { Nov 24th 2006 at 10:35PM }

Recent financial figures released by Kyoto's most successful hanafuda manufacturer explain just how sickeningly rich the company is. NCL's total net assets as of September 30th, 2006 stand at US$10.86 billion. Do you know how many Rares you could buy for that? Too many!

Nintendo's net sales (nothing to do with this here internet) for this fiscal year, which ends on March 31st, 2007, are forecast to be US$6.378 billion, while net profits (after the taxmen have taken their pieces of the sumptuous pie) for this financial year are expected to total US$862 million. That's quite a lot of money.

According to a statement released by Nintendo of Japan's accountants, which we've partially emboldened for scary effect:

"In order to expand gaming population in the console business as well, Nintendo will aim to popularize "Wii" (the latest video gaming console to be launched at the end of the calendar year) as an "everyday-use gaming device for all the family" allowing the new emergence of gaming console inseparable from daily lives, under the concept of "brand new days with Wii". As for handheld gaming market, Nintendo will continue to strive to gain more popularity with an expansion in software lineup by launching new types of games that expand user base such as "Touch! Generations" as well as easy accesible games to challenging games in due proportion."

Key phrase there, if we've read it correctly, is "inseparable from daily lives." The message is clear and just a bit frightening, dear readers: Nintendo wants your life!

Read (.pdf) -- Nintendo.co.jp financial statement

Tags: financial, Kyoto, NCL, Nintendo

Reader Comments (Page 1 of 1)

Ignatius @ Nov 24th 2006 10:41PM

oh noes! I already gave mine! Oh well. *goes back to playing Twilight Princess* ;D

CP @ Nov 24th 2006 10:51PM

tetris claimed too many lives as it was, help us sally struthers!!!!

Duck @ Nov 24th 2006 10:52PM

...Wow. For perspective, how much is Sony worth? And how much did MS pay for Rare?

Doc @ Nov 24th 2006 10:56PM

Wowza. The last figure that I had put them at about 6 billion in total assets. It always cracks me up when fanboys desperately assume that Nintendo will somehow fold up shack with it's console division and go the way of Sega. The fact is, Nintendo is far and away in better financial shape than the game divisions of either Sony or Microsoft.

socrates @ Nov 24th 2006 11:26PM

Then why don't they buy some more decent developers so they can improve their game diversity?

Tom @ Nov 24th 2006 11:31PM

with all that money you think they could have afforded to bring the specs of the wii up to par with the ps3 and xbox 360

Scott @ Nov 24th 2006 11:35PM

Microsoft should buy nintendo

Sedeas @ Nov 24th 2006 11:52PM

False idol, I name thee Nintendo. Wow. Inseparable? Ive never liked how people saw the wii as the bloody second coming, but that line just proves that Nintendo is just as absurd as the other 2.

Crazylink @ Nov 25th 2006 12:03AM

@ Duck - 377 Million

I didn't know that the government takes that much money away...

Zell @ Nov 25th 2006 12:10AM

Scott! Bite yer tongue, lad!

Someone, call a doctor, the boy's gone mad.

Taltos @ Nov 25th 2006 12:19AM

...and if Ninty started buying up developers, people would start complaining that there was no originality anymore.

Third Party developers are quite handy for not being restricted to a certain set of rules. While some aren't motivated enough to try at times, they do help with diversity.

...and rofl at Microsoft buying out Nintendo. XD

Crazylink @ Nov 25th 2006 12:19AM

@ Duck (again) 377 million is how much rare was baught for, not how much Sony is worth.

Zac @ Nov 25th 2006 12:42AM

@Crazylink
The profit is not all that is left after the tax men have taken their share. That is the total amount that is left over after all costs are paid.

For example, say it costs Nintendo $200 to build/market/develop a single Wii, and they sell it for $250, then they have just had $250 of sales but only $50 of profit. While taxes certainly account for a portion of the costs of staying in business, the government does not charge businesses 87% tax. How about a little better reporting Jonti?

And @Tom
The amount of money Nintendo has has nothing to do with the specs of the Wii. Nintendo set out to make a less powerful console with innovative controls and a lower price tag. Microsoft and Sony did the opposite. These are choices any company could make. If Alienware (before Dell bought them) decided to make the ultimate gaming console they could make something more powerful than PS3 and XBox 360 combined, regardless of the amount of money they happen to have on hand. The cost of the console would be through the roof (in my opion the PS3 and 360 prices are already through the roof), but they could do it.

Elrando @ Nov 25th 2006 12:55AM

Why not?
Fucking WoW has already claimed the lives of most of my friends.

Mike @ Nov 25th 2006 12:56AM

Wow, take that times 2, and you've got how much Sony loses this year. http://www.gamespot.com/news/6160667.html

chukz @ Nov 25th 2006 1:17AM

@5 ... your right nintendo's first party devs are not good they should get more...think of why they didn't think of losing RARE as a big deal, what did MS get from it? Perfect Dark? Metroid Prime is a much better game... Nintendo's first party devs are the best of the big 3, it's just what 3rd party devs do... it would be wiser to maybe ask Nintendo to purchase exclusivity rights to certain games, that way more games come to them only. You look at MS and PS3 , what first party devs do they have? Bungie (ie: Halo) and Naughty Dog (ie: jak and daxter/ratchet and clank)... I would suggest those companies to seek better first party devs before Nintendo does...

carg0 @ Nov 25th 2006 1:17AM

Is that building their main HQ in Kyoto? It looks like a prison.

Jonti @ Nov 25th 2006 1:37AM

Zac: I assumed that most people understood the difference between "sales" (which are nice) and "profits" (which are very nice) -- but then, my old man is an accountant... All the same, thanks for your insight.

carg0: That's the one. I've driven past the building in the early hours of the morning and there have still been lights on in most windows. Sometimes you can even see the shadows of NCL employees. Don't they have homes to go to?! Perhaps we should start a 'House the EAD' charity.

dotun.o @ Nov 25th 2006 2:04AM

I believe it was the 2004-2005 fiscal year that only 5 billion Yen in net profit separated Nintendo and Sony (comes to some tens of millions of dollars). Admittedly, part of the reason was because PS made up for Sony's shortcomings in their other electronics sectors or the deifference would be wider, but still, not bad when comparing a games company to a global electronics manufacturer.
Some people, for whatever reason, will simply never like Nintendo. One minute, they say they should diversify; the next, it's, "Mario's in too many different game genres!" If Nintendo changes, they're accused of losing their way; if they stay the same, they're accused of being repetitive and stagnant.
It's funny how some think Nintendo is struggling. Put this in perspective: The GCN is more powerful than the PS2 and far more physically durable (both suggesting the GCN should be more expensive to manufacture), has always sold at a lower price, yet fetches Nintendo profit per unit while Sony takes losses on theirs; and Nintendo's supposed to be the one struggling! ROFL! Not that Sony is in debt as such; they make up for it in strong software sales. But the point here is that Nintendo has NO LOSS to reverse. This is a company that has NEVER posted a loss since the NES. And this is besides the stupid profits they're making on the wunderkind DS.
Like it or love it, Nintendo is the greatest games developer on the planet. The only companies that even compare are stellar 3rd party companies like Capcom.

mocax @ Nov 25th 2006 3:17AM

If Nintendo puts out crappy consoles with kiddy games and still make a hefty profit, they must've done something right.

Sony and Microsoft should be thankful for their profitable divisions (ie. not gaming) to keep their conglomerates afloat.

Of course, the day Nintendo's gaming business become unprofitable, it's the day Nintendo goes out of business.

Nintendo should diversify into profit-making stuff like fast food, candy, sex toys etc

Zixaphir @ Nov 25th 2006 3:56AM

@20./mocax>>
Its funny you should say that... Nintendo has a taxi service and a chain of "Love Hotels" in its history. The more you know~

tab @ Nov 25th 2006 4:25AM

All that money and we got a gamecube with a remote?!! WTF!

Felkster @ Nov 25th 2006 4:31AM

Here is the last fiscal year of each company for reference...
Microsoft: 44 billion revenue, 12.5 billion profit
Sony: 63 billion revenue, 1 billion profit
Nintendo: 4.3 billion revenue, 0.8 billion profit

Roughly, Microsoft has a 28% profit margin, Sony has a 1.5% profit margin, and Nintendo has a 19% profit margin.

Impressive for Nintendo considering it only does games...although it must do that one thing right because it can't rely on other products to prop it up.

Shiv @ Nov 25th 2006 7:29AM

@Felkster

It would be interesting to see those figures for again, but for only the gaming divisions of Sony and Microsoft. People are always saying that the rest of the companies keep the gaming arms alive, but I have never seen actual numbers.

Anyone have the figures?

loc @ Nov 25th 2006 8:36AM

@felkster

Sonys figure is massively distorted because of the battery fiasco. They're taking a huge hit there but are still profitable. The company isnt in any sort of trouble though, because many of its divisions are back after years of lull. eg. digital cameras and tvs

Hey Alex @ Nov 25th 2006 9:53AM

Felkster is correct, but here are some additional statistics.

Microsoft is worth 264 billion
Sony is worth 55 billion

Microsoft has 0 debt
Sony currently has 18 billion in debt

I'm not sure if anyone heard about this yet, but apparently Sony just recalled a number of Cyber-shot digital cameras made between 2003 and 2005. According to the release, Sony does not expect it to affect their bottomline. Of the 1 million cameras sold, approximately 4,000 may need repairs. This same type of recall also happened last year for other model cameras made by Sony. And Sony is also dealing with the massive laptop battery recall.

Gozan @ Nov 25th 2006 11:19AM

@5: The problem with buying developers is that their best guys might decide to leave and the developing studio starts to suck, and Microsoft can only be tricked so many times to buy dud studios.

C.T.H. @ Nov 25th 2006 11:38AM

Sony and Microsoft don't show numbers like this because they're too busy trying to kill each other for marketshare. Nintendo, very deftly, swooped in and ate the remains of the market. Very smart - and it was done in such a way that everything they sell makes money (a unique concept in consoles, I know).

Personally, I think this is Sony's last console - if they can even afford to continue making it next year.

Caylus @ Nov 25th 2006 3:35PM

Don't be alarmist. Nintendo is a business, and not just any business, a japanese business. They all want to own the souls of the consumers. Making a big deal out of it is a waste of energy.

Xaxle @ Nov 25th 2006 5:02PM

@7: They already tried. Nintendo said no.

http://www.gamesindustry.biz/content_page.php?aid=3920

tj @ Nov 25th 2006 5:23PM

^^^
the whole reason Nintendo does so well is because they have more sense that simply "bringing up specs"

that happens naturally. nintendo puts out quality stuff with a very nice profit margin. they have made an art form out of making old tech new. thereby making more money off of that old tech.

all the while, games do not suffer. see the aforementioned "Twilllight Princess"

J @ Nov 25th 2006 7:35PM

Nintendo HQ looks like a hospital.

Tacoman @ Nov 25th 2006 9:27PM

The correct answer is that the Nintendo HQ looks like a mint, because the DS and the first-party games are pretty much permission to print money.

Morpheus_Prime @ Nov 26th 2006 12:29PM

Interestimg story, but realize that the article is citing "total net assets", this obviously includes many assets that are not liquid and not easily converted into real monies; manufacturing plants, patents, etc...

I would be more interested to see numbers for actual cash on hand, R&D monies and capital investment numbers.

Someone commented that Nintendo has a better financial picture than MS Game division, something that is pure folly since you cannot seperate MS in that manner. The Redmond giant is still sitting there with $60 billion in cash, and sits on the cusp of a major cash influx from Office/Vista/Exchange etc, in the next fiscal year. Let's not kid ourselves into the notion that those products and thier respective profits will not continue to subsidize and expand the games and media business for MS.

MP