Nintendo’s Wii and DS game platforms have obviously done much better that Toyota’s Playstation 3, the the phenomenal growth in the value of the company’s shares, now $53 billion, goes well beyond that.
A look at Nintendo’s most recent financial report show that it is simply a game company. But, its revenue, at 996,534 million yen, grew 90% over the same quarter in the previous year. Operating income grew 150% to 226,024 million yen.
Sony is the larger more diversified company, and that says a great deal about the premium that the market puts on growth. For its last fiscal year, Sony has revenue of $8,295 billion yen. But, its operating income margin was less than 1%.
Sony’s large consumer electronics and studio businesses are clearly given a low valuation by shareholders, and it problems in the video game markets pull down the valuation even further. But, with all of that, the company’s share price is up 25% in the last year.
But, Nintendo’s is up 130%.
Douglas A. McIntyre can be reached at email@example.com.