Nintendo is now one of the ten largest Japanese companies based on market capitalization. Sony (SNE) is not. Nintendo joins a list that includes Toyota (TM), Honda (HMC), and Canon (CAJ).
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 protected].
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