After a long hiatus I have once again been induced to write an update on the financial state of the video game industry. My plan is to divide this write up into two main “chapters.” This first one will cover the “hard” numbers: hardware unit sales and earnings reports. The second will cover the “soft” topic of average player profiles, including online connectivity, hours per day, tie ratio, etc. This section promises to be densely packed with numbers, but it should not require an MBA or a degree in statistics (at least it shouldn’t, since I have neither). Please note, I will cover software sales with the “soft” numbers, since it is not easy (possible?)… You lost me.
As an investor, it is prudent to invest in a number of different instruments (stocks, bonds) and markets (the United States, emerging Asia) because the more diversity in a portfolio the more bad news it can withstand before being severely impaired. For examples, stocks do well during good economic times, while the more stable bonds will likely outperform in poor times. Holding both allows you to make money when all is right with the world and preserve much of your money should things start to turn south. However, in times of crisis, correlations go to one. This statement has an obvious truth to it, since, as we just witnessed, almost every market in the world goes down together when things get bad enough; almost nothing (most US government bonds performed well, but that is about it) escapes unscathed.… Zero Escape: Nine Hours, Nine Authors, Nine Articles
There has been a lot of good sales news for the industry over the past month. Enough numbers have been released that PR people from all three console manufacturers are able to claim some victory. We have all grown accustomed to hearing that Nintendo’s grandparent-friendly hardware is setting the world ablaze, but recent information has shown that its competitors may be gearing up to offer a viable challenge. The biggest headline probably has to be the fact that Nintendo DS sales set the record for most systems ever purchased in a single week with 653,000. This, combined with 350,000 Wiis sold during the same period adds up to…a lot of stuff sold by Nintendo during Thanksgiving week.… [put on your VR headset now]
Nintendo’s recent ascension to become the second largest company in Japan has been making news on a few sites which track the business aspect of video games. While it is true that a company’s market capitalization (basically a measure of what the stock market thinks a company is worth) has grown by leaps and bounds of late (as will happen when the price shoots up as much as Nintendo’s has) some of the underlying financial numbers are even more fascinating than the headlines.
By market cap, Nintendo is substantially larger than Sony (Nintendo is worth about $75 billion, to Sony’s $47 billion). In truth, this metric is only one way to judge the size of a company.… I’m gonna take you for a read.
Market capitalization is a measure of what investors think a company is worth, so it basically represents size. In order to get a little perspective on the relative size of some of the companies with which we, as gamers, are most familiar, I have thrown together the below chart.
As with all thrown together financial charts it has its shortcomings. Private companies, such as Bioware, SNK Playmore and Treasure cannot be included since they are not required to reveal their size and there is no market to determine it. Also, (and this may come as a shock to some of you) several of these companies are Japanese. This means that in addition to their market cap changing day to day based on price changes, when expressed in US Dollars, they change with foreign exchange rates as well.… Xenosaga 2: Jenseits von Gut und Pöst