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How has Nintendo been able to survive without lay-offs?

CentralScrutinizer

CentralScrutinizer

Member
After all of the recent news about Sony laying off employees after the PS4 was a success, it got me wondering how Nintendo gets by without laying off developers when sales are low...

Is it corporate culture? Is it company philosophy? I don't understand how a company with a huge success (Sony) is laying off developers when a struggling company (Nintendo) is going about their day as if nothing bad is happening.

Any insight on this would be grateful!
 
Scrawnton said:
After all of the recent news about Sony laying off employees after the PS4 was a success, it got me wondering how Nintendo gets by without laying off developers when sales are low...

Is it corporate culture? Is it company philosophy? I don't understand how a company with a huge success (Sony) is laying off developers when a struggling company (Nintendo) is going about their day as if nothing bad is happening.

Any insight on this would be grateful!
Click to expand...

Straight cash homie.

$9B in cash on the balance sheet.
 
Nintendo still has a bunch of cash reserves. Despite the ps4 being a success, I assume the earnings are chump change compared to how much they're losing from other divisions.
 
Scrawnton said:
After all of the recent news about Sony laying off employees after the PS4 was a success, it got me wondering how Nintendo gets by without laying off developers when sales are low...

Is it corporate culture? Is it company philosophy? I don't understand how a company with a huge success (Sony) is laying off developers when a struggling company (Nintendo) is going about their day as if nothing bad is happening.

Any insight on this would be grateful!
Click to expand...

It might have something to do with this statement being wrong.
 
Scrawnton said:
I don't understand how a company with a huge success (Sony) is laying off developers when a struggling company (Nintendo) is going about their day as if nothing bad is happening.
Click to expand...

They have problems with the Wii U and even with the 3DS to some degree, yet as a company they are still pretty wealthy

Sony is almost the other way round; PS4 is doing fantastic while the company itself had to struggle a lot in the past
 
Scrawnton said:
I don't understand how a company with a huge success (Sony) is laying off developers when a struggling company (Nintendo) is going about their day as if nothing bad is happening.
Click to expand...

I don't think Nintendo's losses in the last two fiscal years have come even close to the losses Sony books in some of its individual divisions multiple years in a row. Nintendo would need these losses for 5-10 years or so to erode even one year of Wii profits.
 
Nintendo gets by with small development teams. They didn't over expand so no need to have a blood letting. They also seem to have a different corporate culture which includes retaining and developing their employees.
 
I think it happens you just don't hear about it. My company, not a game company mind you, laid off a 1000 people last month and haven't seen a much fuss about it on the internet. Sony cuts 10 people from a studio and the sky is falling.
 
Ha, I think that is their problem. They don't have a lot of people working on a ton of games. It seems the same group, same games, same stuff. But that's just my perception, I love their publishing house though since my 3DS gets awesome games.
 
Nintendo is the world's most profitable company per employee. Each employee accounts for something like $2 million dollars profit.
At least, they were at one point.

I don't think people realize just how small Nintendo is.
 
Because Nintendo hasn't been in the shit for a 5-year period at all like Sony etc. They also didn't expand enough at all when they should have to support two 3d game platforms, but maybes thats for the better now.

Don't worry though, the time for Nintendo contraction will come hurtling up soon enough and it won't be pretty. The "Nintendo is rich as balls and doesn't afraid of anything" defence isn't going to hold up if their marketshare continues to dwindle with no new huge audience injection.
 
Buried in reams of financial data is the revelation that Nintendo have 812.8 billion Yen (£6.7/$10.5 billion) in the bank - enough for it to take a 20 billion Yen loss (£163/$257 million) every year until 2052. Then there's almost 469 billion Yen (£3.8/$6.0 billion) held in premises, equipment and investments. When that runs out - we're in the year 2075 by this point - they've got some of the most valuable intellectual property in gaming to sell off before the company goes out of business."
Click to expand...

http://www.gamesradar.com/nintendo-doomed-not-likely-just-take-look-how-much-money-its-got-bank/
 
I'm sure there's dozens of reasons, but part of it is that Nintendo has expanded in very small chunks. They're not actually a huge company, employee-wise, so they've avoided the boom-bust hiring cycle.
 
RMI said:
maybe they're not as doomed as everyone thinks?
Click to expand...
Exactly. So many consoles over the years, so many predictions of doom. Nintendo can pull out of this if they choose to. Will they? Who knows? Nintendo can be rather stubborn.
 
Maybe I should have clarified, Nintendo has been losing money year over year, but hasn't the Playstation division of Sony been the best performing part of Sony as a whole? If it's the most profitable, why hit it with layoffs while some of those teams are still developing announced games?

Yes Sony is struggling, but Playstation had been doing well.
 
We didn't hear about layoffs at SCE Japan and they aparently had a huge restructuration a few years ago.

Gaming companies don't fire people in Japan or, most likely, we don't hear about that.
 
To add to what everyone else has been saying there's also the fact that Nintendo is a smaller company Employee count wise. They don't employee anywhere near the number of people that Sony does and their income per employee is insanely high. When you don't bloat out the number of employees you have, you don't have to start firing people when things get tricky.
 
Man-is-Obsolete said:
I think it happens you just don't hear about it. My company, not a game company mind you, laid off a 1000 people last month and haven't seen a much fuss about it on the internet. Sony cuts 10 people from a studio and the sky is falling.
Click to expand...

Well in that case Nintendo should definitely let Sony know their secret of laying off people quietly. It's just not fair that Nintendo gets to cut people off from their studios without fuss and poor Sony has to suffer.
 
Pie and Beans said:
Because Nintendo hasn't been in the shit for a 5-year period at all like Sony etc. They also didn't expand enough at all when they should have to support two 3d game platforms, but maybes thats for the better now.

Don't worry though, the time for Nintendo contraction will come hurtling up soon enough and it won't be pretty. The "Nintendo is rich as balls and doesn't afraid of anything" defence isn't going to hold up if their marketshare continues to dwindle with no new huge audience injection.
Click to expand...

I really doubt their going to start contracting soon when it seems like they're spending what money they have on expanding.
 
Scrawnton said:
Maybe I should have clarified, Nintendo has been losing money year over year, but hasn't the Playstation division of Sony been the best performing part of Sony as a whole? If it's the most profitable, why hit it with layoffs while some of those teams are still developing announced games?

Yes Sony is struggling, but Playstation had been doing well.
Click to expand...

You're making an assumption that all layoffs are bad and that retaining all employees is always good.

That's unrealistic and frankly naive.
 
Scrawnton said:
Maybe I should have clarified, Nintendo has been losing money year over year, but hasn't the Playstation division of Sony been the best performing part of Sony as a whole? If it's the most profitable, why hit it with layoffs while some of those teams are still developing announced games?
Click to expand...

"PlayStation division" =/= every Sony studio.
 
Man-is-Obsolete said:
I think it happens you just don't hear about it. My company, not a game company mind you, laid off a 1000 people last month and haven't seen a much fuss about it on the internet. Sony cuts 10 people from a studio and the sky is falling.
Click to expand...
We would know if Nintendo was actively laying off people. That's the kind of news journalists live for.

As for the reason, it's simple. Despite what people think, Nintendo does know how to run a company. Can't say the same for most game companies who think 900 people need to make a game at a time.
 
Man-is-Obsolete said:
I think it happens you just don't hear about it. My company, not a game company mind you, laid off a 1000 people last month and haven't seen a much fuss about it on the internet. Sony cuts 10 people from a studio and the sky is falling.
Click to expand...

Iwata has specifically said on at least two occasions that he is against laying off staff in that fashion.
 
Scrawnton said:
Maybe I should have clarified, Nintendo has been losing money year over year, but hasn't the Playstation division of Sony been the best performing part of Sony as a whole? If it's the most profitable, why hit it with layoffs while some of those teams are still developing announced games?

Yes Sony is struggling, but Playstation had been doing well.
Click to expand...

It isnt the most profitable and too many money lost in the past.
 
Sony isn't just a game company. They're entertainment arm in general is doing pretty poorly. PS4 may be selling great, but the rest of it (TVs, PCs, Laptops, smartphones, etc) aren't doing so hot. When that part of the company is in trouble, layoffs happen everywhere.

Nintendo is only games. They hit a road bump with the Wii U, but they have been doing fine the past ten years. Sony has not.
 
Scrawnton said:
Maybe I should have clarified, Nintendo has been losing money year over year
Click to expand...

Lower profit year over year != losing money. They are still a profitable company up until, like, 6 months ago
On the contrary, MS and Sony were operating in the red as a company for the better part of a decade.
 
Well it's helps that Nintendo expense are small and that they are a smaller company compare to Sony.

It also helps that Nintendo core market is just Video games which have all generated a profit until the Wii U, whereas Sony does more than just video game hence their expense are higher and have more dead weight to throw overboard their sinking ship.

Jaded Alyx said:
Execs taking pay-cuts.
Click to expand...

This.

Red Rudolph said:
Tons of money in the bank?
Click to expand...

And this
 
Scrawnton said:
Maybe I should have clarified, Nintendo has been losing money year over year, but hasn't the Playstation division of Sony been the best performing part of Sony as a whole? If it's the most profitable, why hit it with layoffs while some of those teams are still developing announced games?

Yes Sony is struggling, but Playstation had been doing well.
Click to expand...
Sony as a corporation has been losing money and they have to cut costs. They recently cut out Vaio, spun off their TV business, and doing many more things. While their gaming is starting to do well again, if there are ways to cut costs while restructuring, they might as well. It's not just cutting the losses, but also making anything you can around the company more efficient.
 
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