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[AntMurda]

I've always been baffled by the overall employee count that Nintendo has maintained every year. Not because they are particularly a small company, but because they are extremely successful and their numbers don't ever seem to grow in accordance to their success. What exactly did NCL invest in with their massive hardware and software sales during the Wii and NDS era? We saw SCE (SIE) grow their resources exponentially during the PS1 and PS2/PSP era, but it just doesn't seem like the same can be said about Nintendo.

Doing a quick revenue / employee account from other successful companies with a comparable structure of publishing and development looks like this:

(year revenue versus employee count)

3,376,345,151.41 / 10,670 UBISOFT (based off 2016 data)
4,515,000,000.00 / 8,400 ELECTRONIC ARTS (based off 2015 data)
4,688,194,761.09 / 5,064 NINTENDO (based off 2016 data)
1,560,380,329.00 / 3,864 SQUARE-ENIX (based off 2015 data)
1,100,000,000.00 / 4,700 BLIZZARD ENTERTAINMENT (based off 2015 data)
0,240,701,909.00 / 2,601 CAPCOM (based off 2014 data)

I couldn't find Sony Interactive Entertainment data to do an even fairer comparison. But as it stands, it just seems like the company never grew fast enough. It definitely never embraced the global expansion that Sony and Ubisoft have mastered.

Edit - Additional NCL Info

2,200 Non-Consolidated Employees (Nintendo)
5,064 Consolidated Employees (NCL, NOA, NOE, NHK, NOK, NST, NTD, NNSD, NERD, NDCUBE, iQUE, Retro Studios, Monolith Soft, NES Merchandising, etc.)

Affiliate Employees not counted (The Pokemon Company, Genius Sonority, PUX, SRD, HAL, Intelligent Systems, Creatures Inc.) Maybe 400 people at best.

 

[Skittzo0413]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

 

[massoluk]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

They invest a shit tons of their money in the new office buildings.

 

[Kysen]

If anything it seems like they scaled back and went more insular.

 

[notaskwid]

The old uncle scrooge tactic, you, your secretary, your nephews and a big pile of cash.

 

[OrionsNebula]

Wow I had no idea that the employee counts were so low.

Would you mind sharing your sources for the data you found. I would just be curious in looking through this more. Specifically I would be interested in noting how many of the employees are full time and consistently staffed vs those who are just part-time or contractually hired.

Edit: Also, why does EA make so much more money than Ubisoft? I thought these companies were neck and neck pretty much...

 

[GhostTrick]

Small and dumb. Instead of expanding and instead of trying to understand their own values and appeal, they just sat down like idiots.

 

[disco]

From those numbers the data suggests Nintendo makes the most money per employee? Surely that yield is the best measure any responsible business should look towards for success?

 

[NOLA_Gaffer]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

R&D for the NX, assumedly.

 

[Skittzo0413]

R&D for the NX, assumedly.

This money rolled on pre-Wii U. We had all those articles saying Nintendo had like $10 billion in cash so they could withstand console failures till like 2050. Obviously they spent some of their profits but I feel like it's been confirmed that a lot of it just sat around for years.

 

[KingBroly]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

They built a new office building...that's about it, I think.

I'd want to expand Retro and establish a European development (Small at first, grow it over time), honestly.

 

[AntMurda]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

The most we got was a new R&D building to accommodate their slowly expanding developers in Kyoto. Also some small secret company was purchased allegedly. Iwata flirted with the idea of a notable M&A, but it never happened.

 

[zsidane]

It should also be noted that despite having negative results in more than a fiscal year and despite shareholders call for cost cobtrol by laying off staff, management (and Iwata in particular) rejected the idea and assured that their staff are a major asset.

Nintendo is also the kind of company that like to take the time when they grow and have a tough selection process.

Can we have the headcount for let's say the last 10 years to see if they did grow or not?

 

[zsidane]

They built a new office building...that's about it, I think.

I'd want to expand Retro and establish a European development (Small at first, grow it over time), honestly.

In Europe they set NERD in Paris. Iwata even did a "Iwata asks" in order to introduces it and attract some talent. They mainly do R&D.

 

[explodet]

Edit: Also, why does EA make so much more money than Ubisoft? I thought these companies were neck and neck pretty much...

My guess is it has something to do with Madden and FIFA being guaranteed money.
FIFA's practically got its own black market.

 

[KojiKnight]

Small and dumb. Instead of expanding and instead of trying to understand their own values and appeal, they just sat down like idiots.

Meanwhile Ubisoft expanded out, invested in tons of yearly properties, and are being bought out by an even more soulless mega Corp... So you know... Ifs and buts and what not.

 

[KingBroly]

In Europe they set NERD in Paris. Iwata even did a "Iwata asks" in order to introduces it and attract some talent. They mainly do R&D.

Yeah, I know they have NERD, but there needs to be a development team/house in Europe.

 

[lensoftruth]

Surely you should be more baffled at the employee count of others, they're massively in-efficient.

 

[Mashing]

Add more employees and divisions and your operating expenses goes up. Employee salaries are the largest proportion of most corporations budgets.

 

[shaki123]

Maybe they are pretty much satisfied with their employee count. Nintendo gets the best out of its employees is my guess.

 

[jblank83]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

Built a new headquarters in Kyoto
Integrated their console and handheld teams into one team
Reorganized the company's management structure
Investigated and invested in opportunities outside their traditional avenues (eg theme park)
Began their mobile efforts
Hardware R&D

I believe they also went on a hiring campaign sometime a few years back, but I'm unable to find an article to support that.

So, yes, they did. A lot of what they've done is organizational and internal. However a lot of this is not new news and was covered fairly extensively in numerous places over the last several years.

 

[Matt]

For a while Nintendo had one of the highest per-employee profit rates in the world.

 

[The Boat]

Their strategy has been about sustainable and moderate expansion as far as I can see, can't say I disagree with it.
They've been investing a lot lately though.

 

[jblank83]

Can we have the headcount for let's say the last 10 years to see if they did grow or not?

Not very familiar with this source, tbh.

 

[Orniletter]

Ubisoft is a disaster waiting to happen, they need one or two years of unsuccessful releases and the company would be in danger with their extremely high burnrate.

EA controls quite a few of the biggest IPs in gaming.

Nintendo's size is fine. SCE is "just" 8000 people and they publish significantly fewer games than Nintendo.

What the "small" 5000 doesn't tell you is how many third party developers they give work to.

 

[pastrami]

Keep in mind that most of Nintendo's revenue comes from hardware, so comparing them with primarily software companies is not a 1-to-1 comparison.

 

[Qwark]

Dang, kind of surprised by how small SE and especially Capcom are. I guess that explains why Capcom has only released a handful of games this gen.

 

[Matt]

Keep in mind that most of Nintendo's revenue comes from hardware, so comparing them with primarily software companies is not a 1-to-1 comparison.

Umm, what?

That's not true.

 

[Astral Dog]

That is a bad or a good thing? 😕

 

[Kouriozan]

Nintendo might not hire a tons but they also almost never fire them.

 

[AntMurda]

I believe they also went on a hiring campaign sometime a few years back, but I'm unable to find an article to support that.

The Japanese website keeps track of how many college graduates are hired each year for Clerical/Business and R&D. There are like two years where they doubled their yearly intakes. A slight spike really, nothing earth shattering. Though technically, they also hire mid-career employees and don't share those numbers.

What the "small" 5000 doesn't tell you is how many third party developers they give work to.

Most of the above companies do significant outsourcing / contracting as well though.

 

[Neospartan]

I don't know which causes which, but it may have something to do with how hard it is to actually get a job at Nintendo.

Have you seen their process? It's HARD, like, you might as well be better off trying to be an astronaut at NASA. I don't even know how hyperbolic that statement is

Spoiler

if it even is.

 

[pastrami]

Umm, what?

That's not true.

So when Nintendo wrote that they earned 276 billion yen in 2016 from hardware, out of 504 billion yen in revenue, they were lying? Or am I reading their financial statement wrong?

Edit: Earnings release from here: https://www.nintendo.co.jp/ir/en/

 

[zsidane]

Not very familiar with this source, tbh.

Thanks!
They grew about 15%. Nothing massive but also not insignificant.
I wish they expand their euro operations beyond NERD and add one or two studios in US & Canada.

 

[aBarreras]

Meanwhile Ubisoft expanded out, invested in tons of yearly properties, and are being bought out by an even more soulless mega Corp... So you know... Ifs and buts and what not.

people forget that nintendo bought all the yamaguchi shares from his sons so nobody could take over them, but you know! nintendo is doomed

 

[bachikarn]

To me, this is Iwata's biggest failure. He had massive success with the Wii and DS (which they admitted that they didn't expect), but did not do much with the profits to expand the companies scope and diversity. They absolutely should have been hiring more people to deal with HS development and created more companies (or more aggressively funded other projects). Then maybe they could have maintained a decent software output. They also needed to invest more research money into HD development (and process improvements in generally really). They were blindsided by HD development despite the rest of industry already going through it years before.

 

[Nightbird]

Have you seen their process? It's HARD, like, you might as well be better off trying to be an astronaut at NASA. I don't even know how hyperbolic that statement is

Spoiler

if it even is.

Yep, being hired at Nintendo requires an insane amount of work.

For everyone who's curious about this:


http://www.bizjapanese.com/blog/7-s...endo-a-guide-to-nintendo-s-recruitment-system

 

[Skittzo0413]

Built a new headquarters in Kyoto
Integrated their console and handheld teams into one team
Reorganized the company's management structure
Investigated and invested in opportunities outside their traditional avenues (eg theme park)
Began their mobile efforts
Hardware R&D

I believe they also went on a hiring campaign sometime a few years back, but I'm unable to find an article to support that.

So, yes, they did. A lot of what they've done is organizational and internal. However a lot of this is not new news and was covered fairly extensively in numerous places over the last several years.

Most of that (besides I guess the Kyoto HQ) has been in the past 2-3 years, no? I thought the question in the OP was more referring to the massive amount of money they made in the Wii/DS days, a lot of which was seemingly not invested in much of anything around that time.

It's definitely a fine strategy to have a lot of liquidity that can be used like they're using it now- to diversify their business efforts in order to survive when their primary business takes a downturn- but I personally think this is a process they should've begun closer to 2008 when they were pulling in record profits.

Typically investors expect businesses to grow, and there was no better time to start doing that on a larger scale during the heights of the Wii/DS era.

 

[randomengine]

What should blow all out minds - They also make 2 different hardware in-house in addition to all the software they make. While everyone else on that list does not.

 

[MrT-Tar]

Did they invest in anything with those absurd profits? Didn't they just let the cash sit around in their massive warchest? Which to be honest was a pretty poor decision in hindsight (probably poor at the time too).

Since the launch of the Wii, iirc they bought 90-something% of Monolith, bought ND Cube, set up NERD, and built their new HQ buildings.

They definitely should have invested more though, Cing should've been a cheap purchase before going under, same with Eurocom

 

[bachikarn]

Yep, being hired at Nintendo requires an insane amount of work.

For everyone who's curious about this:


http://www.bizjapanese.com/blog/7-s...endo-a-guide-to-nintendo-s-recruitment-system

Lol damn.

 

[jblank83]

Most of that (besides I guess the Kyoto HQ) has been in the past 2-3 years, no? I thought the question in the OP was more referring to the massive amount of money they made in the Wii/DS days, a lot of which was seemingly not invested in much of anything.

The new headquarters broke ground in 2011. R&D for the next console started shortly after the Wii U (possibly before), as is normal for every console. The handheld/console teams were integrated in 2013.

The Wii/DS went out of production in 2013. Ergo this is the response to and investment of the Wii/DS results.

Typically investors expect businesses to grow, and there was no better time to start doing that on a larger scale during the heights of the Wii/DS era.

The previous chart shows growth during that time.

It's fine to argue the organizational changes should have happened sooner, but I'm sure while Wii/DS were selling at their best no one at Nintendo was thinking "well, we should change everything." It's arguable they should have identified the casual market shift sooner, however the topic at hand is "what did they do with the profits". The answer is that they invested them, reorganized the company to address some of the problems identified during the end of the Wii/DS era, etc.

 

[E-phonk]

Does their employee count include the external studio's they own like monolith soft?
Nintendo also often uses external studio's to create assets etc btw

 

[Skittzo0413]

The new headquarters broke ground in 2011. R&D for the next console started shortly after the Wii U (possibly before), as is normal for every console. The handheld/console teams were integrated in 2013.

The Wii/DS went out of production in 2013. Ergo this is the response to and investment of the Wii/DS results.

So you're saying that (besides the new HQ) they decided to start really utilizing their Wii era profits after the Wii went out of production? Obviously they spent some of it on Wii U/3DS R&D but all reports from then indicated that there were still sitting on billions in cash.

That probably isn't the best way to do business- it seems a bit too slow and reactionary, rather than forward thinking.

 

[GabeTheGrouch76]

Built a new headquarters in Kyoto
Integrated their console and handheld teams into one team
Reorganized the company's management structure
Investigated and invested in opportunities outside their traditional avenues (eg theme park)
Began their mobile efforts
Hardware R&D

I believe they also went on a hiring campaign sometime a few years back, but I'm unable to find an article to support that.

So, yes, they did. A lot of what they've done is organizational and internal. However a lot of this is not new news and was covered fairly extensively in numerous places over the last several years.

Wasn't most (if not all of this) done during their very recent restructure? Seems more of a case in which they only engaged in these actions when the tides started taking a turn for the worst, following their successful Wii/DS era.

EDIT: I see this question was already asked and answered, so you can ignore this if you want.

 

[Eolz]

It's actually a good thing for them to stay around this level, no need to be bloated for no reason.
That said, they should expand NOE and NOA back to reasonable levels for some services, and maybe make an acquisition or two.

 

[RedSwirl]

It should also be noted that despite having negative results in more than a fiscal year and despite shareholders call for cost cobtrol by laying off staff, management (and Iwata in particular) rejected the idea and assured that their staff are a major asset.

Nintendo is also the kind of company that like to take the time when they grow and have a tough selection process.

Can we have the headcount for let's say the last 10 years to see if they did grow or not?

And Iwata took a 50% pay cut to keep from having to lay anybody off, afraid it would lower morale.

 

[GabeTheGrouch76]

And Iwata took a 50% pay cut to keep from having to lay anybody off, afraid it would lower morale.

IIRC, some of the other top executives followed his example and took 20%-30% pay cuts as well.

 

[bomblord1]

Fun fact: Microsoft spends several times more in a year than Nintendo's net worth.

 

[georly]

Umm, what?

That's not true.

It's like 40% of their profits (or maybe it's revenue), yeah. IIRC, they're basically 40% hardware, 40% software, 10% amiibo, and 10% other merch/licensing, on average.

So when Nintendo wrote that they earned 276 billion yen in 2016 from hardware, out of 504 billion yen in revenue, they were lying? Or am I reading their financial statement wrong?

Edit: Earnings release from here: https://www.nintendo.co.jp/ir/en/

Exactly.