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Sony (SNE) vs. Nintendo (NTDOY): Who Had the Better Earnings Report?
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Video game and electronics companies Nintendo (NTDOY - Free Report) and Sony recently reported their quarterly earnings. Sony posted better than expected earnings, whereas Nintendo missed expectations due to slow revenue growth from the previous year. Although Nintendo has seen success with its Switch console, there still seems to be a lack of growth in sales and profit compared to Sony. Let’s take a closer look at how the companies have been doing this past year.
A Look at Nintendo
Nintendo reported an operating profit of $274 million for the quarter, which is the most profitable the company has been in a long time. The company reported that a strong driver for Nintendo’s success was its sales of the Switch console, which also increased from the year prior. Nintendo reported that 5.07 million units were sold of the Switch over these past six months which was almost a 4% increase on a year-on-year basis.
At the beginning of the year, the Nintendo Switch set the record as the fastest selling console beating Sony's PlayStation 2 and the Wii. Its ease and convenience made the Switch so popular amongst its users. According to Polygon, it had the best games of 2017 and was sold at an affordable price compared to the PlayStation.
It seems even though Nintendo’s Switch console brought in a solid amount of sales to the company, there still seems to be something that Nintendo is lacking, and the company therefore missed expectations. Investors are wary of the fact that Nintendo projected to sell 20 million units of the Switch in 2018. However, as of right now they have only sold just over 5 million units and the company is already through their first year.
Projected Outlook for Nintendo
In order to exceed expectations, Nintendo will have to reach their projected goal of 20 million sales of the Switch. The upcoming holiday season might prove to be Nintendo’s saving grace in terms of increasing sales and achieving higher profits.
A Look at Sony
Sony reported operating profit of $800 million for the quarter. The company’s motion picture and music sector underperformed this quarter and saw a decline in revenue in both areas. However, similar to Nintendo, the company saw an increase in sales for its PlayStation console and a doubled increase in earnings to $804 million compared to $485 million in this quarter.
According to Engadget, almost 4 million PS4s were sold over the three month period, which was far more than any other quarter in the past. It is apparent that due to the popularity of the console itself and the games available on it, more consumers are inclined to buy it.
Since the company has reported better than expected earnings and have been doing quite well over the year, they decided to raise full-year operating profit forecast by 30%. Part of the reason why is due to the performance of sales of the PlayStation console and games, such as God of War and Red Dead Redemption II.
Projected Outlook for Sony
The reason why Sony does so well in its gaming sector is partially due to its first and third party game releases. Earlier on in the year, the PS4 exclusive Spider Man game sold almost 3.3 million copies. According to Bloomberg, analysts also expect record sales for the newly released Red Dead Redemption II.
It's no surprise that Sony is confident in their work and in its future performance. With this certain confidence in themselves, it creates higher expectations for the upcoming quarter and investors will be looking towards what the company is claiming they will achieve.
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Sony (SNE) vs. Nintendo (NTDOY): Who Had the Better Earnings Report?
Video game and electronics companies Nintendo (NTDOY - Free Report) and Sony recently reported their quarterly earnings. Sony posted better than expected earnings, whereas Nintendo missed expectations due to slow revenue growth from the previous year. Although Nintendo has seen success with its Switch console, there still seems to be a lack of growth in sales and profit compared to Sony. Let’s take a closer look at how the companies have been doing this past year.
A Look at Nintendo
Nintendo reported an operating profit of $274 million for the quarter, which is the most profitable the company has been in a long time. The company reported that a strong driver for Nintendo’s success was its sales of the Switch console, which also increased from the year prior. Nintendo reported that 5.07 million units were sold of the Switch over these past six months which was almost a 4% increase on a year-on-year basis.
At the beginning of the year, the Nintendo Switch set the record as the fastest selling console beating Sony's PlayStation 2 and the Wii. Its ease and convenience made the Switch so popular amongst its users. According to Polygon, it had the best games of 2017 and was sold at an affordable price compared to the PlayStation.
It seems even though Nintendo’s Switch console brought in a solid amount of sales to the company, there still seems to be something that Nintendo is lacking, and the company therefore missed expectations. Investors are wary of the fact that Nintendo projected to sell 20 million units of the Switch in 2018. However, as of right now they have only sold just over 5 million units and the company is already through their first year.
Projected Outlook for Nintendo
In order to exceed expectations, Nintendo will have to reach their projected goal of 20 million sales of the Switch. The upcoming holiday season might prove to be Nintendo’s saving grace in terms of increasing sales and achieving higher profits.
A Look at Sony
Sony reported operating profit of $800 million for the quarter. The company’s motion picture and music sector underperformed this quarter and saw a decline in revenue in both areas. However, similar to Nintendo, the company saw an increase in sales for its PlayStation console and a doubled increase in earnings to $804 million compared to $485 million in this quarter.
According to Engadget, almost 4 million PS4s were sold over the three month period, which was far more than any other quarter in the past. It is apparent that due to the popularity of the console itself and the games available on it, more consumers are inclined to buy it.
Since the company has reported better than expected earnings and have been doing quite well over the year, they decided to raise full-year operating profit forecast by 30%. Part of the reason why is due to the performance of sales of the PlayStation console and games, such as God of War and Red Dead Redemption II.
Projected Outlook for Sony
The reason why Sony does so well in its gaming sector is partially due to its first and third party game releases. Earlier on in the year, the PS4 exclusive Spider Man game sold almost 3.3 million copies. According to Bloomberg, analysts also expect record sales for the newly released Red Dead Redemption II.
It's no surprise that Sony is confident in their work and in its future performance. With this certain confidence in themselves, it creates higher expectations for the upcoming quarter and investors will be looking towards what the company is claiming they will achieve.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>