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Nintendo has been historically notorious for making more money per employee than most companies [0]. 10% is a step in the right direction, but it should definit

Nintendo has been historically notorious for making more money per employee than most companies [0]. 10% is a step in the right direction, but it should definitely be more. [0] https://www.ft.com/content/9d9624a4-8341-11dd-907e-000077b07658 https://www.ft.com/content/9d9624a4-8341-11dd-907e-000077b07...

DiggyJohnson 4y ago
Couldn’t get archive.org to get the content for your article, unfortunately. Anyways, I’m not sure that this is the right metric to criticize a company, at least not without corroborating metrics. Two main questions I’d be interested before casting judgement are: What did they do with the excess monies they had from their large profit:compensation ratio? Were they paying above market rate for their industry? I do see how my response betrays my assumption that profits do not always need to be shared with the labor pool that generated/oversaw the period of profits. That’s something I’m chewing on, personally.
- Aeolun 4y ago
  Mostly, I believe Nintendo has about 20 years (not sure of the exact amount, a ridiculous number anyway) of operating costs in savings. If they stopped selling anything tomorrow they’d still be good for a few decades.
  - kranke155 4y ago
    20 years in savings is astonishing.
    - tobyjsullivan 4y ago
      A human with 20 years of savings would just be considered financially sound and (barely) safe to retire. Yet a business with over 6,000 employees with the same financial security is exceptional. Perhaps there’s something to learn here.
      - Dylan16807 4y ago
        Companies don't retire so this whole comparison doesn't make sense.
      - jasonshen 4y ago
        Businesses are not people who get old, can't keep working, and retire. Businesses can borrow significant sums of money, issue stock, come up with a new product that can transform their revenues overnight, etc. I know what you're trying to say but this isn't a great comparison.
      - underyx 4y ago
        That a huge company can be more confident in its future cash flow than a single human.
        deleted 4y ago
        [deleted]
  - bityard 4y ago
    That sounds suspiciously like something a 134 year-old company would do to ensure its survival over the long term.
    - transcriptase 4y ago
      It’s a shame GE hasn’t managed to follow suit after 130 years.
      - red-iron-pine 4y ago
        Japan believes in lifetime employment and is thinking about what you'll be doing there in 20 years. GE focuses on the quarter and DGAF if you're there in 2 years; ditto for technical initiatives, leadership, legal compliance, you name it.
  - j-bos 4y ago
    Isn't that their normal cycle though? Produce a console that prints money, produce a console that bleeds money, repeat. Seems like their cash reserves keep them nimble enough to experiment and remain independent.
    - dastbe 4y ago
      i don’t think they’ve had a console that bleeds money in the sense that playstations/xboxes have, though they’ve had quite a few flops over the past 20 years
      - vikingerik 4y ago
        Their only flop in the past 20 years was the Wii U. (The Gamecube is now over 20 years old.)
        rrdharan 4y ago
        Previous poster was probably assuming, like I did, that the Virtual Boy was less than 20 years ago…
        deafpolygon 4y ago
        It wasn't a flop in my childhood. :'(
    - Zircom 4y ago
      I don't think bleeding money is accurate for Nintendo. They are in the habitat of iterating on their previous consoles instead of just throwing everything out the window each time like some other companies, so even with their consoles that flopped it's not like the R&D money is just down the drain, and I'm sure labor-and-materials-wise they're making some kind of margin on the hardware itself.
  - zorked 4y ago
    Given the cycles for Nintendo consoles this sounds pretty reasonable particularly now that they have a single line of consoles with the Switch instead of console + handheld. It's not like the Wii U sold a lot. Who knows if the Switch replacement won't be a Wii U. Who knows if there won't be two Wii Us in a row.
- daemoens 4y ago
  https://archive.is/5e3Ts https://archive.is/5e3Ts
- 8note 4y ago
  It's Nintendo. They're taking advantage that people that like the brand, and want to be able to say that they helped make Mario or Zelda. You can pay disneyland ride designers less because there's status involved with designing Disneyland rides
fomine3 4y ago
(2008). It was the year
diceduckmonk 4y ago
Maybe this operating model is why they haven’t had to have layoffs and can weather the storm. In Japan, people value job security over maximizing expected value of compensation.
- kevviiinn 4y ago
  The storm of wanting to keep their obscenely large profits at the same scale? I mean, that's what the other big tech companies who are laying off employees are doing
- kurikuri 4y ago
  >In Japan, people value job security over maximizing expected value of compensation. I don’t think that is it. In Japan, the way of maximizing compensation is by staying in your job as long as possible, because the pay is strongly tied to seniority.
  - alwayslikethis 4y ago
    On the whole, this is a rather more "equal" process. The top managers don't get paid the huge amounts they do in the US. However this also leads to all the unproductive situations you can imagine, with seniors running the company into the ground and the juniors not being able to do anything about it.
    - papito 4y ago
      It always fascinates me how Japan is full of anachronistic, counter-productive traditions and is also one of the most advanced countries in the world at the same time. The whole place is full of contradictions. If everyone works absolutely insane hours and has no life, one would imagine the life expectancy would be shot as well, just due to the stress. Someone explain this to me.
      - bobthepanda 4y ago
        Japan was one of the most advanced countries in the world. The country has been stagnating for quite a while. South Korea and Taiwan have since eclipsed it by PPP-adjusted metrics per person. (Japanese make higher paper incomes than South Koreans and Taiwanese, but they also generally pay more for imports due to tariffs.)
moneywoes 4y ago
Even compared to tech giants?
- Retric 4y ago
  Yes. In 2022 Google at 282 billion / 190,234 employees = 1.48 million per employee. In 2022 Nintendo was 13.923 billion / 7,136 employees = 1.85 million per employee. In theory Google might be more consistent, but the article was written in 2008 when Nintendo was 1.6m per employee in 2008 beating Goldman Sacks at 1.2m and Google at 600k.
nonethewiser 4y ago
> Nintendo has been historically notorious for making more money per employee than most companies That is in no way a bad thing.
- m463 4y ago
  Japanese firms also have lower salaries.
- Wolfenstein98k 4y ago
  Agree with this. The Marxist* notion that workers should get salaries commensurate to net profit of the company is weird and purely subjective. Why should they? There is an argument that wages should be tied to productivity, but that would lead to internal inequalities and would be very subjective as many worker outputs are hard to measure. The current employer-employee "bargain" is for the worker to get a steady fixed income, independent of output or consistency, in exchange for the security that provides. Self-employment is a good way to take on more risk for (potentially) higher pay. Before anyone counters with "but what about unskilled workers who can't self-employ", I would return the question - yes, what about them? I see no particular reason why profit of a company must be shared with its workers, most of whom did not outlay the initial capital (or subsequent funding rounds) that built the company. *Maybe there's a better word for this or an earlier progenitor of this idea but I think this captures it well enough for this comment.
  - kelseyfrog 4y ago
    Can you cite the section of Capital you're arguing against? I want to understand both sides.
  - kergonath 4y ago
    > The Marxist* notion that workers should get salaries commensurate to net profit of the company is weird and purely subjective. Is that actually a thing? I read the Capital quite a long time ago but I don’t think Marx advocated for any of that. He wrote about workers’ ownership of the means of production and how they should be the ones deciding what to do with the results of their labour. In a market economy, that would lead to workers-owned companies, so the people deciding salaries and compensations would be the employees. How revenue is split is still a strategic decision: you still need war chests for difficult times, investments, etc. You’d hope that the pay would be more fair, but it’s a consequence of the employees taking decisions, rather something postulated a priori. > Self-employment is a good way to take on more risk for (potentially) higher pay. Indeed. And some people really like it, which is great. But you obviously cannot do the same thing as a one-man shop than as a large company. A working economy needs both, otherwise the plucky independents quickly get out of things like manufactured goods and food. Also, for some people stability is more important, and sometimes both sets of people are the same at different points in their lives. It is not really a good argument against fair wages. > Before anyone counters with "but what about unskilled workers who can't self-employ", I would return the question - yes, what about them? This sounds fine and dandy until they take a rifle and get off you what they need to survive. The simple truth is that people are not going to just starve because you think they don’t deserve a living. > I see no particular reason why profit of a company must be shared with its workers, most of whom did not outlay the initial capital (or subsequent funding rounds) that built the company. OTOH, capital itself does not build anything or produce anything. You need people to actually do the work at some point, and they are at least as necessary and important as the rich dude who signed a check at the beginning. Never mind the fact that “investors” who get rich off the secondary market do not bring anything to the company of which they trade the shares. I do it as well at my (very modest) level, but I don’t pretend I am doing anything useful by buying and selling stock.

DiggyJohnson 4y ago

Couldn’t get archive.org to get the content for your article, unfortunately. Anyways, I’m not sure that this is the right metric to criticize a company, at least not without corroborating metrics. Two main questions I’d be interested before casting judgement are: What did they do with the excess monies they had from their large profit:compensation ratio? Were they paying above market rate for their industry? I do see how my response betrays my assumption that profits do not always need to be shared with the labor pool that generated/oversaw the period of profits. That’s something I’m chewing on, personally.

Aeolun 4y ago
Mostly, I believe Nintendo has about 20 years (not sure of the exact amount, a ridiculous number anyway) of operating costs in savings. If they stopped selling anything tomorrow they’d still be good for a few decades.
- kranke155 4y ago
  20 years in savings is astonishing.
  - tobyjsullivan 4y ago
    A human with 20 years of savings would just be considered financially sound and (barely) safe to retire. Yet a business with over 6,000 employees with the same financial security is exceptional. Perhaps there’s something to learn here.
    - Dylan16807 4y ago
      Companies don't retire so this whole comparison doesn't make sense.
    - jasonshen 4y ago
      Businesses are not people who get old, can't keep working, and retire. Businesses can borrow significant sums of money, issue stock, come up with a new product that can transform their revenues overnight, etc. I know what you're trying to say but this isn't a great comparison.
    - underyx 4y ago
      That a huge company can be more confident in its future cash flow than a single human.
      - deleted 4y ago
        [deleted]
- bityard 4y ago
  That sounds suspiciously like something a 134 year-old company would do to ensure its survival over the long term.
  - transcriptase 4y ago
    It’s a shame GE hasn’t managed to follow suit after 130 years.
    - red-iron-pine 4y ago
      Japan believes in lifetime employment and is thinking about what you'll be doing there in 20 years. GE focuses on the quarter and DGAF if you're there in 2 years; ditto for technical initiatives, leadership, legal compliance, you name it.
- j-bos 4y ago
  Isn't that their normal cycle though? Produce a console that prints money, produce a console that bleeds money, repeat. Seems like their cash reserves keep them nimble enough to experiment and remain independent.
  - dastbe 4y ago
    i don’t think they’ve had a console that bleeds money in the sense that playstations/xboxes have, though they’ve had quite a few flops over the past 20 years
    - vikingerik 4y ago
      Their only flop in the past 20 years was the Wii U. (The Gamecube is now over 20 years old.)
      - rrdharan 4y ago
        Previous poster was probably assuming, like I did, that the Virtual Boy was less than 20 years ago…
        deafpolygon 4y ago
        It wasn't a flop in my childhood. :'(
  - Zircom 4y ago
    I don't think bleeding money is accurate for Nintendo. They are in the habitat of iterating on their previous consoles instead of just throwing everything out the window each time like some other companies, so even with their consoles that flopped it's not like the R&D money is just down the drain, and I'm sure labor-and-materials-wise they're making some kind of margin on the hardware itself.
- zorked 4y ago
  Given the cycles for Nintendo consoles this sounds pretty reasonable particularly now that they have a single line of consoles with the Switch instead of console + handheld. It's not like the Wii U sold a lot. Who knows if the Switch replacement won't be a Wii U. Who knows if there won't be two Wii Us in a row.
daemoens 4y ago
https://archive.is/5e3Ts https://archive.is/5e3Ts
8note 4y ago
It's Nintendo. They're taking advantage that people that like the brand, and want to be able to say that they helped make Mario or Zelda. You can pay disneyland ride designers less because there's status involved with designing Disneyland rides

fomine3 4y ago

(2008). It was the year

diceduckmonk 4y ago

Maybe this operating model is why they haven’t had to have layoffs and can weather the storm. In Japan, people value job security over maximizing expected value of compensation.

kevviiinn 4y ago
The storm of wanting to keep their obscenely large profits at the same scale? I mean, that's what the other big tech companies who are laying off employees are doing
kurikuri 4y ago
>In Japan, people value job security over maximizing expected value of compensation. I don’t think that is it. In Japan, the way of maximizing compensation is by staying in your job as long as possible, because the pay is strongly tied to seniority.
- alwayslikethis 4y ago
  On the whole, this is a rather more "equal" process. The top managers don't get paid the huge amounts they do in the US. However this also leads to all the unproductive situations you can imagine, with seniors running the company into the ground and the juniors not being able to do anything about it.
  - papito 4y ago
    It always fascinates me how Japan is full of anachronistic, counter-productive traditions and is also one of the most advanced countries in the world at the same time. The whole place is full of contradictions. If everyone works absolutely insane hours and has no life, one would imagine the life expectancy would be shot as well, just due to the stress. Someone explain this to me.
    - bobthepanda 4y ago
      Japan was one of the most advanced countries in the world. The country has been stagnating for quite a while. South Korea and Taiwan have since eclipsed it by PPP-adjusted metrics per person. (Japanese make higher paper incomes than South Koreans and Taiwanese, but they also generally pay more for imports due to tariffs.)

moneywoes 4y ago

Even compared to tech giants?

Retric 4y ago
Yes. In 2022 Google at 282 billion / 190,234 employees = 1.48 million per employee. In 2022 Nintendo was 13.923 billion / 7,136 employees = 1.85 million per employee. In theory Google might be more consistent, but the article was written in 2008 when Nintendo was 1.6m per employee in 2008 beating Goldman Sacks at 1.2m and Google at 600k.

nonethewiser 4y ago

> Nintendo has been historically notorious for making more money per employee than most companies That is in no way a bad thing.

m463 4y ago
Japanese firms also have lower salaries.
Wolfenstein98k 4y ago
Agree with this. The Marxist* notion that workers should get salaries commensurate to net profit of the company is weird and purely subjective. Why should they? There is an argument that wages should be tied to productivity, but that would lead to internal inequalities and would be very subjective as many worker outputs are hard to measure. The current employer-employee "bargain" is for the worker to get a steady fixed income, independent of output or consistency, in exchange for the security that provides. Self-employment is a good way to take on more risk for (potentially) higher pay. Before anyone counters with "but what about unskilled workers who can't self-employ", I would return the question - yes, what about them? I see no particular reason why profit of a company must be shared with its workers, most of whom did not outlay the initial capital (or subsequent funding rounds) that built the company. *Maybe there's a better word for this or an earlier progenitor of this idea but I think this captures it well enough for this comment.
- kelseyfrog 4y ago
  Can you cite the section of Capital you're arguing against? I want to understand both sides.
- kergonath 4y ago
  > The Marxist* notion that workers should get salaries commensurate to net profit of the company is weird and purely subjective. Is that actually a thing? I read the Capital quite a long time ago but I don’t think Marx advocated for any of that. He wrote about workers’ ownership of the means of production and how they should be the ones deciding what to do with the results of their labour. In a market economy, that would lead to workers-owned companies, so the people deciding salaries and compensations would be the employees. How revenue is split is still a strategic decision: you still need war chests for difficult times, investments, etc. You’d hope that the pay would be more fair, but it’s a consequence of the employees taking decisions, rather something postulated a priori. > Self-employment is a good way to take on more risk for (potentially) higher pay. Indeed. And some people really like it, which is great. But you obviously cannot do the same thing as a one-man shop than as a large company. A working economy needs both, otherwise the plucky independents quickly get out of things like manufactured goods and food. Also, for some people stability is more important, and sometimes both sets of people are the same at different points in their lives. It is not really a good argument against fair wages. > Before anyone counters with "but what about unskilled workers who can't self-employ", I would return the question - yes, what about them? This sounds fine and dandy until they take a rifle and get off you what they need to survive. The simple truth is that people are not going to just starve because you think they don’t deserve a living. > I see no particular reason why profit of a company must be shared with its workers, most of whom did not outlay the initial capital (or subsequent funding rounds) that built the company. OTOH, capital itself does not build anything or produce anything. You need people to actually do the work at some point, and they are at least as necessary and important as the rich dude who signed a check at the beginning. Never mind the fact that “investors” who get rich off the secondary market do not bring anything to the company of which they trade the shares. I do it as well at my (very modest) level, but I don’t pretend I am doing anything useful by buying and selling stock.