Nintendo makes more profit per employee than Goldman (or Google)
ft.com
ft.com
When someone says "the average employee" at an investment bank made 600K last year, or brought in 1.25M in profits, keep in mind the old joke about how, when Bill Gates walks into a bar, the average guy in that bar becomes a multimillionaire.
Every trader, salesperson, and banker has dozens of people working to support his or her work with paying clients. The support staff, which includes operations and IT, generates absolutely no revenue at all. (With possible exceptions for the small handful of people who write automated trading and risk systems.) Correspondingly, the support staff is not paid anywhere nearly as well as people who work in "producing" divisions. Notice that no one talks about the median employee, which would be a much more interesting metric.
I take it no one has heard of Samsung's dormitories? For the 1st 2 years of employment there as an engineer, you have to live in the company dorm with your team (sharing a room with a bunk bed with 1 team member). o yeah they also get to regulate when you can leave company grounds (like for going out on a date). it's a very dif world there...
I met a fellow who once employed over 30 people for his building construction company. Then he became one person, with the rest outsourced. Maybe he is doing better than Nintendo if one measures success as the article does.
Employees are the most valuable resource of most companies, and efficiently utilizing this valuable resource is the most important function of management. Managerial complexity is a super-linear function of headcount, and complexity kills productivity.
And Nintendo's per-capita profitability also explains why Microsoft is so desperate to break into video games, except that they just haven't been able to replicate the magic so far.
Their performance might not seem as impressive as it is because they have other multi-billion dollar products, but the Xbox has been a gangbuster success for Microsoft.
Look at it this way. If you think Microsoft knew, when they started their foray into the video gaming world, that they'd be exactly where they are today that they still would have done it?
My guess it they're REALLY happy with the way it worked out.
Before Wii, I could wrong, but I think they had about 3 billion in cash reserves.
This is in part due to the unexpected roaring success of the Wii. Such a feat will be difficult to pull off in the future (although Nintendo is remarkably left-field thinking and might surprise us).
So before the Wii and DS, I bet that the profit-per-employee was probably less than that of a Goldman employee.
I would be really interested in a 10 or 20 year profit-per-employee comparison between Goldman and Nintendo.
GS made 3-4 times less this quarter than the same period last year though.