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Key takeaway: "Nintendo is able to make so much money with so few people because it relies on outsourcing."

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.

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Yes, and here's another great example of outsourcing: Vizio, the flat panel TV manufacturer had revenues of $1.9b with only 85 employees. That's $22.4m/employee in revenues. I don't know what their profit margin is though. (http://www.inc.com/inc5000/2008/company-profile.html?id=2008...)

Isn't Vizio a Sony Wing?

Outsourcing is a perfect illustration of the revenue/profit per employee analysis. If a particular function your company is doing is low-value-added (i.e it can be done by companies with lower revenue per employee than yours), you should consider outsourcing that function.

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.

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