Sony and Nintendo released their financial reports on the holiday quarter this week, and both are being pummeled by the strength of the Japanese Yen. But Nintendo's focus on gaming and the strength of its console have left it in far better shape than its bigger rival.
Recently, Sony gave a preview of its third quarter earnings that set the stage for a grim set of final figures. Those figures were released Thursday, on the same day that Nintendo unveiled the results of its sales during the third quarter. Although both companies are facing the same problems when it comes to general economic conditions, Nintendo seems set to stay in the black regardless, and it's worth taking a look at why.
The most fundamental problem that both companies face is that much of their income comes from overseas sales, and the Yen has strengthened considerably against many currencies as people flock to its relative stability. That means that all of the overseas revenue is diluted in value when its converted to Yen on its return to the company.