Nintendo Market Cap Rises Above Sony's

Every day brings another reminder of how delicious it has been if you were astute enough to short Sony (SNE) in the current games cycle and go long the dark-horse, Nintendo (NTDOY.PK). A report from my former colleague Hiroshi Suzuki in Bloomberg’s Tokyo office today notes that Nintendo’s market cap has surpassed Sony’s at 6.57 trillion yen, roughly $53 billion, compared to 6.48 trillion for Sony. Suzuki doesn’t specify, but I assume this is the first time in the companies’ history that Nintendo has surpassed Sony in market capitalization.

Nintendo’s sales of the Wii game console in Japan in May, 251,794 units, outsold Sony’s PlayStation3 by 5-to-1, Suzuki notes, citing data from Enterbrain, Inc. Nintendo’s sales in the U.S. also handily beat Sony, at 338,000 units versus 81,600 for PlayStation3.

I’ve opined in the pages of Barron’s Online that with the ongoing troubles of profitability and market share in its games unit, Sony’s stock outlook at present is not good at all. Some part of my argument has to do with a near-term technical top in the Japanese equity market. It will be interesting to see if Nintendo resists that drag on the broader Japanese market the rest of this year.

Nintendo’s U.S. American Depository Shares closed up half a percent Monday at $45.75, while Sony’s ADSs closed down 1% at $51.98.