Polygon writer Steve Bowler has written an interesting article that suggests that an acquisition of Nintendo by Disney could help turn the company’s fortunes around. It should be taken into account that this is an opinion piece by Polygon, but it does raise some interesting questions. Although it’s unlikely to ever happen it makes for a good read. Be sure to check out the article, here.
“Nintendo would be Disney’s second priciest intellectual property grab to date. A fairly straightforward way to ballpark a company’s worth is to multiply their net revenue by three to four times. This puts Nintendo somewhere in the neighborhood of a $11 to $22 billion buyout based on the numbers of fiscal 2014″
“This is the lowest it would cost to buy Nintendo in seven years, since the company is in a slump and bleeding cash. If Disney were to buy the company, this is the time. Things are looking up for Nintendo in some ways, but coming off a long stretch of losses and struggling hardware sales there’s only so much big games can do to help the company. Nintendo is at a historic weak point, making the company very attractive for acquisition at a good price.”
“It would still cost a ton of money. To put the $19 billion-ish price into an easy to digest number, buying Nintendo would cost Disney more money than they paid for Pixar, Star Wars and Marvel, combined. It’s a huge purchase, unless you’re Disney.”
“Disney’s current Net Worth is hovering around the $142 billion mark, and the profit they made from the last two fiscal years would allow them to buy Nintendo with cash, if it came to that. And it wouldn’t.”
“The last time Disney made an acquisition this size was when they paid $19 billion for ABC in 1996. With inflation, that purchase would have cost about $29 billion today. Disney is no stranger to huge, ambitious acquisitions.”
“Disney — using the same game plan they used for Pixar, Marvel, and Star Wars — could recoup that cost within five years. The secret is that Disney wouldn’t be investing in the video game business, they would be furthering their already near monopoly on characters.”