Which Is the Bigger Company, Microsoft or Sony?by Brian Hooper
Microsoft and Sony are two of the biggest companies in the world. Both have been producing widely adopted consumer and professional products for decades. In particular, each company produces competing gaming and entertainment consoles. Determining which company is actually bigger depends on what you’re measuring. If you go by the Fortune 500 list, you’ll find Microsoft was ranked No. 37 in 2012, while Sony, based in Japan, was No. 83 on the Fortune Global 500 list in 2012. Those rankings don’t tell the whole story, though, since the lists are based solely on revenue. For that reason, researchers use multiple metrics to get an overall picture of how big a company is.
Revenue, Profits and Assets
The balance sheet is considered one of the most important indicators since it shows the financial health of a company. For the quarter ending June 2012, Microsoft reported total revenue, or turnover, of nearly $74 billion and gross profit of nearly $56 billion. For the same time period, Sony reported total revenue of approximately $83 billion and gross profit of nearly $17 billion. As of June 2012, Microsoft’s assets total approximately $121 billion, with net income approximately $17 billion. By comparison, as of December 2011, Sony suffered a net income loss of approximately $2.5 billion, and as of March 2012, its asset value is approximately $170 billion.
Number of Employees
Number of employees is frequently used as a determinant of size, especially by the government. Microsoft has approximately 94,000 full-time employees as of June 2012. The majority are in the U.S. Sony has 162,700 employees, as of March 2012. The majority of its employees, approximately 36 percent, are in Japan; North America is home to approximately 12 percent.
Market share is a yardstick for determining size for companies within the same industry. Because Microsoft and Sony both have products in the consumer electronics and devices category -- Microsoft has the Xbox 360 and Sony has the PlayStation 3 -- market share can be used as a viable metric. According to NPD Group, a market research firm, as of February 2012, Microsoft, with its Xbox 360, holds a majority share in the gaming console market: 42 percent.
Market Capitalization and Number of Shares
Investors sum up market capitalization as what a company is worth, and they consider this metric more valuable than sales figures when determining corporate size. Formally, market capitalization is the aggregate value of all of a company's outstanding shares. Measured by market capitalization, Microsoft is bigger than Sony. As of October 2012, Microsoft’s market cap is approximately $243 billion and Sony’s market cap is approximately $11.5 billion. Microsoft has approximately 8.4 billion shares of common stock outstanding as of July 2012. Sony has approximately 1 billion shares outstanding as of March 2012. These figures are according to the companies’ publicly disclosed financial data.