JIN-489 -- "Fewer Bankers, More Geeks" or "How Japan (can) Beat the Global Financial Crisis"

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J@pan Inc Newsletter
The 'JIN' J@pan Inc Newsletter
A weekly opinion piece on social, economic and political trends
in Japan.
Issue No. 489 Wednesday November 05, 2008, Tokyo
All rights reserved. No part may be reproduced in part or in
full without the explicit written consent of the publisher.
Readers who use this newsletter for investment purposes do
so that their own risk.

When Japan's youth take a verbal battering for placing more value in
their video game consoles than their textbooks they should pick up the
financial newspapers and pull out a few select articles to back up the
case for more Nintendo-time.

In the midst of the continuing global financial crisis, Nintendo has
reported that video game sales have so far remained strong. Its first
half operating profits were 252 billion yen ($2.6 billion), up 34
percent on the same period in 2007. It also raised its sales forecast
for the Wii console by 1 million to 27.5 million units.

This follows a report in the Financial Times that said that the
average Nintendo employee earns $1.6 million for the company compared
to the $1.24 million that the average Goldman Sachs employee makes for
the investment bank (the average Goldman Sachs banker, though, makes
660,000 million compared while your run-of-the-mill Nintendo employee
makes just $90,900). It's not all good news for Nintendo - the strong
yen did however cause the gaming giant to cut this year's net income
forecast by 16 percent to 345 billion yen.

While playing video games probably doesn't make you a good programmer,
it can't hurt. And when the nation's banks slash their profit
forecasts like they did in the last week, it probably makes most
bankers wish they could lock themselves in their rooms with their games
consoles or maybe wish they had paid more attention to the video geeks
at school and become programmers in the first place.

After the initial strength that the banks showed as they moved into
Wall Street, following the collapse of Lehman Brothers, the financial
institutions have faltered as the crisis continued to spread to Japan.

Mitsubishi UFJ Group (MUFG), announced that its net profits would be
66 percent lower than previously forecast at 220 billion yen ($2.2
billion) on lower ordinary income of 2,900 billion yen. This was due
to lower fee and trading income, impairment losses on stocks and
higher credit costs.

Mizuho has also announced that its net profits would be 250 billion
yen, less than half its previous estimate. This was mainly due to a
writedown in value of its securities holdings and higher credit costs.

Nintendo's performance indicates that consumers are turning to at-home
entertainment as the global economy worsens. Buying games for
Nintendo's Wii console or its DS handheld console remains a cheaper
option to going to the cinema or dining out (after multiple games,

So, the moral of the story? Certain industries are going to do well out of
the current economic woe. Don't sell your Nintendo shares… or if you
are depressed because you didn't buy any Nintendo shares when they
were a lot cheaper (and all your investments have halved in value)?
Buy a Nintendo and sit at home, attempting to distract yourself from
your own misery.

Of course another remedy would be to buy the latest edition of J@pan Inc
magazine. This week our November issue is available across the
country. As part of our IT special, we take a look at some of Japan's
hottest Web innovators. Writer Chris Salzberg, meanwhile, delves into
the Akihabara massacre and the use of new media to report on the
tragedy. We also feature IT company Fusion Systems as they take on

Also examined, is the ongoing global financial crisis – writer Hugh
Ashton takes a look inside Lehman Brothers as Nomura moves in.
Columnist Jesper Koll tells us why the US banks cannot be compared to
their Japanese counterparts during the early 90s. We also peer around
the corner to see what lies ahead.

These, plus all our regular columns and sections, should keep you away
from the Nintendo Wii, at least for now.

Michael Condon

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Speaking at MIDEM / MidemNet 2009
* David Eun, VP Content Partnerships, Google Inc
* Jay Marciano, President, Madison Square Garden Entertainment

* J.Y. Park, Founder and President, JYP Entertainment
MidemNet: 17 - 18 January 2009
MIDEM, the world's music market: 18 - 21 January 2009
9,000 key professionals from 90 countries

The earlier you register, the less you pay.
Register now at: www.midem.com


------------------ ICA Event - Nov 20 --------------------
Topic: Focused on the Bottom Line, Using third party solutions
in Japan for SMEs

Presenter: Tony Fujii - Partner, Fusion Systems
Details: Complete event details at http://www.icajapan.jp/
(RSVP Required)

Date: Thursday, Nov 20, 2008

Time: 6:30 Doors open, Buffet Dinner included, cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members)
Open to all-venue is The Foreign Correspondents' Club of Japan