Exclusive Games, Platform Strategy, and Financial Performance: A DuPont-Based Comparison of Nintendo, Sony, and Microsoft

Abstract

This paper examines how exclusivity strategies in the video game industry manifest in the three core financial statements—income statement, balance sheet, and cash flows—and ultimately shape return on equity (ROE) via DuPont decomposition. Using Nintendo, Sony, and Microsoft as comparative case studies, I link exclusivity decisions not only to platform competition but also to accounting choices and capital allocation. Nintendo’s evergreen first-party franchises translate into high net margins and conservative balance-sheet management, with cash-heavy stability rather than leverage driving ROE. Sony’s blockbuster-oriented exclusives expand scale but compress margins during development and launch phases, while moderate leverage and content capitalization shift risks toward impairment and pipeline execution. Microsoft’s “weak exclusivity,” anchored in Game Pass and cross-platform engagement, generates stable subscription cash flows but inflates goodwill and intangible assets, reducing short-term turnover even as group-level margins remain cloud-driven. By integrating financial statement analysis with game theory, I argue that exclusivity is not simply a marketing lever but a financial variable that reallocates risk, timing, and capital intensity across firms. The findings suggest that exclusivity strategy is central to understanding how platform holders sustain profitability, structure their balance sheets, and smooth cash flows in a rapidly evolving global games market.