Tag Archives: michael pachter

Michael Pachter: Nintendo Avoiding E3 Presentation Is A ‘Good Business Decision’

3DS, Nintendo, Wii U, ,

wii_u_e3_2012Famed web-analyst Michael Pachter has given Nintendo fans food for thought in his latest Pach-Attack show. This time, Pachter appears less enthusiastic about sharing his opinions, but today he’s brought Nintendo’s decision to skip their annual E3 presentation to the table, and he cuts straight to the bone.

Pachter, answering the question from twitter as to whether Nintendo’s decision to skip the E3 press conference was a good business decision, responds as follows:

“I think it is a crappy decision because you don’t get many opportunities when you’re a console manufacturer to have the entire world focused on games. So it’s the one time a year that you can be certain that everybody cares [...] I think that from just a basic decision it’s an opportunity for Nintendo to really show off a lot of stuff.

“But you asked was it a good business decision and, from your basic economics, it’s a profit deal. If you’re expected revenues from spending money are bigger than the amount you have to spend to generate those revenues, then it’s a good business decision.

“I think that Nintendo gave this a lot of thought – they said we don’t really have anything new to show, [...] we don’t really have any new Wii U games that are going to shine that are playable and, oh by the way, the reason that Fox News, ABC, etc, are all here is to look at the next Xbox and PS4, then we’re just going to look bad next to them.

“I think not doing it, probably, is a good business decision. I just think, as a gamer, and as someone who is interested in the industry, I would prefer to see everybody represented at every show. Nintendo made a business decision, and ultimately, it is probably the right one.”

So, Pachter believes it is a good business decision for Nintendo to avoid an E3 presentation this year, but what do you think? Let us know in the comments below.

Michael Pachter: ‘I Don’t Get Japanese Developers’

Nintendo, Wii, Wii U, , ,

wii-u-blueRenowned Wedbush research analyst Michael Pachter has admitted he doesn’t understand Japanese companies or their motivation for releasing games. The latest Pach-Attack comes after he defended Nintendo’s software strategy, but in a question submitted about a Final Fantasy VII remake from Square Enix, he appears to have slipped back into his age-old ways. Pachter said: “I don’t think Nintendo is unique in being inscrutable. I don’t get any Japanese developer, I don’t know what motivates them, especially in how they release games into the West. Final Fantasy is just one of those franchises I just don’t get.”

Moving on from Final Fantasy, Pachter answers a question deliberating whether it is a riskier option to become an ‘everyone’ console, or a specific ‘hardcore’ software. Turning a comparison from the Wii’s everyone and non-traditional market to the Wii U’s ‘traditional games market’, Pachter said it was a mistake made by Nintendo.

He continued: “Nintendo had a huge success in expanding into the non-traditional market – that’s 25-year-old women who play Guitar Hero, 45-year-old women who play Wii Fit, 65-year-old women who play bowling – that worked and they sold a lot of consoles, but those people didn’t really embrace other software titles [...] so I think that you can make money if it resonates with everyone but ultimately it causes you to make mistakes like the Wii U.

“Nintendo thought all these same people would line up and play the Wii U [...] and those non-traditional people didn’t embrace it. I think Nintendo is going to be lucky to sell 30-40 million Wii U’s, they might sell 20-25 miliion which makes it more like a GameCube, but we’ll see.”

Pachter Says He ‘Would Never Ever Question Nintendo’s Software Strategy’

3DS, eShop, Nintendo, Wii U, , , ,

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Famed video game industry analyst Michael Pachter has finally had some good words to say about Nintendo on the latest edition of his show, Pach-Attack. In the latest episode of the show Pachter discusses the HD remake of The Legend of Zelda: Wind Waker as well as the Nintendo eShop. Here’s what Pachter had to say.

PDantas: “Mr.Pachter, do you think Nintendo is expanding their eShop services for countries outside the US anytime soon? I’m in Brazil and I fear I won’t be able to download the new Wind Waker HD when it comes out.”

MP : “Yeah I think so, I think Nintendo is very late to the party with the eShop. But so far what I’ve seen it actually works quite well, you know, I think in typical Nintendo fashion they did it right, they just did it late. So I think it’s their intention that any place you can download their games, they’re happy to sell them to you.”

Marc42: “What do you think of Nintendo re-releasing Wind Waker? No mention of Mario, Metroid etc. Creative troubles?”

MP: “Urm, I think Nintendo is an enigma wrapped up in a question mark. I have no idea what motivates Nintendo to release the games they release. I think you can safely assume that if Nintendo thinks they can make money re-releasing a game, they’re going to re-release the game. I certainly wouldn’t diss them at all for bringing back Wind Waker, and I would not rule out that because today there is no mention of any other game they’re not going to do that. I think that pretty much anything that is Mario or Zelda is under Miyamoto’s control and I think that Miyamoto is given complete freedom to pick and choose what he wants to work on, what he wants his studios to work on. I think that he decided that Wind Waker would just look great in HD. The demos we saw it looks pretty great in HD. It’s a big big franchise and I think they will sell a lot of units. The only constraint to selling units of Wind Waker is the amount of Wii Us out there. So far not very many, but in time there is going to be 10, 15, 25 million and I when there are they are going to get a very high attach rate. That audience is super loyal to the Zelda franchise, of course they’re also loyal to Mario but you’re going to get a new Mario title, probably more of these retro titles later on in the Wii U’s life cycle, but again I’m at a complete loss to explain what motivates Nintendo to do anything, they have their own method, it has worked for them for a long time. I would never ever question their software strategy, I think they do a great job on software, I consistently question their hardware strategy but not software, I think they know what they’re doing.”

Thanks, Dusklurker

Pachter Says Nintendo Only Sold 80,000 Wii U Consoles In US During February

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Wedbush Morgan analyst Michael Pachter believes that Nintendo only managed to sell 80,000 Wii U consoles in the United States during the month of February. Pachter says that the original Wii console sold the same amount as its successor during February. Pachter points out that Wii U’s sales were around half of the 165,000 PlayStation 3 units sold last month and were miles behind the Xbox 360, which sold 225,000 units. The official NPD numbers should be coming sometime later this week.

“The Wii sold nearly double our estimate as the Wii U vastly underperformed our expectations, likely due to a relatively thin release slate and an unusual number of returns. It is difficult to envision a turnaround in Wii U hardware sales without a price cut or until more compelling software becomes available, but we think that weekly sales of 20,000 units is likely. We think that the long-term appeal of the console will be severely limited by the perception that the next consoles from Microsoft and Sony will be much more powerful with greater online integration and multimedia functionality.”

Pachter Claims That Nintendo Is A Bad Company With A Poor CEO

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Famed Wedbush Morgan analyst Michael Pachter has spoken out against Nintendo during the latest edition of his Pach-Attack show. Pachter says that Nintendo president Satoru Iwata is a poor CEO who has ultimately done a terrible job at running the company. His opinions came as part of a segment on the show, where he was asked whether or not Nintendo will leave the hardware business.

“Having to? No, never,” Pachter said. “Wanting to? Not while their biggest shareholder is Mr. Yamauchi who I believe is around 70, 71 years old, and not while Mr. Iwata is CEO. I think those two guys are deeply rooted in tradition in the past, in what made Nintendo great. And I think that the Nintendo formula for success for the last 35 years has been manufacture a console, sell it at a profit, and support console sales with proprietary software. And then when your console sells well, collect royalties from third-parties for the privilege of putting their software on the console.”

However, Pachter believes “that model is broken for Nintendo.

“I think Nintendo is no longer able to compete the way they did in the past and sell their consoles at a big profit,” he continues.

“I think that the Wii, when it first launched they were probably making about $100 of profit per unit. I think the DS when it first launched was probably generating about $50 of profit per unit. The 3DS I think is barely making a profit. The Wii U I think is barely making a profit – I’m talking 5 or 10 bucks per unit.”

“But I don’t think they realise that yet,” he adds. “And that’s a business decision, so this is a criticism of Mr. Iwata, not of Reggie [Fils-Aime, President & COO, Nintendo of America]. Reggie and the marketing team, they’re great, they do what they can. You have to… play with the cards that you are dealt. They’re dealt the Wii U, they’re going to do the best they can to market it and the best they can to get you excited about the software. So I love the US marketing guys, I think they’re phenomenal and I have no problem with any of those guys.”

“I think Mr. Iwata’s a pretty poor CEO,” he continues. “I think he’s done a very poor job running the company. I have a neutral rating on Nintendo, but I have to say only because their cash level supports their current share price. It’s a bad company that doesn’t make money.”

“Your question, will they have to exit the console-making business?,” continued Pachter. “The good news is, Nintendo has something around 8 or 9 billion dollars – billion – of cash on their balance sheet. When they lose money, they lose something like a billion dollars. And frankly, I think next year their losses will be smaller. I think if they lose money it’ll be $100m, $200m. They can run for 50 more years and keep losing money and they’re not going to go out of business. So they aren’t forced to do anything.”

“The stock has dropped to cash value so there’s no value in investing in it. The only way anybody is going to make money going forward is if Nintendo suddenly starts making money, and they’re not going to make money on hardware, not at these prices.”

He continued: “If Nintendo’s business is trying to make a profit, once they conclude they aren’t going to make any money on hardware, of course they should exit the hardware business. And if they were to put their software on multiplatform they would probably sell twice as much software. So I think Nintendo, if they were to follow the SEGA route, would be immensely more profitable, but it’s not in their DNA…

“When Yamauchi no longer is a shareholder [and] Iwata is no longer there, maybe, but I’d say they’re gonna keep fumbling around and keep trying to make money in hardware. Don’t think it’s going to work. I’m not particularly optimistic about an investment in Nintendo stock and I am a stock market guy so I’ve been pretty good about stock market investments.

“If you don’t like that answer, Nintendo fans, deal with it.”

 

Pachter: Wii U ‘Too Similar’ To Current-Gen Consoles, Could Sell As Few As 30 Million Units Lifetime

Next-Gen, PlayStation 4, Wii U, , , , , , ,

wii_u_console_and_controllerWedbush Securities analyst Michael Pachter delivered a presentation during this year’s South by Southwest (SXSW), which is taking place right now and ends March 17th. During his presentation, partly because he thinks Nintendo’s latest console is ‘too similar’ to current-generation consoles, including the aged Xbox 360 and PlayStation 3, Pacther said that the Wii U is likely to sell a measly 30 to 50 million units in its lifetime. Also, during the same presentation, Pachter said he thinks the PlayStation 4 and the next Xbox will have sold a healthy 85 to 95 million units each, at the end of their courses of being on the market.

Pachter Says “The UK Games Market Is A Joke”

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Famed Wedbush Morgan analyst Michael Pachter has told Digital Spy that he believes that the UK games market is a joke. The UK games market has suffered enormously over the past few years with a number of leading retailers claiming bankruptcy including GAME, HMV and Blockbuster, and the refusal of GameStop to expand into the market. Here’s what Pachter had to say about the volatile market.

“The UK games retail market is a joke, with retailers pricing below cost to drive traffic.”.

“That’s great for consumers, but retailers can’t make any money on games, hence the bankruptcies of GAME, HMV and Blockbuster, and the refusal of GameStop to expand into the market.”

Pachter Says ‘The Only Thing That Will Get Wii U Moving Is A Price Cut’

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wii_u_zelda_tv

Famed Wedbush Morgan analyst Michael Pachter has commented on Nintendo’s third quarter financial results and says that Nintendo cutting the Wii U forecast is further evidence that Wii U doesn’t capture the imagination of the Wii. Pachter went on to say that the only thing that will get the Wii U moving off store shelves is a much needed price cut. Here’s what he had to say.

“I always thought Nintendo’s Wii U software forecast made no sense.”

“They initially guided 24 million, are taking that down to 16 million, which is a 4:1 software attach rate. That’s reasonable, especially given that the installed base is 3 million hardware units now and the guidance implies they need to ship only 4.31 million more software units.”

“The hardware guidance is disappointing, and there isn’t really anything that will get hardware moving other than a price cut. I think they got it wrong with this console, it just doesn’t capture the imagination the way that the Wii did.”

“The Wii U is not going to be very competitive if Sony and Microsoft launch comparable consoles at comparable prices. The early weakness will cause many third party publishers to re-think support for the Wii U, and we might not see much support at holiday 2013.”

Pachter Says Wii U Is ‘Simply Not High In Demand’

Nintendo, Wii U, , ,

wii-u-blue

Industry analyst Michael Pachter has weighed in on a Eurogamer article which suggests that the Wii U is seriously struggling at retail outlets throughout the world. Pachter had a few choice words about the console, which he thought would fare better than it currently is. Pachter says that the Wii U simply isn’t in high enough demand around the world, and that this is a major issue for Nintendo. He also expected that more Nintendo fans would have supported the format, but concedes that they are probably low in number.

“The performance so far is below my expectations. In fairness, [Nintendo's] forecast of 5.5 million global consoles shipped by 31st March was the reason my expectations were higher. The stock at retail suggests that they did ship around a million to the US [in time for Christmas], but they were not sold out. By way of comparison, they sold 1,090,000 Wiis in November and December 2006 in the US and were sold out.”

“This device is simply not as highly in demand, and although I didn’t expect it to be over the long run, I did expect Nintendo fanboys to support it in bigger numbers at launch. It really is amazing that there are so few true hardcore Nintendo fanboys in the US, but they make so much noise.”

Pachter: Nobody’s Going To Support Wii U, And Nintendo Will Become Completely Irrelevant

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black_wii_uMichael Pachter, research analyst at Wedbush Securities, recently claimed that no developer or publisher, other than Nintendo, will support the new Wii U in the future. Pachter said he thinks that when next-gen consoles from Nintendo’s competitors are released, they are going to be better than Wii U. Pachter also said he thinks Nintendo will eventually become completely irrelevant.

“I think you’re going to see now with the Wii U, notwithstanding its early launch support, nobody’s going to support it. I don’t think we’re going to see every game on the Wii U next year. I think when next-gen consoles come out they’re going to be better than the Wii U. Call of Duty is amazing on the Wii U this year. The problem with playing Call of Duty online is it’s a community and if there’s only four people playing it on the Wii U it’s no fun. Nobody in their right mind would buy a Wii U and say ‘I’m going to play Call of Duty.’ That’s like saying ‘I gave up Facebook, and it’s Google+ now’.”

“Nintendo’s trading at about $3 billion of equity value; it was trading at about $80 billion. The market hates business models that start to show losses, and start to fail. Crappy little Riot Games, doing $150 million in revenue and wildly profitable, is worth a buttload more than Zynga, doing $1.1 billion and not making money. I think Nintendo becomes completely irrelevant. They have their niche, Nintendo’s first-party content is great content, and hardcore people will keep buying their consoles, but they’re not going to only play with Nintendo consoles.”