Michael-Pachter
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Pachter: More console price cuts coming by summer
In his latest advisory note to investors, Wedbush Morgan prognosticator and analyst Michael Pachter goes on record with his belief that we'll see "another price cut for both systems some time this year (around summer)," noting in the email that "because its manufacturing costs are lower, Microsoft has the ability to lower price as early as March or April." In lieu of a price cut on Microsoft's part so soon, Pachter feels that the company may instead introduce "a more feature-packed Xbox 360 in early 2010 (likely with a 250GB hard drive) at the same $299 price point." The great seer believes that Microsoft will only drop the price on its console before summer "if it begins to lose significant market share to Sony," adding that he anticipates last fall's price cut on PS3 will continue to help Sony gain ground on Microsoft. On the portable front, Pachter doesn't expect PSP Go (remember that?) to make much headway this year unless Sony prices it "more reasonably," and says that the biggest challenge facing Nintendo DS is "its own high installed base," stating that he anticipates sales of the handheld to steadily decline in 2010. Good thing Nintendo's started talking about a "DS2," huh?
GameStop reveals 2010 capital allocation program
We know, we know -- you've been sitting around all day worried sick about GameStop. Ever since the recent announcement of a cut profit forecast and the resultant drop in share prices, we've been in exactly the same boat. Good thing then that the company has announced plans to repurchase $300 million in stock from investors as part of its 2010 "Capital Allocation Strategy," with intentions to increase earnings per share by 10 percent. Wedbush Morgan analyst Michael Pachter sees the announcement as "positive," echoing the company's statement of continued financial growth in 2010. "We believe that industry sales will rebound in 2010 and that GameStop is well-positioned to gain share the first half of the year. The company has high exposure to the hardcore software releases, which we expect to drive market growth in 2010, and comparatively low exposure to hardware, which we expect to decline," he says. It certainly doesn't hurt that GameStop plans to open 400 new stores over the course of the year -- the financials even leave $100 million on the side, reserved for "acquisition activity." It would appear that, at least for now, we can all can stop worrying. Finally.
Sources: Red Dead Redemption development in trouble [update]
When we recently spoke with our trusted sources from Rockstar San Diego, in addition to yesterday's information regarding the Midnight Club franchise, we were also told about the allegedly troubled state of Red Dead Redemption. One source said that the game "was a complete disaster for most of 2009 and previous ... it has since turned around a little bit, but there are huge problems with it still." Unsurprisingly, the issues with the game are repeatedly claimed to be the result of mismanagement -- along the same lines as what was mentioned in the recent "Rockstar spouse" letter. "Red Dead [Redemption] has been in production for six years (mainly because of horrible management/lack of direction due to fear of disrespecting Rockstar NY) and it will never get the money back in sales it cost to create for those six years," claimed another source. We asked Wedbush Morgan's Michael Pachter to estimate how many copies he thinks Red Dead Redemption needs to sell to make back its development costs and, more importantly for Take-Two, to be profitable. "I'd say realistically, if everybody [at Rockstar San Diego] was working on it this whole time -- so let's assume it's four years to be fair [Red Dead Revolver was released in March 2004], that's $40 million (about $10 million a year to run the studio) -- to make that back and just break even you need at least $80 million in sales; 1.75 million units. For profit: $160 million/3.5 million units." Pachter added that "it's got a shot" and that, from what he's seen of the game, "it looks phenomenal." Our sources are less hopeful, unfortunately: "The functional team that was Midnight Club was shattered. All the people who didn't quit or get fired were thrown onto Red Dead Redemption, many of them being demoted. The completely disfunctional team that is RDR was put to top priority. The people who had floundered on that project or outright screwed it up were promoted and are now in complete control of the studio, and they're running it into the ground." We'll have to see when the game arrives in stores this April -- if it does. We contacted Rockstar for comment on this story and have yet to hear back as of publishing. Update: We were contacted regarding this story by one Rockstar source, who told us: "It will take 5 million 4 million sales at full price to recoup the development costs of Red Dead. The good news is they [Rockstar] are not expecting to make money with Red Dead Redemption. At this point, that project is just supposed to prove that the San Diego studio can make a great quality AAA title." If you'd like to contact us regarding this or other stories surrounding the "Rockstar spouse" letter, we'd love to hear from you.
GameStop shares drop 15% following holiday sales info release
Following yesterday's lowered profit forecast announcement from GameStop, the company's stock took a 15 percent dive as of last night. According to GamesInudstry.biz, stocks opened yesterday "sharply down" due to the release of lowered profit expectations, but rose again before ending the day at $20.46. We might not know what the future holds for GameStop, but Wedbush Morgan analyst Michael Pachter returned from the future for just long enough to say he believes "industry sales will rebound in 2010 and that GameStop is well-positioned to gain share [over] the first half of the year." It certainly doesn't hurt the retailer that 2010 is chock full of delayed 2009 releases, we imagine.
Pachter predicts 'solid' holiday for GameStop, industry sales 'rebound' in 2010
In a recent sales projection sent to Joystiq centering around GameStop, everyone's favorite games analyst, Michael Pachter, offered some viewpoints on December sales for GameStop, taking care to also paint his own portrait on industry sales as a whole for 2010. He points to Modern Warfare 2 and hardware sales (thanks, price drops!) as top earners for GameStop. Pachter is hopeful for 2010, expecting a full-on rebound in game sales starting January. He points to the great exodus of fourth quarter 2009 as a factor behind the increased game sales, with first quarter releases of Bioshock 2, Splinter Cell: Conviction and Army of Two: The 40th Day mentioned as expected top earners. He says this uptick in sales will benefit GameStop, which he surmises will have about 30 percent share of the software market in January -- something that will insulate against what he expects to be a year of gradual decline in Wii hardware sales.
Analysts: Modern Warfare 2 composed over 22 percent of November game sales
In one day, the NPD Group will release its game sales report for the month of November, which should reveal the (near) exact number of units Call of Duty: Modern Warfare 2 has sold in the US thus far. In the meantime, Gamespot reported on two analysts who have predicted the portion of November software sales that were made up of Warfare purchases. Industry analyst superstar Michael Pachter says the game accounts for 23 percent of total game sales. However, Pacific Crest analyst Evan Wilson has it pegged at 25 percent of total November sales. Wilson added that this feat is made especially impressive due to his firm's prediction that "this November's sales will match the month's highest historical total on record." In related news, news stories dealing with Modern Warfare 2 composed 67.2 percent of all news stories over the past month. Oh, wait -- now it's 67.5 percent!
Pachter predicts another Xbox 360 price cut in 2010
If you read the first installment in the latest installment of "Pachter Predixx," you already know that the analyst's new report praises the PS3 for its resilience during these troubled times. According to the report, the PS3 saw an 85-percent year-over-year sales increase in November, while the Wii and Xbox 360 suffered sales declines. This reversal in fortune leads Pachter and his Wedbush associates to a surprising conclusion: "We think that the PS3 will again outsell the Xbox 360 in November and December, prompting a price cut some time early next year." Pachter adds that while Microsoft "has the ability to lower price yet again," it probably won't do so until "it begins to lose significant market share to Sony." As with all conjecture -- even when delivered by professional conjecture conjurers -- we suggest considering Pachter's educated guess as just that: a guess.
Pachter: Modern Warfare 2 sold 6m units in Nov.; PS3 hardware sales skyrocketed
Though the November NPD sales report won't be released until later this week, gaming industry analyst (and possible soothsayer) Michael Pachter has predicted November's biggest players in the gaming hardware and software markets. Unsurprisingly, Call of Duty: Modern Warfare 2 is the highlighted title in his report -- not only does the report claim the game sold around 6 million units last month in the U.S. (for about $350 million), it credits the game with pulling the industry out of a downward spiral that it's followed for seven of the past eight months. The report also awards a large gold-star sticker to the PlayStation 3, which is predicted to have sold 700,000 units in November, an 85-percent year-over-year sales increase. Despite the two upswings, Pachter's report ends on a decidedly dour note, stating, "as 2009 draws to an end, it is clear that it will end as a horrible year for video game publishers." Pachter suggests that sales will drop off once more in December. Happy holidays, gaming industry professionals!
Reggie denies the existence of Wii HD
Though plenty of people -- analyst Michael Pachter chief among them -- are pretty certain that an HD version of the Wii is in the pipeline, you're not going to catch Nintendo's Reggie Fils-Amie copping to it. Speaking with Geoff Keighley on Gametrailers TV, the Regginator said, "Michael continues to be the only one who believes that this is gonna happen. I don't know how forcefully we can say there is no Wii HD." It certainly sounds like a firm refusal, but let's all try to remember that the shelf life of a Nintendo denial is exactly 10 days.
Pachter: Project Natal will cost $50, 'Sphere' no more than $100 [update]
Over at IndustryGamers, everyone's favorite video game predicterer (we're still working on that one) Michael Pachter has taken the reigns of the site and offers his own extensive diatribe on the future of Sony and Microsoft's upcoming new tech: Project Natal and the PlayStation Motion Controller (rumored to be called Sphere). Pachter's assertion is that price will be Natal's biggest selling point and Microsoft will try to expand upon its market of established Xbox 360 owners by offering the device for $50. For Sony's doodad, Pachter says the company is "trying to create an answer to the success of the Wii." Pachter even likens the future state of a Natal-enabled Xbox 360 to the current state of the iPhone -- with features like Twitter, Netflix, Last.fm and Facebook inside Microsoft's box and its intuitive interface, he says casual or non-playing members of Xbox 360 households will become interested. And then when it's bundled with all new Xbox 360s, he says that'll expand Microsoft's reach even more.For the motion-controlled competition, Pachter says he'd be surprised if Sony's asking price was over $100, and stresses that both Microsoft and Sony need to keep "the consumer's cost relatively low in order to achieve broad penetration."[Update: Corrected Pachter's belief that the motion controller would be no more than $100. We sincerely apologize for the misinterpretation and the consequent misinformation.]
Microsoft has 'no plans' to purchase EA [update]
We have no idea where this meshugaas is coming from, but Reuters is reporting unsubstantiated rumors that Microsoft is interested in purchasing the second place third-party software publisher, Electronic Arts. Shares of EA are up today (around eight percent as of this writing) on the speculative purchase. Although we've yet to hear from EA, Microsoft was immediate with its response of: "We don't comment on rumors or speculation." If true, the acquisition would be ... um, wow. Update 2: Microsoft has followed up on its earlier statement, telling Joystiq: "Microsoft has no plans to purchase Electronic Arts." Update: Wedbush Morgan analyst Michael Pachter spoke to IndustryGamers and thinks the whole idea is rubbish. "[It makes] no sense at all," he says. "One platform exclusives would likely nullify NFL exclusivity, could kill off all sports and other licenses. EA's value on one platform is probably half its value to a multi-platform buyer (such as a media company)." A handful of other analysts weigh in, pouring even more water on the increasingly unlikely fire. We'll bring you more information as we hear it. [Via The Street; thanks to everyone who sent this in!]
THQ takeover talk causes stock bump
THQ's stock jumped up a solid 13 percent yesterday over whispers that the publisher is in a takeover company's line of sight. Optimism has recently surrounded the once fumbling publisher, as it pulled off a couple retail successes and has put on a good show with some surprisingly frank talk about its future. However, as much as investors believe a buyout is in the works, Reuters spoke with an analyst who isn't so sure. MKM Partners analyst Eric Handler says rumors of a THQ buyout crop up almost every quarter. He believes THQ still has too many licensed games and is just starting to build a solid foundation of owned intellectual property. Yeah, well ... we talked to an analyst, too. Wedbush Morgan's Michael Pachter tells us he doesn't believe a buyout is likely either. He concurs, "THQ is heavy on licensed content, and many licenses potentially terminate on change of control. I don't see their recent performance instilling a lot of confidence in their ability to manage a bigger library of content that would be presented in a media buyout." Hmmm, from where are investors getting this buyout notion then?
Rumor: Best Buy ad fuels the $50 Wii price drop fire
What you see above is the third circular image we've spotted in just five days advertising a Nintendo Wii price cut to $199.99. At this point, though the image that a Kotaku tipster sent in could very well be made of fancy pixel work by someone with too few extracurriculars on their schedule, we're fairly confident in a forthcoming price cut reveal.Considering the impending holiday season and those other consoles getting recent price drops, it seems likely something will occur with the big N in the upcoming months. If Miss Cleo's Michael Pachter's predictions based on slowing sales are any indication though, we'll know soon enough.
Wii sales have dwiindled by 50% in the past five months
NPD figures show that, compared to the same five-month period last year, sales of the Wii in the US are down a full 50% -- prompting Michael Pachter, games industry analyst at Wedbush Morgan, to look away from his crystal ball long enough to ... analyze the situation. In a note reprinted by IndustryGamers, Pacht-Man -- having finally gotten the PS3 price cut he'd always wanted -- called on Nintendo to drop the cost of Wii, lest its sales slide further."With the core PS3 and Xbox 360 models priced only $50 higher than the Wii, we expect year-over-year sales of Wii hardware to continue their annual declines until the company either changes its bundle or lowers price," Pachter pronounced before concluding, "Wii unit sales are 50% below last year's level over the last five months, and we think that September sales will repeat the pattern."So, Joystiq Biomass, let's say Nintendo doesn't cut the price of the Wii before the holidays. What games and/or hardware would you bundle the system with in order to boost sales -- and help save Ivan?
Rockstar's Agent sneaks into 2010 release window
Aside from the game's exclusivity to the PlayStation 3 and the logo you see above, we've seen little else about upcoming '70s espionage game Agent. But while answering some fan questions about next month's GTA IV expansion, The Ballad of Gay Tony, on its forums, Rockstar North mentions that it's "working hard on a lineup of PlayStation 3 releases for 2010 ... including Red Dead Redemption, Max Payne 3, and the PlayStation 3 exclusive AGENT." The statement goes on to tease "yet to be announced" titles, possibly lending some credence to Michael Pachter's statements on another GTA game in the not- so-distant future. Considering Rockstar's statements were made in response to queries about GTA IV DLC coming to PS3, we wouldn't be surprised if those "yet to be announced" titles are the result of Microsoft's timed-exclusivity expiring. [Via Superannuation]
Pachter expects GTA 5 coming in 2010
So yes, prognosticator of all electronic entertainment Michael Pachter told Gamasutra that he expects Take-Two to release the fifth full Grand Theft Auto game in 2010. It seems far-fetched to us (especially with another GTA IV episode still in the pipeline). But, sadly, Pachter doesn't give us a lot to work with in the piece, so, in the absence of details, we're just going to assume he's right. Journalized. One thing that's actually hard to argue about from the piece, analysts are overwhelmingly positive about Take-Two in 2010 with a bevy of big titles like BioShock 2, Mafia 2, Red Dead Redemption and several others. Does Take-Two even need a Grand Theft Auto next year?
Pachter says Best Buy's new games at used prices program will fail
Best Buy surprised the gaming public last week with the revelation that it was testing a new pricing program that would see the retailer selling new games at used prices. Specifically, the test store in Utah will match the used game prices of both GameStop and Game Crazy. According to Wedbush Morgan analyst Michael Pachter, the program isn't likely to last very long."I don't think it will do well," Pachter tells Game Politics, adding that price matching forces Best Buy to "either cuts their profit per game in half, or wipes it out altogether." He expresses the opinion that Best Buy can't afford to chop $10 off the price of a $60 game, saying that such a practice won't be effective "in the long run." Furthermore, even if the program does take off, Pachter believes GameStop will simply lower its used game prices "to the point where Best Buy can't match without losing money."He has a point, but, from the consumer perspective, it's hard to see a downside. Whether Best Buy's program succeeds or not, it still means lower prices, if only for a short time.
Pachter on delays: Game industry not 'particularly well-coordinated'
When confusing things happen (say, for instance, games slipping into the first quarter of 2010 faster than we can count) we turn to the guy who has all the answers, analyst Michael Pachter. As we cried into his flannel shirt (metaphorically, of course) about all the fun we were missing, he tried his best to explain the situation."I think the game industry isn't particularly well-coordinated," he said, in his best soothing tone. Movies, he continued, are able to get out of one another's way more easily, because if two movies come out you want to see in back-to-back weeks, you're likely to see them both. "But the game business is different," he said, "because you're not going to go out and buy three games in one month. ... Well, maybe you will, but the average consumer won't."We begged for even more explanation, and he obliged.
Pachter deems UK's Modern Warfare 2 price hike a 'test'
How much are you willing to pay for Infinity Ward's latest tunnel-of-fun shooter? Is it £54.99 (close to $90)? If so, you've passed what Michael Pachter calls "a one-time test for Activision." Or maybe Activision is passing the test. The point is ... nobody likes taking tests! No, that's not it. The Wedbush Morgan Securities analyst has told Eurogamer that Modern Warfare 2's higher retail price -- allegedly spurred on by the Euro's strength against the British Pound -- stems from a calculated business decision. "Activision knows it has a 'hot' game, knows that the market will pay an additional 10 per cent, and has decided to increase price accordingly," Pachter said, adding that the Pound was worth less last year when Call of Duty: World at War launched. Pachter speculates that should the gamble pay off, consumers can expect other games to similarly prod established price boundaries. But you guys aren't going to let that happen! And you're certainly not going to spend a fortune on some goggles and a useless plastic head, right? Hello? Anyone?
Pachter predicts 'game-enabled' Apple TV by 2013
Wedbush Morgan analyst -- and video game prognosticator -- Michael Pachter is back with more predictions for the future! Speaking with IndustryGamers, "The Pacht" said he believes it's only a matter of time (three to four years) before Apple takes a stab at console gaming by way of a "game-enabled" version of the Apple TV. "Apple TV is the device that they can turn into a console, and they have essentially the same goals as Microsoft -- to turn Apple TV into an entertainment and Internet hub," he proposed. The game industry Nostradamus figures that "If [Apple] can get enough iPod users to download games, it's a natural that they can ultimately convince a large number of these users to buy a game-enabled Apple TV," for which he believes "a 2012 or 2013 launch" would be most likely.Pachter feels that Apple will start off conservatively with regard to the scope of these "console" games, but eventually aim to take on the best its competitors have to offer. "We'd get cool stuff like World of Goo or Geometry Wars," he predicts, "But probably not super cool stuff like Gears of War until they bought a few developers." Of course, Apple could just fulfill another long-running prophecy and buy Electronic Arts.
