Michael-Pachter
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The internets present: Michael Pachter FACTS
Joystiq admittedly went a little crazy with stories involving Wedbush Morgan analyst Michael Pachter recently. But, how can the internet blame us? The man is such an important figure. Not only to the video game industry, but to the current state of humanity. Inspired by Harmonix's Alex Navarro, the facts of Michael Pachter's importance were spoken across the Twitterverse and compiled by one Jared Newman. A small sampling: When Michael Pachter gets the Red Ring of Death, he sends Microsoft a coffin. Publications often misrepresent Michael Pachter as a "Wedbush Morgan Analyst." No company can contain Michael Pachter. Michael Pachter willed the Dreamcast to its destruction. No one can cast dreams except Michael Pachter. There is a little-known seventh ESRB rating: P. It stands for Pachter. P-rated games can only be played by the awesome. Michael Pachter has learned to suppress the pon farr. He's that logical. We hope these facts help clarify his importance. Those looking to learn more can always search Twitter for #pachterfacts. Some facts show a lack of refinement, created by jealous heathens, but many will bestow the importance of this one man. If you know more facts, please feel free to add them below. Inspiration will get you kudos, crassness will get you a one way ticket off Joys- Pachstiq.
Current console adoption rate only now passing last cycle's, Pachter reports
Among the many fascinating (and not so fascinating) takeaways from Wedbush Morgan analyst Michael Pachter's recent and massive industry report are revelations about the current console adoption rate. As much as the Wii has seemingly penetrated previously untapped demographics (see grandma's now defunct bridge club) and ostensibly raised console adoption rates to new highs, the current generation is practically dead even with the last one when comparing the two generation's first four calendar years on the market. That is, from 2005 (when Xbox 360 launched in late November) through 2008, the current generation of consoles (Wii, PS3 and 360) combined for approximately 78 million unit sales, according to Wedbush Morgan estimates. Comparatively, from 2000 (the year PS2 launched) through 2003, the previous generation (GameCube, PS2 and Xbox) combined for 78–79 million unit sales. However, in this pivotal fifth year, Wedbush Morgan predicts the current adoption rate will begin to pull ahead of the previous rate.
Pachter: Nintendo is benefiting from global recession side effects
Normally when Wedbush Morgan analyst Michael Pachter whips out his crystal ball and starts getting the vapors, he doesn't have time to turn on his minirecorder and take down the futurespeak channeled through his body. Luckily for us (and you!), he not only recorded it this time, but also wrote it down in the form of the 2009 Interactive Industry Report! We delved through the beast of a document this afternoon and found an interesting segment regarding the Nintendo Wii relying on "slower adoption rates of current generation technology" (read as: high-def displays) to help boost sales.Pachter writes on page nine of the report, "The global recession served to benefit Nintendo at its competitors' expense," referencing Microsoft and Sony as having slower console sales this generation due to HDTV functionality built into the systems. He argues that consumers who might purchase the Xbox 360 or PlayStation 3 are more likely to buy the Wii not only because of the lower price point, but because of the subsequent HDTV purchase price. "Expect most consumers to defer purchasing a PS3 or an Xbox 360 until they have purchased an HD monitor," Pachter explains. Though we're not convinced that the same folks who would be purchasing an Xbox 360 or a PS3 would be running out to buy a Nintendo Wii in every case, we digress. What say you, Joystiq Biomass?
Pachter: PlayStation software sales will account for 31% of all games sold worldwide in 2009
Although Wedbush Morgan analyst, Michael Pachter, predicts PS2 will become somewhat irrelevant in 2009, he doesn't discount the combined strength of the PlayStation brand. He remains optimistic for the entire PlayStation family as he expects "software sales for Sony consoles to account for 31% of all game software sold worldwide."Pachter indicated in Wedbush's annual Interactive Industry Report that, while the numbers have been dwindling for PS2, overall worldwide software sales for PS3 titles have more than doubled within the last year. In 2008, 62.4 million units of PS3 software titles have been sold -- a huge step up from the 29.6 million units sold in 2007. The momentum of this growth will carry into 2009, according to Pachter, who believes PS3 and PSP titles (the latter of which only saw a 15% increase in worldwide sales last year) will pick up PS2's slack. PS3 titles will be the top sellers, despite the fact that Pachter predicts Sony won't "secure significant third party exclusivity" as it continues "to focus its internal development efforts on blockbuster games." It's interesting to note, in light of another report, this strategy hasn't really worked out for Sony.
Pachter: Mobile games are a fad, EA's emphasis on sector 'misplaced'
Some people in the video game industry predict the mobile games business could eventually grow to topple the handheld gaming market, Wedbush Morgan disagrees. In its July industry report, analyst Michael Pachter estimates the mobile games industry is currently closer to $2 billion and, even with expected growth, the market may only expand to $4-6 billion in the next three to five years. In a section titled "Mobile Phone Games are a Fad," Pachter explains that, while 1 billion iPhone applications have been downloaded across 31 million Apple products sold, "it is not evident that more than 20% of these downloads are games." Suggesting the iTunes App Store has generated "under $400 million in game downloads" in its first year. Pachter does predict the mobile game industry will grow at 25% per year for a few years, but will eventually fall as competing devices enter the market. The report also calls Electronic Arts' emphasis on mobile games "misplaced." EA Mobile has grown steadily over the last few years, but the report estimates the mobile games division is -- along with that of competitors Gameloft and GLU Mobile -- "barely profitable." According to the report, finger pointing in Apple's camp should directed toward the "open forum" structure of the store and Apple's business model. Apple runs the game download service for an estimated 30% fee, leaving 70% to the game's publisher, the report claims. The section on mobile games goes on to conclude that handheld systems, like the new PSP Go, will "maintain its niche, without significant cannibalization" from the mobile games industry.
Pachter: Current console cycle to go on and on, expect lots of SKUs
Wedbush Morgan's Michael Pachter already told us about the inevitable WiiHD (inevitable to him, anyway), and that he thinks this cycle will be the last, and in his massive 201-page report Wedbush Morgan sent out recently, he reiterates both, but pointed out that this console cycle will outlast any other in history's past due to two things: HD displays and console SKUs.Pointing to the small adoption rates for HD displays, Pachter says that unless consumers start coming out in droves to pick up HD displays, these consumers aren't going to feel compelled to pick up a HD-compatible console (or upgrade from their Wii). This, he feels, adds longevity to the current cycle, stating that current-generation console sales will go long tail, and says that the lower-than-expected adoption rates for consoles suggests a longevity not seen in the past. He also suggests that the increased developmental costs of this generation will cause developers and publishers to milk this generation for all its worth, extending its life that much more. And, due to this, Pachter believes that console sales won't reach their peak until early next decade, when HD adoption rates will also supposedly hit their peak. And speaking of higher costs, manufacturers are looking to cut costs, and that's where the value of optional SKUs comes in. Pachter points out that as console manufacturers come up with new ways to cut corners, they will offer SKUs taking advantage of this. Pachter points to the PS3 Slim as an obvious release for later this year, and the numerous different packages we've seen offered for the Xbox 360 as examples of this new mentality.
Pachter: Crysis via OnLive like 'playing on a fully-optimized gaming PC'
No, it's okay. You can read that again. According to a report released by Wedbush Morgan's Michael Pachter, the company was given a demo of streaming game service OnLive this past March. Pachter states that latency between the user and OnLive's servers is supposed to be no more than 80 milliseconds, while the games he demoed were running at 25 milliseconds. While Pachter isn't certain if OnLive will "dominate any time soon" he believes that the micro console's video conferencing feature "will likely attract widespread demand." (Wait, it plays Crysis like a gaming PC and it's video conferencing that will sell this thing?)Pachter states that OnLive should appeal to families that have yet to buy into the current generation of consoles, especially if the service is priced right. The sweet spot, apparently, is right around $5 a month. A higher price could be met with "consumer resistance," says Pachter. Furthermore, Pachter is already predicting that OnLive may not last long as a standalone service, suggesting that it might be purchased by another company and offered as "part of an expanded service offering." For example, Microsoft could purchase the company to further expand the Xbox as an entertainment hub -- Pachter notes Microsoft's previous acquisition of WebTV, which was co-founded by OnLive CEO Steve Perlman. That's assuming neither Apple nor Verizon beat Microsoft to the punch, of course.It's too early for us to say if any of this will come to pass -- we're not analysts, after all -- but we were certainly impressed with our own OnLive experience. Still, until we can plug OnLive into our internet and play Crysis for ourselves, we're a bit skeptical. That's okay though, because we're supposed to be.
Pachter: WiiHD still coming, Xbox in third by 2015
Wedbush Morgan analyst Michael Pachter is no stranger to the gaming scene. In fact, it's his job to guesstimate, speculate, and estiguess on all things gaming, and in his latest report (via IndustryGamers), he paints the future for all three console manufacturers. First up is Nintendo, a company that Pachter believes will remain in the top spot throughout this console generation. Due to the Wii's "low price point, innovative control mechanism, and compatibility with standard definition televisions." Pachter thinks that Nintendo will rest easy atop the gaming mountain. And he thinks the Wii HD is a big part of it, as Pachter firmly believes Nintendo will introduce a HD-compatible Wii at some point, even as early as next year.Then there's Sony and its PS3. Pointing to Sony's win in the Blu-ray vs HD DVD war, Pachter says the PS3 will capture "significant market share" through this alone, and says the company will take second place. Regardless, Pachter sees the PS3 and Xbox 360 sharing very similar market share at the conclusion of this generation.Moving on to Microsoft, Pachter believes the company will end this generation in third, largely due to the console's inability to sell in Japan. Pachter downplays the "losing" angle, however, stating that he believes Microsoft will sell twice as many Xbox 360s as the company did the original Xbox, which, granted it actually happens, would be a nice feather in Microsoft's cap.
Pachter: Last.fm, Twitter the most important features of E3
What was the biggest news of E3? Was it the PlayStation Motion Controller? Project Natal? The triumphant return of Samus? According to Wedbush Morgan analyst Michael Pachter, it was none of the above. As part of the Gamasutra Analyze This feature, Pacther stated that he believes the biggest announcement was actually Microsoft's injection of Last.fm, Facebook and Twitter into the Xbox 360 dashboard.Pachter states that Microsoft's announcement was "far and away the most important one of the show," and one that the media failed to latch onto. Pachter says that Microsoft's ultimate goal is to solidify the Xbox 360 as "a functioning computer that happens to be located in the living room and is connected to the television." The Facebook, Last.fm and Twitter applications open the Xbox to the internet -- if only in a limited way -- moving it one step closer to the mythical, do-everything set-top-box we've been hearing about since the days of WebTV.The analyst makes this point in reference to Apple, which hasn't managed (successfully) to do the same thing with AppleTV. Granted, that doesn't make much difference to gamers, but from a pure business perspective, we can see Pachter's point.
The industry chimes in on the importance of reviews for Wii games
Various industry figures have come out in support of Peter Moore's claims that review scores don't impact the success of Wii games. One developer told Eurogamer that how a Wii game does is contingent entirely upon marketing, calling Wii games "pure risk." "A lot of these games that you think are the perfect game for Wii don't sell because companies don't have the money to market them," the developer said. "Whereas Nintendo is spending gazillions of dollars marketing their games."Michael Pachter suggested that review scores aren't important because many Wii owners don't read reviews. ""I think that Metacritic scores are irrelevant for people who don't look at them - how's that for obvious?" Pachter said. "While there are many Wii owners who are hardcore and who care very much about scores, there are many - perhaps half - who are quite casual, and wouldn't know Metacritic if it fell on them." He offered games like Carnival Games and Jillian Michaels Fitness Ultimatum as examples of successful titles with little critical acclaim.However, 2D Boy's Kyle Gabler offers an instance in which Metacritic scores and reviews do make a difference: indie games, like his own World of Goo, which happens to be the third highest-rated game on Wii. He compares mainstream games to Will Smith movies, which draw audiences without reviews."But for indie guys like us, Metacritic and review scores matter a lot," Gabler said. "In fact we link directly to them from our web site. So does Steam. It makes a lot of sense - potential players don't feel comfortable dishing out cash for some random unknown indie game without an aggregate thumbs-up from solid reviewers."
Pachter: Wii price drop coming before the holiday
Michael Pachter loves low prices. First he does flip floppings around the PSP Go's price and now he's predicting a Wii price drop later this year. He notes that "Wii supply has finally exceeded demand," and that he "expect[s] Nintendo to cut the price of the Wii before [the] holiday." If true, this would be the first price drop since the Wii's release in late 2006.Alternatively, Nintendo could simply bundle the system with software in order to persuade people to buy the system. Wii Sports was a good enough selling point back in ought-six, so why not a Wii, Wii Sports Resort and Wii MotionPlus bundle? Still, Pachter's pretty well known around these parts, so he's bound to be right. Who knows, maybe the price drop will arrive just in time for the Wii HD announcement, right Michael?
Pachter: PS3 price cut could cost Sony $350 million
A PS3 price drop is an inevitability. The only questions are when, and how much. While it may seem like a no-brainer, Sony must carefully plan out a price drop if it wants to get anywhere near its goal for profitability. Outspoken analyst Michael Pachter notes that Sony could lose $350 million of profits on a price cut of just $50 (accounting for 6-7 million systems sold after a reduction). While a cut to $299 would be far more palpable to gamers, that would cost the company at least twice as much -- would Sony want to incur those losses during a difficult financial market?Considering the exorbitant price tag on a price cut, it's likely Sony will choose the smallest cut possible. Pachter suggests that a $350 bundle, which includes a first party game (such as Killzone 2) is the likeliest solution for the company, predicting the drop will happen in October -- just in time for the holiday season.
Pachter apologizes for comments about PSP Go's rip-off price
Michael Pachter has stated he "sincerely" regrets commenting that Sony is ripping off consumers with the PSP Go's $250 price point. In an interview with IndustryGamers, Pachter takes the opportunity at the end to say that he doesn't believe Sony is doing anything nefarious and has "the right to price its products at a point that they think is competitive." He states the company is pricing the handheld to be competitive with the iPod Touch and that the PSP Go "arguably has much more value than the Apple product."Hmm, as much as we respect Present Pachter's opinion, Past Pachter was a little more on the ball with the consumer's perspective of the PSP Go's pricing. Past Pachter noted, "The $169 PSP-3000 is a profitable device -- the disc assembly, for a UMD, costs more than 16 gigs of flash does. So this new device doesn't cost them as much as the PSP-3000 and they jack the price up $80?" It seems Past Pachter was viewing the product through consumer eyes, while Present Pachter is in business mode and wearing the glasses of the Wedbush Morgan analyst Michael Pachter.%Gallery-64545%
Pachter says Sony is 'ripping off' consumers with PSP Go
Wedbush Morgan analyst Michael Pachter hates the PSP Go. Alright, alright, he doesn't quite hate it, but he does despise its price point. On a recent episode of Bonus Round, Pachter matter of factly states, "$249 is too much. Period." He goes on to say that while the handheld is priced to compete with Apple's $229 8GB iPod Touch, it doesn't deliver the iTunes App Store or downloadable music from iTunes (as conveniently, at least, as the iPod Touch). Furthermore, he posits the $250 price of the PSP Go is vastly overinflated considering its contents, claiming it costs Sony less to build and ship the PSP Go than the PSP-3000 model, "The $169 PSP-3000 is a profitable device -- the disc assembly, for a UMD, costs more than 16 gigs of flash does. So this new device doesn't cost them as much as the PSP-3000 and they jack the price up $80?" When Keighley presses Pachter as to whether Sony is "ripping off" the consumer or not, he answers, "They're rippin' off the consumer ... they're making a lot more money on the PSP Go than the PSP-3000."%Gallery-64545%
Take-Two takes $100 million in 'convertible senior notes,' we poke Pachter to explain
Take-Two announced today it intends to offer $100 million of "convertible senior notes" due in 2014. We have not a clue what that means, so we contacted Wedbush Morgan analyst Michael Pachter, who not only is a master of prognostication, but apparently knows quite a fair share about business (for real!). Pachter explains: Convertible - "Means that the debt can be repaid with stock at the borrower's option." Senior -- "Means that it stands in line ahead of all other debt in the case of bankruptcy -- not likely, but it makes the interest rate lower." Note -- "Is debt." Pachter explains it appears to him that the company is borrowing for a five year term in order to repay its line of credit, which has a high interest rate. That leaves the line of credit available to take if Take-Two ever needs "cash in the future for operations or acquisitions."Thanks, Michael! [Image]
Analysts predict over ten million sales for MotionPlus
Both Wedbush Morgan analyst Michael Pachter and EEDAR analyst Jesse Divnich expect the Wii MotionPlus peripheral to achieve sales of around ten million units in the US and Europe. The two just disagree on how long it will take. Pachter believes that the sales will happen early on, driven by bundles of early MotionPlus compatible software: "I think around 20 percent of Wii owners in the US and Europe will have bought Wii Sports Resort, Tiger Woods PGA Tour 10 or EA Sports Grand Slam Tennis," Pachter told Edge, "so that's around eight million." He added, "I think another two million will buy MotionPlus with new consoles."Divnich thinks three million units will sell through this holiday season, but it will take an additional year to achieve the ten-million-plus level of sales. "For the Wii MotionPlus, we currently expect the install base to reach over 11 million units by the end of Nintendo's next fiscal year in March 2011, a 15 percent penetration."Both analysts think Red Steel 2 is a risk that could pay off for Ubisoft. "Red Steel 2 may come along at precisely the right time, around when people are ready for another [MotionPlus] game," Pachter said. "The risk is really more a function of competition, compounded by the risk that Ubisoft could make a bad game." Both analysts believe that Red Steel 2 will be bundled with a MotionPlus.
Analysts: US game sales slump to continue until second half of '09
The go-to game industry analysts see the downward sales in March as a trend that could continue over the next several months. Wedbush Morgan's Michael Pachter notes that hardware sales were down 19 percent year-over-year and he doesn't see a reversal of software sales in the "near term." Lazard Capital's Colin Sebastian is concerned that the industry continues to see sales "concentrated among a small group of top-tier software publishers and first-party platform holders." He believes this leaves little room for ... well, anyone else in the near future.Both gurus see the second half of the year working out better for the industry. Edge notes that US industry sales have hit $4.25 billion during the first quarter, the same place they were during 2008's record-breaking year. [Image]
Pachter calls March Wii console sales 'somewhat disconcerting'
Michael Pachter, analyst for Wedbush Morgan, isn't freaking out, and he wants you to know that you shouldn't be either. He notes, while speaking on the subject of March NPD numbers, that even though the month saw hardware sales numbers drop across the board, that really has more to do with extraordinary sales for all comparable months. Speaking with GameSpot, Pachter said, "It's entirely possible that we were just up against an impossible comparison ... we're looking at a comparison to Grand Theft Auto IV in April, so it's likely that April will be down as well," referring to the release of Super Smash Bros. Brawl in March of 2008 and the subsequent month's GTAIV. What he does find worrisome, however, is declining Wii software sales after a year of strong console sales, reportedly doubling the system's installed-base. "Given that the installed base of Wii consoles has doubled in the past year, we find it remarkable (and somewhat disconcerting) that Wii software sales were actually down year-over-year in March, dropping by $72 million, or 26 percent." Pachter doesn't see the future as grim though, pointing out that this summer's release of Wii MotionPlus and Wii Sports Resort should put some wind back in Nintendo's sales sails. We'll just have to wait 'til August NPDs are released to find out!Source 1 - GameDailySource 2 - GameSpot
Pachter says this console generation is the last
Micheal Pachter foresees a world without console wars, calling the current crop of hardware "the last generation of consoles." The ballsy claim was made during GamesBeat 2009, a conference going on in parallel to GDC, where the Wedbush Morgan analyst reportedly declared that the future belonged to a "standard delivery platform" instead.According to 1UP, Pachter based his claims on the rising cost of console game development, stating that third-party publishers "are not going to support a PS4 or Xbox 720." His opinion, however, was not shared by fellow analysts David Cole and Colin Sebastian, who instead believe we can expect new hardware in 2012, though all three soothsayers agree that should this come to pass, Sony will drag its feet in getting something new onto store shelves. But how long will Sony loyalists have to wait for a new fix? According to the "Church of Pachter," don't expect Sony's fourth-coming until sometime around 2015, coincidentally the same year the aliens attack.
Pachter: February NPD impact 'limited,' industry 'highly recession-resistant'
Oh Michael Pachter, you're just like my mother, she's never satisfied. Wedbush Morgan's resident palm reader feels that despite the industry's pocketing of nearly $734 million last month, he expects "limited market reaction" to February's seemingly triumphant sales data. Pachter calls the sales growth "quite respectable" overall, but finds little to celebrate with giants like Electronic Arts and THQ suffering a financial beating at the cash register.Looking for the silver lining, the analyst told investors in a note that "concerns about the economy are likely to limit share price appreciation," but that steady hardware sales demonstrate strong game sales "well into 2009." Interestingly, Pachter also called the software industry "highly recession-resistant," though we imagine some on the unemployment line might have something to say about that.
