Curmudgeon Gamer
Curmudgeoning all games equally.
15 November 2006
Analyst analyzes analysts' analyses
Michael Pachter makes a good guest in this week's podcast. He comes across as "a man who likes talking to a man who likes to talk" and goes on at length about various aspects of the Wii, Xbox 360, and PlayStation 3. In particular, I was intrigued by this bit:
I think that where most analysts are going to be not only proven wrong but are actually going to backtrack and change their opinions to the extreme is that the cost of the Wii at $249 is so dramatically much lower than the cost of the [Xbox] 360 or of a PS3 that many households are going to opt for a Wii first and wait for the others to come down in price before they buy a 360 or a PS3. [...]

I think what's going to happen is analysts are going to see the Wii selling at a much more rapid pace mid-year next year than anybody expected and they're actually going to call Nintendo the winner of this cycle.

And in fact, what I think is going to happen is, over time, Nintendo's sales are going to slow -- over time as in 2009, 2010 -- and Sony's sales are going to pick up as the PS3 comes down in price.

So I think Sony's going to look like the clear loser this cycle, come summer. I think Nintendo's going to look like the clear winner this cycle this coming summer, and that's going to be wrong. And it will reverse in 2009, 2010 when there are 5000 Blu-Ray movies available to rent at Blockbuster and when all the households who already have a Wii get their HD monitors and PS3 sales will pick up.
The part about choosing the Wii first is certainly plausible -- especially because of standard TV and the prices of HDTVs -- and it's a prediction I think we could easily check up on in 10-12 months. Will we be reading about Nintendo winning the war less than a year after their launch? That'd be fun, especially if you read videogame web forums. Then in two years we can see if Sony's made up ground and beating the competition, as he further predicts, making all those other analysts who declared a Nintendo victory for the generation wrong. Good times ahead, either way.

I've still got 15 minutes of the podcast to listen to, but that won't happen until tomorrow morning on the way to work. Perhaps there are some more interesting bits later on. I certainly enjoyed the first 30 minutes.

One question that hadn't been asked of Pachter that I'd like an answer to: Does he play games? It's pretty apparent he's got a feel for the business of games, but does he actually play them or is he just a detached observer watching numbers and analyzing technology trends in the abstract?

Update: Answer is that Pachter does play games and even plays them at work. In addition to what sounds like playing as part of his job, he mentions a Guitar Hero party they're having at his workplace. I should get Guitar Hero at some point, since I keep hearing such good things about it.

Update 2: Interesting to note that Pachter basically doesn't mention any specific way that the Xbox 360 wins. If Blu-Ray takes off (or HD-DVD doesn't succeed, take your pick) or the Sony PlayStation brand remains strong, then the PlayStation 3 wins. And Guitar Hero is the proof that the Wii's new control mechanism will be a hit with consumers. For Microsoft to win, I'm guessing he thinks that the other two have to fail, which isn't necessarily the same as Microsoft succeeding on its own strengths.

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--Matt Matthews at 20:08
Comment [ 4 ]

Comments on this post:

I've been saying all year that Wii will do well for Nintendo this generation; am I crazy, or were analysts dismissive about the DS also?

re: Guitar Hero, that's a great indicator I hadn't thought of.

By Anonymous Crusader, at 16 November, 2006 09:50  

I think Nintendo blew a great chance to dominate over the next couple of years by pricing the Wii too high. For what you get performance wise, $250 is too much for the Wii.

I'm very much a gameplay over graphics gamer and currently I only own a Gamecube. In a year or two, once developers get a handle on the PS3 and 360, games on the Wii will look antiquated. Graphics aren't just eye candy, although I love games like Mario Kart, the blurry graphics detract from gameplay.

By Anonymous Anonymous, at 16 November, 2006 12:16  

I have to say, I listened, and I couldn't believe that the interviewers didn't pounce on him a lot harder. A great many of his comments were just ... non-factual.

What I found most shocking was his defense for any error, "I'm very well paid to tell people what they want to hear today. They don't care if I'm wrong or right, and they don't listen to what I say anyway."

While it is certainly true that the analysis industry is a bunch of blind monkeys stumbling around a room filled with keyboards, I can assure you that they are definitely listened to. That's why they are paid well.

I was hoping that the interviewers would break down the interview afterward, but they didn't. Insane.

By Blogger Jeremy, at 16 November, 2006 13:04  

Seems a reasonable analysis on the surface. I was able to wholeheartedly recommend a Wii to a wife's friend who has an eight year old child who was wondering whether to queue up for a Wii or a PS3 this Christmas. I think it's very good value for the money, something I can't say about the PS3 (as a game machine, it is a highly affordable BR player (if you can fine one)).

I've wondered a few times if Nintendo considers the Wii a 'research platform', an inexpensive trojan horse they use to get the public used to their new interface scheme while they develop a more powerful version of it. Nintendo is known for releasing incrementally improved versions of their products, and rumors are already swirling about DVD enabled versions of the Wii, so we're already seeing hints that the Wii may see 'upgrades' of a sort down the line.

But graphics wise, it'll never compete with the PS3/360, which makes me wonder if Nintendo is waiting for graphics hardware equivalent to what's in the big boys to come down far enough in price that they could release a powerful console that could compete with the PS3/360 on a more even footing, in terms of both power and price, since the other two should be cheaper then. It may be possible to buy a new Nintendo system in three years and STILL have less invested in N products than buying one new PS3 w/accessories.

But that is purely speculation, of the highest order.

By Blogger BruceC, at 16 November, 2006 13:24  

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