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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!

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.]

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.

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: 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.

Top brands of 2008 owned by Nintendo, EA, Activision, and not Sony

Wedbush Morgan Securities' 2009 industry report includes a list of the top thirty brands of 2008. The report notes that of the companies whose brands appear on the list, Nintendo, EA, and Activision were the only three with more than one brand to generate over $100 million at retail in the US last year.

And boy, did they. The top brand of the year, Guitar Hero -- perhaps you've heard of it -- was responsible for $992 million in US sales in 2008. The next two brands, Mario Bros. and Rock Band, generated $761 million and $662 million, respectively.

One company is notably absent from the top brands list: "Most strikingly," the report reads, "Sony had no top 30 brands for the third year in a row." Microsoft had two brands on the list (Gears of War and Fable) and Nintendo had four (Mario Bros., Wii Fit, Wii Play, and Pokémon). See the list of brands after the break.

Continued →

Pachter: PS2 software sales to become 'almost irrelevant' in 2009


Despite the fact that the PS2 saw a sizable price cut just three months ago, Michael Pachter is claiming that the system is nearing the point of complete insignificance. In Wedbush's "2009 Interactive Industry Report," Pachter explains that he expects "PS2 software sales to decline sufficiently (around 64%) to be almost irrelevant to overall software sales growth, with PS2 software comprising less than 4% of overall software sales in 2009."

Sony's probably not ready to give up on its most cost-efficient console, but as history has proven, nothing gold can stay in the fast-paced, constantly evolving world of video gaming hardware.

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: 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 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: PSP Go

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!

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.

Pachter sees potential in EA Sports Active, dismisses Spore


Wedbush Morgan diva analyst extraordinaire Michael Pachter, the man who finds the idea of Apple buying Electronic Arts "retarded," is confident about EA's gaming lineup -- particularly on the Wii -- and is raising the company's stock expectation to $27 (currently $20). Using the royal We, His Analytical Lordship was particularly impressed by EA Sports Active and Tiger Woods, which He sees becoming "blockbusters" on the Wii.

Of course, Pachter can't show his love without asserting his authority with a beating. Warhammer and Spore were graciously cut with love by the soothsayer. He remains skeptical about Warhammer Online's potential, stating that with 300,000 subscribers the game is probably only making about $10 million in profit (which didn't save many staff members) and estimates the game would break even in operating cost if it dips to about 250,000 subscribers. Pachter also isn't confident about EA's attempts to turn Spore into a franchise, noting that that the game "sold about as well as a typical SpongeBob game." Yeah, that's got to sting a little.

Update: Pachter let us know he writes his reports with Edward Woo. So, our loving crack about the royal We wasn't accurate. There goes our image of Pachter in full Elizabeth I garb. So sad.

Analyst: Next console cycle isn't coming until 2013


Compared to last Spring's outlandish software sales figures (fueled by the release of Super Smash Bros. Brawl and GTA IV), this year's stats aren't inspiring much confidence in gaming industry investors. In fact, many are anxiously awaiting the launch of new hardware to provide a quick sales boost -- but according to industry analyst Michael Pachter, they shouldn't hold their breath: By his estimation, new hardware won't be hitting store shelves until at least 2013.

Pachter said that publishers would be hesitant to adopt new hardware considering their investments in the current console cycle have yet to adequately pay off. There's one exception -- Pachter expects the oft-rumored high-definition Wii may appear some time in 2010.

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