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Analyst analyzes Sega’s analysis

June 15, 2007

Me and Scott Steinberg were wrong, apparently. Wedbush Morgan analyst Michael Pachter explains all:

“I think that a lot of people consider the Wii a “fad”, and attribute that conclusion to the type of people who have been attracted to the Wii so far. Sega, of course, has games like Sonic that resonate well with this audience, so I’m not singling them out as having an issue, but it appears to me that these non-traditional consumers baffle most of the publishers. As they are unaccustomed to dealing with them this early in the cycle, they have to justify their oversight in not anticipating the strength of the Wii with this group by labelling the group as having no staying power, resulting in the labelling of the Wii as a fad.”

OR, it could just be that Sega and others see their business being obsoleted by WWII vets. We see it, too, Mike.

I dunno, these two should just box it out, i think. There’s more.

“I can’t begin to imagine what is on the drawing board for the Wii, but I can say that most developers I’ve spoken with are extemely excited about the potential for the console… I believe that we’ve only just scratched the surface.

“Also, Scott’s analysis presupposes that we have seen the last in hardware innovation from Nintendo. I disagree. It’s easy to envision a Wii 2 in a couple of years that runs at full HD, and has both a Wii-mote and an analog controller, so that all games can be ported to it.

“If Nintendo were to introduce such a device, it would be fully comparable to the Xbox 360 – perhaps it wouldn’t have Blu-ray, so a comparison to the PS3 may be unfair – and would likely have most of the same third party content as the other two devices.”

Ok, sounds like a pretty picture. What else, Mr. P?

Pachter did agree with Steinberg that the PS3 “will ultimately come out on top”. Victory, he predicted, will be the result of a console price cut to USD 199 and the success of Blu-ray.

Price point is key, said Pachter – observing that 80 per cent of all Xboxes sold in the US were purchased for USD 199 or less, with the figure approximately the same for PlayStation 2.

“Sony is around 6 million units behind Microsoft, and should be able to make up the gap – barely – by 2009 if they price the console correctly. They will likely be 9 million units behind the Wii by the end of this year, so it may take a bit longer to catch Nintendo, likely 2011 or so,” Pachter concluded.

Analysts confound me.

Games Industry via GoNintendo

3 Comments leave one →
  1. June 15, 2007 6:13 pm

    You know, all the analysts that say that Sony’s PS3 will dominate the market as soon as they cut $100 or $200 off the price of their console always fail to analyze one little itsy-bitsy detail: Where the heck is Sony going to get the money from to subsidize $400 for every PS3 they sell for $400?? Wouldn’t that put them on the red for about two years??

  2. June 15, 2007 6:22 pm

    They’ve been there before, i guess is the answer you’d probably get. From what i’m hearing, Sony’s cutting down a number of costs in the manufacturing process, with the exclusion of hardware emulation and more efficient production of the blu-ray “diodes” and cell chips. The possibilities are… possible.

    As for me, i think any price cut of 100 bucks or more will take a load off their backs and double their sales. That’s not saying much, i know, but every unit counts.

  3. June 15, 2007 7:17 pm

    See, see? He agrees with me. Wii 2 in a few years. Or Wo. Whatever.

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