“Nintendo in disarray” – Pachter defends remarks

27 February, 2012 - 9:50 pm by
About 3 mins to read

If you Google “Michael Pachter”, you’ll find his name littered across dozens of high and low brow websites and alongside his name is invariably a comment regarding Nintendo. He’s predicted, inaccurately, for an extensive period of time that Nintendo is failing. Whilst he is correct that Nintendo did this year make the biggest operating loss of it’s history, he today defended his claim that “Nintendo is in disarray”.

He made the claim at a speech at the Ayzenberg A-List Summit 2012, naturally his comments drew out commentators, especially at some more vocal communities. His response was somewhat lacklustre:

“I believe (and please feel free to disagree) that a large portion of the Wii audience comprised casual gamers – those who bought one or two games a year the first two years, then put the Wii aside – and that those casual gamers moved on to another platform.

At the same time, I believe (again, please feel free to disagree) that the growth of smart phones and tablets has attracted many potential dedicated handheld game customers, and these people also are unlikely to come back to either 3DS or PS Vita.

I think the addressable market for the Wii U is around half of the market for the Wii, and I think Microsoft and Sony will compete for a portion of that market if the Wii U is priced too high. I think that the dedicated handheld market is permanently impacted by smart phones and tablets, and think that Nintendo’s addressable market is probably also half of its former market.

Nintendo is in disarray because they waited too long to launch the Wii U. They should have, and because they didn’t, the decline in Wii and DS hardware and software sales drove them into generating losses.

I’m paid to advise investors, and none have made a profit owning Nintendo stock. I don’t think that many will make a profit over the next few years, because I don’t think Nintendo’s strategy will return them to profitability.”

Whilst technically he’s correct, he’s summing up nothing that any gamer, from almost any age can state. He naturally forgets to mention that Sony made a huge loss this year, and looking at the wider Eastern markets, so did the vast majority of other electrical suppliers in the region, Panasonic, Fuji, Nikon and Samsung just to name a few.

He further fails to note that the Vita has done amazingly well, the 3DS is growing at a faster pace than the DS, Facebook and “app” gaming have decreased in size year on year according to many sources and that ultimately, the Wii generation opened the world up to casual gaming. It’s highly unlikely that it’ll happen again due to the mobile gaming, but Nintendo, Sony and Xbox existed before mobile gaming and it’s doubtful that they won’t exist after mobile phones become phones inserted into your eye that controls your every move.

Source: MCVUK