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Pachter: Nintendo in disarray, blown it with Wii U.

theBishop

Banned
Nintendo is in disarray because they waited too long to launch the Wii U. I know that this sounds like (and is) sour grapes because they didn't launch the Wii HD in 2009 or 2010 as I "predicted". They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren't financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80% in the last few years, and the market has appreciated over the same period. 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.

This paragraph is far more sensible in my opinion. But it's still an open question where WiiU's tech will land. I expect it to be in the realm of 360/PS3, and the 2012 launch does seem too late to have a big impact.

I find much of the financially-minded analysis of videogames to be too fatalistic. There's always a presumption that current trends will continue indefinitely, and it rarely seems to hold up. There's always the potential for some unexpected game to come out and shake everything up, regardless of the platform.
 

Berordn

Member
Actually isn't it just Ipads that have had explosive growth not tablets in general? People buy them because they're cool

It's a shame netbooks are dying because a netbook with a touch screen seems to me a far far more practical device than a tablet will ever be

The problem with that is that there's no OS that supports a decent hybrid mode. By the time Windows 8 hits the market for that will have probably died too.
 

ULTROS!

People seem to like me because I am polite and I am rarely late. I like to eat ice cream and I really enjoy a nice pair of slacks.
Actually isn't it just Ipads that have had explosive growth not tablets in general? People buy them because they're cool

It's a shame netbooks are dying because a netbook with a touch screen seems to me a far far more practical device than a tablet will ever be

I know Samsung Galaxy is doing ok.
 
My speech was about the potential for growth of social gaming. I am pretty sure it was taped and posted on gamerlive.tv

The Wii U comment was in response to a question about the potential for the Wii U.

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. The "other" platform may have been Facebook games, smart phone games, tablet games, or one of the other consoles, but once they moved on, they are not likely to come back.

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.

Summing this up, 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. I know that this sounds like (and is) sour grapes because they didn't launch the Wii HD in 2009 or 2010 as I "predicted". They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren't financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80% in the last few years, and the market has appreciated over the same period. 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.

If the context above infuriates you, go back to school and pay attention, then read it again ;-)

dat ether
 

massoluk

Banned
The response is much more sensible, but I'm not exactly convinced that you basically declared WiiU dead because of XBox Kinect is out.
 
Pachter jokes are so last gen.. Oh wait!


Is there a reason Wii U can't be $249?

It is the price point I had a predicted a while ago.. $249 is Nintendo's target audience. $299 is not, unless Nintendo thinks that pent up demand for a new console from the core market segment will fuel holiday demand?

I'm not sure why people keep thinking $250 is possible. Nintendo have said so themselves that this will be an "expensive" system. Why say so if it wasn't going to launch at more than their consoles have historically launched, i.e. $200-$250? It's not gonna be a fiveninetynineusdollars type situation, but don't expect it to launch at $250 with a price drop 7 months later either. Unless you're one of those "trolololol it's only gonna be like 1.5x xbox 360 durr hurr cuz itz nintendo durr hurr" people, this system will launch at $350. $400 is sticker shock territory. $300 is lowballing it a bit considering the controller tech, but it could possibly go that low.
 
I laughed when he said it HAD to launch at 250$.

The price he said was too LOW for the 3DS.

I guess it's possible the Wii U could be 250$ but I doubt it, I'd say 300-350$.
 

Massa

Member
I'm not sure why people keep thinking $250 is possible. Nintendo have said so themselves that this will be an "expensive" system. Why say so if it wasn't going to launch at more than their consoles have historically launched, i.e. $200-$250? It's not gonna be a fiveninetynineusdollars type situation, but don't expect it to launch at $250 with a price drop 7 months later either. Unless you're one of those "trolololol it's only gonna be like 1.5x xbox 360 durr hurr cuz itz nintendo durr hurr" people, this system will launch at $350. $400 is sticker shock territory. $300 is lowballing it a bit considering the controller tech, but it could possibly go that low.

Nintendo said it would be an expensive system before the 3DS had a 40% price cut.
 

aeolist

Banned
The problem with that is that there's no OS that supports a decent hybrid mode. By the time Windows 8 hits the market for that will have probably died too.

The tablet and smartphone markets are still miniscule compared to the desktop/laptop and feature phone markets respectively. There's a lot of room to grow and a lot of untapped potential, nothing has been decided yet and nobody has a stranglehold on anything.
 

ULTROS!

People seem to like me because I am polite and I am rarely late. I like to eat ice cream and I really enjoy a nice pair of slacks.
I'm going to guess 399-449 for the WiiU. I dunno but that setup definitely does not look cheap to me.
 
I'm not sure why people keep thinking $250 is possible. Nintendo have said so themselves that this will be an "expensive" system. Why say so if it wasn't going to launch at more than their consoles have historically launched, i.e. $200-$250? It's not gonna be a fiveninetynineusdollars type situation, but don't expect it to launch at $250 with a price drop 7 months later either. Unless you're one of those "trolololol it's only gonna be like 1.5x xbox 360 durr hurr cuz itz nintendo durr hurr" people, this system will launch at $350. $400 is sticker shock territory. $300 is lowballing it a bit considering the controller tech, but it could possibly go that low.

Weren't the comments about it being an expensive console before the 3ds price cut? I think nintendo have learned a lot since then, I'm personally thinking $299 with the console just about breaking even (or more likely taking a tiny loss) though $249 is possible with them taking a bigger (though still not huge) loss, I'm thinking they'll decide after e3 and see what the hype levels are though a risky strategy as although it worked for the Wii it failed spectacularly with 3ds
 
so basically

I predict "Spielberg will direct a reality show because his next movie might or might not bomb"
Spielberg doesn't direct the reality show
I say "Well he should have because his latest movie is bombing"

I mean, the fuck?
 

michaelpachter

He speaks, and we freak
Out of interest, why is the word 'predicted' in inverted commas? There is no ambiguity as far as I can tell.

Because I didn't predict that they would launch a Wii HD. I said quite clearly on multiple occasions that "if they were concerned about loss of market share for the Wii to HD devices, they should launch a Wii HD", and I said that I thought they were rational business people interested in making a profit, so it was likely that they "would" do what they "should" do.

My mistake was in predicting that they would behave as rational business people and avoid generating losses. They acted too late, the Wii/DS bubbles burst, and they started generating losses. In other words, I don't think they behaved rationally, as I think they believed that the Wii bubble would last, and that the DS would continue to sell well and fund the development of the next generation console in 2012, when they were ready to release it. Iwata's comments at GDC 2011 show that he didn't accept cannibalization of handhelds by smart phones, even at that late date.

Somebody asked about the impact of the Yen's appreciation, which contributed around 35 - 40% of the decline in sales, but certainly not 100%.

Any of you are welcome to apply for my job, but I suggest you stay in school as long as possible and pay attention before you apply ;-)
 

shira

Member
My speech was about the potential for growth of social gaming. I am pretty sure it was taped and posted on gamerlive.tv

The Wii U comment was in response to a question about the potential for the Wii U.

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. The "other" platform may have been Facebook games, smart phone games, tablet games, or one of the other consoles, but once they moved on, they are not likely to come back.

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.

Summing this up, 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. I know that this sounds like (and is) sour grapes because they didn't launch the Wii HD in 2009 or 2010 as I "predicted". They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren't financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80% in the last few years, and the market has appreciated over the same period. 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.

If the context above infuriates you, go back to school and pay attention, then read it again ;-)
Nail in the coffin. GG Nintendo you are out.

Oh wait he's always wrong. Buybuybuy
 
Summing this up, 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. I know that this sounds like (and is) sour grapes because they didn't launch the Wii HD in 2009 or 2010 as I "predicted". They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES.
Feel like we should relaunch the thread based off your post.

I think you're likely right about the market range for Nintendo. But I do feel it was clear pretty quickly that the success of the Wii would be very hard/impossible to replicate.

By 2009 momentum had dried up for the console (where your WiiHD came in I assume).
 
it's funny because I found this

""Nintendo has to overcome that," says Wedbush Morgan Securities analyst Michael Pachter, predicting that a beefed up, high-definition Wii console is in on the horizon.

"A Wii HD would really position Nintendo well, which is why I'm absolutely convinced there is a Wii HD coming. Businesswise, they can't have people saying that their machine is a toy for my mom.""

http://afp.google.com/article/ALeqM5iF5irB5beGWHk2e4lIsWO1Ufsidg
 
Nintendo strikes me as a slave to tradition: launch a new home console every 5 years. From the Super NES to the Wii, it's been like clockwork. It's been typical to see a slight hardware revision mid-cycle, but not on the scale of upgrading to HD visuals. The Wii U has always been the "Wii HD" and the only real surprise, at least for me, is that it wasn't out for Black Friday in 2011.
 

Aguila

#ICONIC
Nintendo has previously stated (both Iwata and Reggie) that the Wii U is not going to be cheap.

This is what Reggie said:
The market is going to continue to differentiate based on the types of experiences that consumers want. As an example, if I’m the head of a household of a family of four, and my disposable income is $50,000 to $60,000, I’m going to continue to look at the Wii because of the software, and it’s a great entertainment device. For consumers who want to have the latest gadgets and have a higher disposable income, that’s for the Wii U.
http://allthingsd.com/20111222/nint...iday-and-says-what-he-really-thinks-of-zynga/

I'm thinking that Nintendo wants the two consoles to coexist at first. They'll lower the price of the Wii when the Wii U launches so that it can be the cheapest, most affordable console on the market. Meanwhile, the Wii U will be the more expensive option and it will attract the consumers who are always wanting the newest thing. Nintendo is also most likely expecting for the Wii consumers to see the Wii U as the next upgrade with the naming (like iPad to iPad2). This way, the huge amount of people who purchased Wii products will see the Wii U as a viable new console.

I believe that, in order for the Wii U to do good/great/amazing, it will have to depend on it's marketing. There is just so many types of demographics that Nintendo is trying to attract (hardcore/veteran gamers, casual gamers from Wii and Kinect, tablet gamers, kids, gradmas, etc.). They have to show how the Wii and Wii U are both similar and different, they have to show how unique and important the U-pad is, and they have to show games that will appeal to all of those demographics.
 
so basically

I predict "Spielberg will direct a reality show because his next movie might or might not bomb"
Spielberg doesn't direct the reality show
I say "Well he should have because his latest movie is bombing"

I mean, the fuck?

More like, "If you're looking to invest in movie companies, don't anticipate growth in Universal/Dreamworks on the back of War Horse and Tin Tin, as these aren't the experiences that consumers are really going to movies for these days. Wait for Jurassic Park 4 before you throw any money after Spielberg."
 
Feel like we should relaunch the thread based off your post.

I think you're likely right about the market range for Nintendo. But I do feel it was clear pretty quickly that the success of the Wii would be very hard/impossible to replicate.

By 2009 momentum had dried up for the console (where your WiiHD came in I assume).
It was still the best selling console worldwide in 2010 I believe.
 
Feel like we should relaunch the thread based off your post.

I think you're likely right about the market range for Nintendo. But I do feel it was clear pretty quickly that the success of the Wii would be very hard/impossible to replicate.

By 2009 momentum had dried up for the console (where your WiiHD came in I assume).

So Wii didn't sell incredibly well in 2010 despite it being its fourth/fifth year on the market?
 

Rhod

Member
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. The "other" platform may have been Facebook games, smart phone games, tablet games, or one of the other consoles, but once they moved on, they are not likely to come back.

Why would they be more loyal to the other platforms than they were to Wii?

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.

Unless someone makes some games they really want to play which are only on 3DS or PS Vita.

Nintendo's addressable market is probably also half of its former market.

That is around the size of Nintendo's addressable market before they made some interesting DS software which a lot more people wanted. So, what appeared to be the DS's addressable market was in fact much smaller than the actual addressable market.

I'm paid to advise investors, and none have made a profit owning Nintendo stock.

Even if this surprising claim is true, it is a misrepresentation to state that the Wii U timing is any sort of component in the current financial situation considering the movements in the exchange rates and the global economy.

It seems a little like you are using the massive drop in income from having 80% of sales outside Japan as a reason they should have spent a huge amount of money on a massive global roll-out of new hardware.

It doesn't seem likely that this would have led to anything other than deeper losses, and to suggest otherwise is to presume that a 'Wii HD' would have been what the market wanted. And at a time when Kinect and the 360 were really taking off, in fact. If the PS3 couldn't ably fight the 360 with similar software and the PlayStation brand this last year, why would an HD-upgraded Wii? It surely required more time to find something distinct.

They appear to have seen the need for that something distinct, rather than an evolutionary upgrade. Your suggestion that they *should* have launched a Wii HD is easy to make, yet its impact on a company profit/loss is impossible to prove. It's churlish to suggest otherwise. It's GAF crystal-ball gif territory in fact.

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.

But then, we don't know Nintendo's strategy. We are at the point in the original Wii's reveal before we had seen Wii Sports, or Miis. No one - not you, not even developers working on the system - knows the concept of Wii U. Predicting the addressable market is not only foolish, it is impossible.
 

m.i.s.

Banned
Is there a reason Wii U can't be $249?

It is the price point I had a predicted a while ago.. $249 is Nintendo's target audience. $299 is not, unless Nintendo thinks that pent up demand for a new console from the core market segment will fuel holiday demand?

Good man. You get it. $249 is definitely the mass market price for a Nintendo home system which typically lasts 5 years before the next system is launched. The reason why PS3 and 360 have lasted so long without a successor is because of the huge losses those two systems incurred in the early part of their lifecycle.

And, on a related note, yes, Nintendo is a year late with Wii U. That is incontestable.
 
Pachter is right sometimes, usually when he sticks to investor advice. When he thought that Nintendo would release a WiiHD, he was saying so because he thought that it would have made financial sense -- which, arguably, it would have, given Nintendo's paultry performance over the last three years. When he gets into the snuffy rumors of videogame hardware, software, and so on, he's less accurate and it infuriates fans. I think that he gets abused too much by videogame fans who want to think of him like another videogame journalist, which he isn't. And, to his credit, he's one of the only investment analysts who actually regularly talks about the videogame industry, instead of ignoring it.
 

shira

Member
Pachter is right sometimes, usually when he sticks to investor advice. When he gets into the snuffy rumors of videogame hardware, software, and so on, he's less accurate. I think that he gets abused too much by videogame fans who want to think of him like another videogame journalist, which he isn't. And, to his credit, he's one of the only investment analysts who actually regularly talks about the videogame industry, instead of ignoring it.
A --> B
 

aeolist

Banned
Because I didn't predict that they would launch a Wii HD. I said quite clearly on multiple occasions that "if they were concerned about loss of market share for the Wii to HD devices, they should launch a Wii HD", and I said that I thought they were rational business people interested in making a profit, so it was likely that they "would" do what they "should" do.

Oh boy a retcon
 
so we're going to completely ignore the simple fact that Wii's declining sales might be physiological?


Pachter is right sometimes, usually when he sticks to investor advice. When he thought that Nintendo would release a WiiHD, he was saying so because he thought that it would have made financial sense -- which, arguably, it would have, given Nintendo's paultry performance over the last three years. When he gets into the snuffy rumors of videogame hardware, software, and so on, he's less accurate and it infuriates fans. I think that he gets abused too much by videogame fans who want to think of him like another videogame journalist, which he isn't. And, to his credit, he's one of the only investment analysts who actually regularly talks about the videogame industry, instead of ignoring it.


don't worry it's not like we're going to double barrel him
 
Nintendo is in disarray because they waited too long to launch the Wii U. I know that this sounds like (and is) sour grapes because they didn't launch the Wii HD in 2009 or 2010 as I "predicted". They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren't financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80% in the last few years, and the market has appreciated over the same period. 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.

Sorry Michael, but I can't help feel that you've entirely misdiagnosed Nintendo's losses this year. Nintendo are still profitable on Wii hardware and software; heavily so, in fact. I very highly doubt that your mooted Wii HD, putting aside the practicalities of such a thing (it's a nice concept, but I can't really see a way it could be developed and sold), would have attracted much of a larger user base at all; consoles have ALWAYS been sold on the strength of software, as the 3DS has rather bluntly shown, and simply "adding HD" would have done not a damn thing. Nintendo's losses are mainly down to two big factors- the 3DS price cut (remind me about your prediction for that one again? ;)) and the Yen. Nintendo is extremely far from being the only one affected by the Yen; take almost every other large Japanese multinational by way of comparison. Couple this to smaller yet significant expenses like R&D and the new headquarters Nintendo's pumping cash into, and it seems to me that the lack of a HD console is pretty damn far from being Nintendo's primary source of losses.

I also think you're completely premature in calling WiiU a lost cause, too. As it stands, we know very little about this console; we know no software, nor it's graphical capabilities, nor anything of it's online network beyond the most basic of fundamentals. You're absolutely correct to state that the WiiU doesn't look like it'll succeed on the market, but you're wrong to state that it looks dead, because... well, it doesn't look like anything. Declaring it a preemptive failure neglects any console defining software; like declaring Wii a failure before Wii Sports was announced. I can understand your difficulties here; you're an analysist with very little to analyse. However, declaring it doomed to fail because we don't know the price, while ignoring the myriad other issues in play which we simply don't have an answer for, strikes me as somewhat premature.
 
MI 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. The "other" platform may have been Facebook games, smart phone games, tablet games, or one of the other consoles, but once they moved on, they are not likely to come back.

Well, then you are wrong and should update your picture of the Wii's current gaming audience.
The Wii's audience includes casual gamers, yes. But the way you say it is like the audience includes NOTHING ELSE, which is obviously wrong.
I won't say that the Wii's gaming audience consists of X% core gamers, Y% casual gamers and Z% grandmas and soccer moms, but I think it's a given that the amount of core gamers on either console, no matter what, is clearly higher than the amount of casual gamers, grandmas and soccer moms combined. So if I had to give percentages I would estimate that core gamers make out AT LEAST 70% (probably more like 80%) of the Wii's gaming audience, while casual gamers "who bought one or two Wii games in the first two years and then put it aside" are clearly the minority.

The Wii U is obviously targeting the so called "hardcore gamer" audience a lot more than the Wii did. As smoeone whose job as an "analyst of the gaming market" you should already know that.

So please, explain to me why you think that Nintendo wants to target the Facebook game audience with the Wii U.
 

dose

Member
Because I didn't predict that they would launch a Wii HD. I said quite clearly on multiple occasions that "if they were concerned about loss of market share for the Wii to HD devices, they should launch a Wii HD", and I said that I thought they were rational business people interested in making a profit, so it was likely that they "would" do what they "should" do.

“We do not expect a ‘new’ console in 2010, other than the long-rumoured high definition Wii, which is likely to upgrade the Wii to current console technology,” Pachter stated.
http://www.mcvuk.com/news/read/will-wii-2-hd-be-the-last-ever-console/012635
If that's not a prediction I don't know what is.
 

DrWong

Member
blabla

If the context above infuriates you, go back to school and pay attention, then read it again ;-)

Well, we take time to play games, I'm sure it helps to have correct predictions.

Sorry Michael, but I can't help feel that you've entirely misdiagnosed Nintendo's losses this year. Nintendo are still profitable on Wii hardware and software; heavily so, in fact. I very highly doubt that your mooted Wii HD, putting aside the practicalities of such a thing (it's a nice concept, but I can't really see a way it could be developed and sold), would have attracted much of a larger user base at all; consoles have ALWAYS been sold on the strength of software, as the 3DS has rather bluntly shown, and simply "adding HD" would have done not a damn thing. Nintendo's losses are mainly down to two big factors- the 3DS price cut (remind me about your prediction for that one again? ;)) and the Yen. Nintendo is extremely far from being the only one affected by the Yen; take almost every other large Japanese multinational by way of comparison. Couple this to smaller yet significant expenses like R&D and the new headquarters Nintendo's pumping cash into, and it seems to me that the lack of a HD console is pretty damn far from being Nintendo's primary source of losses.

I also think you're completely premature in calling WiiU a lost cause, too. As it stands, we know very little about this console; we know no software, nor it's graphical capabilities, nor anything of it's online network beyond the most basic of fundamentals. You're absolutely correct to state that the WiiU doesn't look like it'll succeed on the market, but you're wrong to state that it looks dead, because... well, it doesn't look like anything. Declaring it a preemptive failure neglects any console defining software; like declaring Wii a failure before Wii Sports was announced. I can understand your difficulties here; you're an analysist with very little to analyse. However, declaring it doomed to fail because we don't know the price, while ignoring the myriad other issues in play which we simply don't have an answer for, strikes me as somewhat premature.
I would have said "immature"... But you're right.
 

Biff

Member
It's hilarious how many are assuming his predictions are based on qualitative arguments rather than quantitative projections of future income statements.

He doesn't make these comments up out of thin air. They are backed by hundreds of hours put into models, with hours upon hours of interaction with company management. Sure he's been wrong. That's the nature of the profession. You put your neck out for your investors with bold calls; sometimes you're right, sometimes you're not. Nintendo isn't the only company he covers - we don't hear about the other times he's right.

Do you see what happens when one of us attempt to make numerical projections? Just take a look:

Bjoern the Smexy said:
The Wii's audience includes casual gamers, yes. But the way you say it is like the audience includes NOTHING ELSE, which is obviously wrong.
I won't say that the Wii's gaming audience consists of X% core gamers, Y% casual gamers and Z% grandmas and soccer moms, but I think it's a given that the amount of core gamers on either console, no matter what, is clearly higher than the amount of casual gamers, grandmas and soccer moms combined. So if I had to give percentages I would estimate that core gamers make out AT LEAST 70% (probably more like 80%) of the Wii's gaming audience, while casual gamers "who bought one or two Wii games in the first two years and then put it aside" are clearly the minority.
Jesus Christ. I know this doesn't represent GAF but in general, instead of insulting the man, you should thank him for his time (as he is the ONLY analyst who has direct dialogue with us... His insight is something regular investors pay a ton of money for...) and respond with a respectful, fact-based argument. Whether Exterminieren is right or wrong, see the following:

Sorry Michael, but I can't help feel that you've entirely misdiagnosed Nintendo's losses this year. Nintendo are still profitable on Wii hardware and software; heavily so, in fact. I very highly doubt that your mooted Wii HD, putting aside the practicalities of such a thing (it's a nice concept, but I can't really see a way it could be developed and sold), would have attracted much of a larger user base at all; consoles have ALWAYS been sold on the strength of software, as the 3DS has rather bluntly shown, and simply "adding HD" would have done not a damn thing. Nintendo's losses are mainly down to two big factors- the 3DS price cut (remind me about your prediction for that one again? ;)) and the Yen. Nintendo is extremely far from being the only one affected by the Yen; take almost every other large Japanese multinational by way of comparison. Couple this to smaller yet significant expenses like R&D and the new headquarters Nintendo's pumping cash into, and it seems to me that the lack of a HD console is pretty damn far from being Nintendo's primary source of losses.

I also think you're completely premature in calling WiiU a lost cause, too. As it stands, we know very little about this console; we know no software, nor it's graphical capabilities, nor anything of it's online network beyond the most basic of fundamentals. You're absolutely correct to state that the WiiU doesn't look like it'll succeed on the market, but you're wrong to state that it looks dead, because... well, it doesn't look like anything. Declaring it a preemptive failure neglects any console defining software; like declaring Wii a failure before Wii Sports was announced. I can understand your difficulties here; you're an analysist with very little to analyse. However, declaring it doomed to fail because we don't know the price, while ignoring the myriad other issues in play which we simply don't have an answer for, strikes me as somewhat premature.
 

Auto_aim1

MeisaMcCaffrey
Somebody asked about the impact of the Yen's appreciation, which contributed around 35 - 40% of the decline in sales, but certainly not 100%.
Thanks for the reply, Michael. So when you factor in 3DS' price cut, and the 35-40% decline in sales due to Yen's appreciation, don't you think, what you said about them making losses due to the Wii and DS slightly inaccurate?

But anyway, it's nice that you post here :D
 

aeolist

Banned
It's hilarious how many are assuming his predictions are based on qualitative arguments rather than quantitative projections of future income statements.

He doesn't make these comments up out of thin air. They are backed by hundreds of hours put into models, with hours upon hours of interaction with company management. Sure he's been wrong. That's the nature of the profession... You put your neck out for your investors with bold calls; sometimes you're right, sometimes you're not.

Do you see what happens when one of us attempt to make numerical projections? Just take a look:


Jesus Christ. I know this doesn't represent GAF but in general, instead of insulting the man, you should thank him for his time (as he is the ONLY analyst who has direct dialogue with us... His insight is something regular investors pay a ton of money for...) and respond with a respectful, fact-based argument.

I'm sure he does his job well or he probably wouldn't still have one.

When he's here or talking to Keighley or something like that he's not doing his job, he's trolling for fun.
 

lenovox1

Member
He doesn't make these comments up out of thin air. They are backed by hundreds of hours put into models, with hours upon hours of interaction with company management. Sure he's been wrong. That's the nature of the profession... You put your neck out for your investors with bold calls; sometimes you're right, sometimes you're not.

The problem with Michael's Wii U predictions is that we know nothing about the thing. Nobody's talking about it (because they're not allowed to), nobody has any final specs, nobody has any idea about what games are in development for it, we don't know anything about its features past a five minute demo reel. . . We've got nothing to go on with regards to how the Wii U could do in a business sense. He's basically pulling his prediction out of thin air.
 
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