Michael Pachter is Wrong

rawr!

so, i just listened to the next-gen podcast with michael pachter in it. you know — the guy john smedley is [not] trying to bet?

so. i’m just going to run through a few thoughts of mine on the podcast. they might not make sense if you haven’t listened to it.

japan can support 30 million consoles?

no.

well. sure, at $299 per console they can. however, at $600? uh. no. for example, at $299 (yeah, i know they take percentage drops. that doesn’t matter for this tho as it’s a percentage — not a concrete number. meaning, the ps3 will never, ever, ever be $150 and still making money.) we’re looking at about US$9 billion for 30 million consoles in japan. now, push that up to this generation’s average of $400 per console?

yep. you got it: $12 billion.

that’s 30% more. so, people in japan have — suddenly — 30% more money? wait. where does hdtv upgrades fit into that?

no, michael. japan will not support 30 million of this next generation of consoles.

120 million consoles for us and europe?

1) japan is a shrinking game market.

2) europe is the fastest growing market.

3) the us is still growing.

4) almost 8 times as many people account for only 4 times the consoles?

japan has 127 million people. the us has 300 million. europe has 700 million. assuming japan is “saturated” since it’s declining, by his prediction for japan, that means 1 console for every 4 people. that means 250 million consoles should be the “saturation point” for the us and europe.

i don’t think it’ll be 250 million in this generation, but, i don’t think it’ll be 120 million either. expect well north of 120 million consoles in the americas and europe and slightly south of 30 million consoles in japan.

credibility? meh. “he said, i said” style debate.

japanese market first?

huh? primary market is japan? is that why the us has 2.5 times the population but is scheduled to get 4 times the consoles? (ha! actually, i suppose that may not be true either. heh. poor sony.)

credibility? sliding.

the wii is the same as the original xbox for programming?

i won’t even touch that one except to say the “raw power” may be similar to the original xbox (it’s actually more) but, programming for the original xbox was almost exactly the same as programming for a pc-based x86 platform — not the gamecube.

the wii is like programming for a gamecube, man. not an xbox. powerpc programming isn’t the same as x86 programming.

and, the graphics card is basically the same? hello? the xbox had an nvidia card. the wii? ati. (please refer to all the reasons why 360 back-compat games are emulated and not run natively.) they need new tools and new techniques to create wii games. i’d say the wii and original xbox can handle a similar “weight” of art assets, but, well — you have to recreate those for every game anyway.

damn. okay. i touched it….

credibility? shot to hell.

no more than 4 million subscribers for mmogs?

(keeping in mind his qualification that it apparently was in the us and europe) him trying to “wave off” the question by comparing wow numbers to his estimates is cute. well — at least it would be if wow didn’t only account for half of game subscriptions, michael.

credibility? shot to hell and in the toilet.

accurate stuff!

then he goes no to talk about how the wii is going to sell. he’s mostly correct except for the whole sony coming back thing.

microsoft head-fake? yep. more stuff that makes sense.

credibility? building back up a bit.

optical storage?

happily, he calls out on know about optical storage being enough. good job. 9 gigs is enough. sony’s wrong.

credibility? on the right track.

the “conspiracy?”

he participated in the conspiracy about microsoft holding back units at launch?

erg.

this is an easy one: money left on the table. especially with consoles selling for $1500 on ebay. no conspiracy, man. especially with their vaunted “race to 10 million units” they’ve been talking about.

credibilty? sigh….

pricing consoles lower?

mainstream adoption. for specific, “single-use” hardware, it needs a low price point. otherwise, why would you get a game machine when you can buy a pc and get a lot more flexibility with your purchase?

duh. consoles need to be a commodity. $1200 is not a commodity price.

well. and i suppose that the video game business is a software business and NOT a hardware business. hardware has anemic profit margins. just ask microsoft what software margins are like.

so. let’s see. how do you make back the money you spend on developing games? that’s right! sell millions of copies!

how do you sell millions of copies? that’s right! get millions units of your hardware out there!

how do you get millions of units of hardware out in the public? that’s right! price it at a loss to get it into as many hands as possible.

it’s the razor/razor blades thing, man. you know that.

it’s akin to “what if movie studios were the only ones who made dvd players?” don’t you think they’d practically give away their dvd players to get people to buy their movies?

mcfly? anyone home?

credibility? pissed on in the gutter.

now… the doozy. he only “works” 5 or 10 hours a week and gets paid handsomely?

this guy’s a tard. and he accused microsoft, sony and nintendo of being arrogant? arg!

credibility? none.

looking a bit farther out?

there’s not going to be a next generation as we know it? game design isn’t going to harness the hardware?

what on earth is this dork talking about? it’s called middleware, fool. the game designers aren’t harnessing it. it’s the tool developers who will. there are people trying to wring everything out of it they can. it has nothing to do with game designers anymore. there are business models in place that subsist on their ability to wring everything they can out of the hardware — not to make games, but to make the hardware perform.

the hardware will be wrung dry.

and, going forward, we’re going to need a crazy amount of more processor? why? procedural content. art resources and programming resources are going to come back into parity. it’ll be a fundamental shift in the way things are done.

more programming. less hand-created art.

credibility? well in the negatives.

michael pachter may have the connections, but, he doesn’t have the technical knowledge necessary to do the job of analyzing the game industry. financial, maybe. technical no.

we need a new analyst.

m3mnoch.

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9 comments so far

  1. m3mnoch on

    bah. looking back over that, it reads like horse’s ass.

    sorry about that guys. it was more of a stream of thought, “listen [pause] type furiously” sort of thing. lemme know if you want me to fix it or if it’s too garbled to follow.

    m3mnoch.

  2. m3mnoch on

    oh, and this comment in the “he’s making sense” part: “he’s mostly correct except for the whole sony coming back thing.”

    once sony falls behind, it cannot and will not come back with the ps3. there are a couple reasons why.

    1) the xbox and gamecube were able to make marginal headway against the ps2 because of price. the gamecube was cheap to make and the xbox could afford to lose money. the xbox was able to match the ps2 price drop for price drop — thus, getting hardware installed.

    that means the install base for the ps3 is going to be shit.

    2) with a shit install base, exclusives are limited. with the 360 getting and expanding its install base lead, even more software is going to come to it. the 360 after this christmas will be in coast-mode. a bigger install base means more exclusives.

    that means the ps3 will see almost nothing but ports and cross-platform titles that have more features on the 360 (aka call of duty 3)

    3) some people will argue about there will be no exclusives. fewer yes, but not all of them will go away. especially when the 360 will have better tools and a large install base. i mean, roboblitz the arcade game is using the unreal engine.

    xna, built in hardware support for procedural techniques and xbox live arcade will ensure a steady flow of exclusives and independent games “only on xbox 360.”

    m3mnoch.

  3. jvm on

    Two things together might be enough for Sony to come back.

    1. Xbox 360 is selling dismally outside of the U.S. In Europe, Down Under, and in Asia, it’s not doing well at all. This gives PS3 a much better chance in those territories.

    2. Those territories together are growing faster than the U.S. market.

    So Sony may still come out, but not because of the strength of the U.S. sales necessarily, but because of the weakness of Xbox 360 sales outside the U.S. and the strength of the Sony PlayStation brand (and the timing) in those non-U.S. areas.

    Sorry to scribble this so quickly. Gotta run.

  4. m3mnoch on

    “Xbox 360 is selling dismally outside of the U.S. In Europe, Down Under, and in Asia, it’s not doing well at all. This gives PS3 a much better chance in those territories.”

    huh?

    it’s ruling in europe. especially with microsoft courting them so very hard.
    http://www.eurogamer.net/article.php?article_id=62037

    and down under?
    http://www.vnunet.com/vnunet/news/2153084/xbox-launch-hit-australia

    so, yeah. those territories together are the bomb. it’s where you need to be as a console manufacturer these days. that’s, again, why microsoft is courting them so hard. look at all the european shows — microsoft has a huge presence. look at all the sound bytes coming out of microsoft these days — they are all from european heads. look at where they held x06.

    microsoft totally and completely understands they need europe and they are doing well there. sony? they’re pissing on europe.

    winning europe will seal this next generation deal.

    m3mnoch.

  5. Kane on

    have you ever been in europe? man for every Xbox sold here there are 200 PS2 sold, you go to a game store and you have 20m^2 for PS2 games and 2m^2 for Xbox games..

  6. Kane on

    PS2 – 111.25 millions
    Xbox – 24 millions
    Gamecube – 21.20 millions

  7. m3mnoch on

    1) yes. i’ve been to europe. several times, in fact.
    2) you realize that is the kind of “all your base are belong to us” spittle flying from the nintendo faithful when the n64 launched, right? at least back then the n64 didn’t cost twice what the ps1 did.
    m3mnoch.

  8. Kane on

    so what? 600€ is nothing, and besides, its all in the PS3, i told you before, X360 is more expensive goes beond 700€.

    you may have come here several times, but i live here in the old continent all my live, so i know how things work around here.
    nintendo has cosider to be “not cool” in europe for a very long time.
    i had a Super Nintendo and a Mega Drive back in the day, the snes had better games but i allways prefere playing in the md.
    Game Cube was a disaster in europe, and the wii is going to be even worst.
    the xbox is consider to be not cool too, Halo 2 is the only thing good about it, but after MS said “Halo 2 is the most sold game ever”..
    well what can i say, people were like LOLOLOLOLOL
    they forgot to say that was the most sold ON XBOX, not cool.
    Gran Turismo out sold Halo several times, i think every boby in europe has it or have played it, its huge here, don’t botter, no one cares about Forza, specialy after the official Xbox mag cames out writen on the cover “Microsoft brings the best races of the year” and inside they were constantly atacking GT, but in the end GT was better in every way, the only avantage that forza had was on-line play, but no one cared about that.

    ps. im glad you didn’t call me names and so, your not such a bad guy, maybe we can even change some ideas in a polite way, in every forum on the net its a war, insults every here. but not here im glad is that way.

  9. xXM0RD3C4IXx on

    i care about online gaming and so do alot of ppl in america i play online every day i dont mind paying for it i usually get it for free when i buy a game anyways xbox live arcade is heck of fun (Kane you should play) Halo is an awesome game it sold so many copies because people can play together i used to own a ps2 but i seemed to ignore games after i beat them but with halo i play it almost everyday online never gets boring. i played killzone and after i beat it it was like okay hey wanna play online? but there was no one on? so i went and played halo2

    p.s. i loved forza


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