Here's a very interesting End of Day thought for you guys! I know a lot of you have been waiting patiently for this one. I hope it's everything you were looking forward to! See you in a few, short hours.
If you've been following online game coverage over the past few years, you no doubt know who Michael Pachter is. He's one of the most well-known, oft-quoted game analysts out there. He also happens to be a particularly polarizing figure when it comes to the world of Nintendo. To put it nicely, most Nintendo fans don't want to hear another peep from Pachter.
That includes some of you guys and gals! When I reached out to Pachter for the idea of an interview, I saw that some of you weren't interested at all. You wanted everyone to just ignore Michael Pachter and have him disappear. On the flip side, it seemed more people wanted to ask Michael Pachter some questions. They wanted to know why he says the things he does about Nintendo. They wanted to learn about how he really feels and where his analysis comes from.
I poured through every single Twitter suggestion and site comment that you guys left for Pachter. My word, there were a ton of them! I did my absolute best to piece together questions from you guys that flowed well together. Questions that covered a lot of the areas that most of you were asking about. I also had to do all that while keeping the question amount at a respectable level, rather than sending Pachter over a 10 page questionnaire.
With that said, here are my and your questions, pieced together into 11 wide-ranging topics. Are Pachter's answers going to make you feel differently about him? I honestly do not know. Will some of what he says rile people up? I'm sure it will! With that said, I felt it was extremely important to actually get a back-and-forth going with Pachter, just so we could get a better idea of who he is and what he really thinks.
A huge thank you to Michael Pachter for taking some time out to answer these questions.
Q: I think it's obvious that Nintendo fans don't think too fondly of you. Some of our own readers didn't even want me to interview you, as they felt I was just adding fuel to the fire. I wanted to give you a chance to openly address Nintendo fans. The general feeling is that you enjoy going after Nintendo fans and riling them up. With that said, what's your honest opinion of Nintendo and its fans?
MP: Nintendo fanboys are way too sensitive. Most of my comments are intended to be humorous, and since I've behaved this way for over 50 years, my experience counts for a lot. Most people take my not so serious comments as jokes, and few have been offended. With that said, my honest opinion of Nintendo is that it has phenomenal software, consistently among the best released every year, and offers a greater number of successful brands than any other publisher or manufacturer. On the hardware side, the company has been occasionally innovative, and occasionally uncreative. I think that the NES, SNES, GameBoy, N64, DS and Wii were all innovative, and that the GameCube, 3DS and Wii U were/are all uncreative extensions of existing technology. As for the fanboys, I think it is entirely legitimate to be enamored of the content, and have never questioned fanboy attitudes toward software. On the other hand, I think that it is fair game to poke fun at fanboy attitudes toward hardware (and I do so often about the Xbox 360 and PS3 as well). My comments were specifically about how the Wii U would sell, and I have never questioned that fanboys will buy the device at any price, regardless of specs. That was the impetus for the cardboard/cardboard box comments: Nintendo fanboys will buy the Wii U no matter what, because they want to play Nintendo's outstanding software titles. If a fanboy is reading this and didn't understand, I apologize if he interpreted my comments as suggesting that he's stupid. If he did understand, he shouldn't be offended.
Q: Many Nintendo fans feel your Nintendo-related predictions come from baseless speculation, rather than informed research and inside info. When making Nintendo predictions (such as Wii HD and the 3DS selling like hotcakes on day one), what sources or avenues do you take? How much work goes into formulating responses?
MP: I've covered the industry for 12 years, and my estimates are consistently close. I am wrong on every individual estimate, but the sum of my errors generally adds up to a very small miss. I was skeptical about Wii until I played a game on it at E3 in 2006, then instantly became a fan. As you know, I was pretty bullish on 3DS, but didn't realize that the game lineup would be pretty thin, and that people would fear headaches. I also thought the fanboys would buy more of them at the $249 price point, but was wrong. The point is that I make the best guess I can based on all available information, including past sales, sales of similar items, products introduced by competitors, etc. The Wii HD prediction was made because I thought (and still believe) that Nintendo would lose market share once the Xbox 360 and PS3 prices approached the Wii price, and particularly as high definition televisions achieved greater household penetration. It seemed rational to me that Nintendo would attempt to maintain its market share by introducing a competitive console. I was wrong that Nintendo would act in its own best interests, Wii sales have fallen off a cliff, and Nintendo started losing money. They are launching their HD console two years too late, in my opinion, but that's their prerogative. The fanboys who take solace from the fact that I'm wrong don't seem to understand that Nintendo's stock implied a value of $100 billion for the company a few years ago, and it's worth $10 billion today (with $9 billion in cash). That means that the equity of Nintendo has declined over $80 billion, largely because management did nothing while the company lost market share. I was wrong in believing they would do something.
To answer your question specifically, I read a great deal, have four degrees (BA, JD, MBA and LLM), have worked for over 30 years, and have spent the last 11 as a games analyst. I take in a lot of information, consider how a rational business person would behave, and "predict" what they will do. As far as "how much work" goes into my job, I get here around 4:30 every morning, leave around 4:30, work for an hour a night and five to six hours every weekend, and never leave my office (no lunch breaks). That's around 70 hours a week. Unfortunately, I make a lot of estimates (or "predictions" as you called them), so I can't quantify how much time I spend formulating each opinion.
Q: One recent bit of speculation that seems to have particularly angered fans is commentary on Call of Duty, Activision and the Wii U. You made comments about Nintendo being asked/pressured by Activision to put out the Wii U Controller Pro to support Call of Duty, stating that the GamePad didn't suit Call of Duty. Seeing as how the GamePad actually features all the buttons of a 360/PS3 controller plus some added input methods, what lead you to these statements? It was also found out that this commentary didn't come from an informed party, but was pure speculation. What drove you to make the statements?
MP: I am completely baffled about why fans care about the reasons for the inclusion of the Pro Controller. It's there for some reason, I speculated about why I believe it's there, and I am confident enough to have said I'm sure. Nobody told me that there was a demand from a publisher, but several publishers told me that they didn't put games on the Wii because they didn't want to deal with the control scheme, and several told me a year ago that they had the same issue with the Wii U. When Nintendo announced the Pro Controller at this year's E3, the coincidence seemed too great to not be true. I know that the GamePad has all of the same buttons, and described it in print as an Xbox 360 controller with a screen in the middle. The point is that Nintendo added the Pro Controller for a reason, and I supplied what I believe is the reason. If fans don't like that, they can disagree and come up with their own theories, and they are free to say they think I'm wrong. The vitriol is unwarranted and generally silly. Your question about "what drove me" is that I was asked what I thought, so I answered. That is usually the reason for whatever I say on camera. It's fair to assume that everything I say is pure speculation, unless I say otherwise.
Q: You've said that the Wii U will be doomed if it launches even one cent over $250. Why do you feel so strongly in that? Are there no bundles or hardware pack-ins that wouldn't warrant a higher price where consumers would still feel the value was right for Wii U?
MP: If the Wii U is priced at $299 (I know that's more than one cent above $249, but they will price in $50 increments), it won't be competitive with the Xbox 360/Kinect bundle or the PS3/Move bundle. Right now, the 4GB 360 bundle is $299, and Microsoft can cut that price by $50 any time it wants, and could cut by $100 if it really wants to undercut the Wii U. If the Wii U comes out at $299 or higher, I think Microsoft will cut by a lot, and will advertise heavily. Fanboys will buy the Wii U for $299 because they want to play Nintendo content, and I will, too. However, the mass market is far more price sensitive than the average fanboy, so I don't think the public will embrace the Wii U at that price. If it's priced at $349 or $399, I think that the potential drops even further.
Q: The 3DS started out quite roughly, but back at the E3 prior to launch, you felt the system would fly off store shelves. Now the system has managed to move more units than the DS did at the same point in its life, but you consider smartphone competition to be a death knell for the 3DS. Looking at sales (with an understanding of higher sales in Japan than US or EU), why are you certain the the 3DS is going to have a rough time of things?
MP: I really believed in the 3DS, liked the games a lot, and thought the price was warranted. I was wrong, and the slow sales at the $249 price point led me to conclude that the Wii U would have a similar fate if priced too high. At $169, it's a pretty good value. The commentary that it's selling better than the DS at the same point is a bit disingenuous (by Nintendo, not by you), since the comparison is to the original fat DS. In the first 17 months of existence, the original DS averaged U.S. sales of 255,000 units a month, and in the first 17 months of the 3DS, sales averaged 310,000. However, in the first 17 months of the DS Lite, sales were 530,000 units, on average in the U.S. FYI, in the NEXT 17 months of its existence, the DS Lite averaged 920,000 units per month, or close to three times the level of the 3DS. Sales of the DS Lite took off in November 2007, and stayed very high for a couple of years. The point is that the 3DS is selling at around 60% of the rate of the DS Lite in its first 17 months, and I've consistently said I think it will end up penetrating around 50% of the market captured by the DS, due to competition from the PS Vita and from smart phones and tablets. I stand by that "prediction", and if anything, I believe I am too optimistic.
Q: Your Nintendo statements get you in a lot of hot water with fans on almost a weekly basis. Have your statements lead to strained relations or situations with any top brass at Nintendo? If we aren't happy about the statements, surely the higher-ups aren't enjoying them either.
MP: Great question. The top brass at Nintendo has never spent any time with me at all. I have never spoken to Mr. Iwata, and have spoken to CFO Mori san only once. Reggie has always been incredibly friendly and generous with his time, and nothing I say about Nintendo has ever been critical of his job (which is primarily marketing and distribution of product for the Americas). He's a great guy, and I think he does a phenomenal job; I believe the same about all of the people working for Nintendo of America--great people and very good at their jobs. I think that Mr. Iwata waited too long to release a new console, and has not done enough to address the threat to his casual audience presented by cheaper mobile game alternatives, but since he doesn't talk to me, it's hard for him to talk to me any less.
Q: You have stated that the Wii U is simply a response to the success of touch-screen devices like the iPad and iPod Touch. Why do you think this way when Nintendo clearly pushed touch-screen gaming with the DS, which hit before the big Apple boom?
MP: I think that the Wii U is an integration of the DS and a console, so from that standpoint, I really like the device. However, I think that it's going to find itself limited to games that provide a DS-like experience, and it will be difficult for developers to come up with many compelling alternatives where using a touch screen instead of a controller to control a game viewed on a television monitor will be a better experience. For example, I thought that aiming a sniper rifle with the tablet in ZombiU was silly, since it required far more effort than pushing down on the right analog stick, as is typically done in shooter games. Your question is fair, and you're right that Nintendo invented touch screen gaming. I suppose I meant that Apple took the touch screen experience to another level with the tablet, and I believe Nintendo is emulating Apple's model by including a touch screen tablet controller with its new console. But you're right, Nintendo invented the concept, and Apple merely iterated. Again, this is an area where fanboys are overly sensitive. I didn't mean any slight to Nintendo when I attributed "ownership" of the tablet concept to Apple.
Q: You are no doubt aware of your standing with gamers the world over. We're sure you've read your fair share of comments and bashing in the last few years. How does that commentary make you feel? Has it changed the way you approach interviews and statements? Do you feel any of that criticism has been warranted?
MP: All of my commentary has my name associated with it, and I take criticism from people who use their own names very seriously. I tend to dismiss criticism from anonymous sources, as I believe that anonymity is the refuge of cowards. I have had some exchanges with named people who said things to me over the Internet that they wouldn't dare say to my face, and when I see them in person, they are generally far more civil. Most people who meet me tend to understand that I'm a joker, and that I make comments that are intended to be taken lightly and not seriously. The Internet has a way of making everything sound deadly serious, as I'm sure this article will sound when you post it.
The only time I change the way I approach interviews and statements is when I am made aware that I inadvertently offended someone, or when I'm wrong. For example, I was wrong about Borderlands sales, and acknowledged as much when I saw Randy Pitchford (in front of the audience at DICE). Much of the criticism leveled at me is warranted; I'm a big boy, and accept that people have differing views. My statements are opinion, and I think it is entirely appropriate for others to challenge my opinion and provide their own. If they convince me (which is often the case), I change my opinion. Criticism that is limited to "he's wrong, therefore he's an idiot" is not particularly helpful or constructive, and I don't take it very seriously.
Q: You obviously feel that Nintendo has a rather uphill battle with the Wii U. What do you see as the biggest struggles the system is up against? If you had the opportunity to take things in your own hands, what would you do in order to better ensure a Wii U success in your eyes?
MP: It's hard to know how the Wii U will fare without pricing an specs. If it's similar to the Xbox 360 and priced higher, it's going to have a problem gaining market share, period. If it is significantly more powerful and priced competitively, it may have trouble attracting third party support, but ultimately will once the next generation consoles launch from Sony and Microsoft. I just think it's either two years too late or a year too early. It's possible that it will work really well, but that will require the right combination of specs, pricing and third party support. What would I do better? I would have launched the device two years ago, and called it the Wii HD. That's a joke, in case the fanboys are taking every word as being deadly serious.
Q: With Wii U software, you've said that a possible lower pricetag of $50 would make consumers feel that the games are of lesser quality, therefore turning people away. The situation is obviously much different on iOS, with 99 cents being the sweet spot. Consumers automatically shun iOS games when they cost more than a buck or two. How do you explain the rationale between the two platforms and pricing? Why is a high price kryptonite on one platform, yet a sign of quality on another?
MP: Interesting question. I think this is like comparing steak to fast food burgers. A restaurant with a $15 filet mignon entree sounds less desirable to many than a restaurant with a $30 filet. However, nobody wants to pay more than $1.29 for a McDonald's cheeseburger. The fact is that Microsoft and Sony are going to charge $60 or more for next generation games, so if Nintendo charges $50, they risk creating the impression that their games aren't as good. Apple's $0.99 price point doesn't compare, as the games are disposable. By the way, games like Infinity Blade and Shadow Complex aren't $0.99...
Q: Finally, a lot of our readers seem to think that you enjoy stirring the pot just to cause trouble and further your name. There's no denying that you're the most well-known analyst name in the game industry. Do you ever make statements that you know will be inflammatory in order to get your name more out there, or do you just have a knack for making statements that angry up the blood?
MP: Another interesting question. There are 35 analysts covering the games industry, I'm just one of them. I get interviewed a lot for two reasons: I'm responsive, and I'm a good interview. Part of what makes me a good interview is that I get it right often enough that reporters come back for more. Another part of what makes me a good interview is that I'm opinionated and quotable. There may be other Pachters out there, but if you Google "Pachter", you get 1.9 million hits, and I'm pretty sure most of them are me. I do between 5 - 10 interviews every day, probably 200 days a year (weekends and travel days I don't do many). That's 1000 - 2000 per year, for the last 10 years. I wouldn't be interviewed as often as I am if I was consistently boring and wrong.
I don't have any desire to "get my name out there" by making people angry. I have a desire to be considered an authority on a number of topics, and I speak with the press the way I speak in real life. I don't pull punches, and my comments are generally thoughtful and rational. However, when asked a question, I give answers, and rarely say "no comment". That means that I get asked a lot of questions. The Borderlands gaffe arose because I was asked (in 2009) which games would have difficulty getting noticed that holiday. I answered "Borderlands", because it was new IP and launching around the same time as Assassin's Creed and Call of Duty, and I thought it might get lost. Geoff Keighley asked "so you think Borderlands was sent to die", and I replied "yes". The headlines said "Pachter says Borderlands is sent to die". It was on a year-end game preview on Bonus Round in 2009, you can see it for yourself. This happens to me all the time, and I can't control what makes people angry.
So to answer your question, I suppose it's just a gift that I make people angry ;-)
Again, a big thanks to Michael Pachter for answering these questions. He also said that he's happy to go another round, should we want to do that in the future. Just something to keep in mind!