| phisheep said: This needs to be treated with a whole lot of caution, if not outright scepticism. Here's an extract from page 11, which describes their 'methodology'. The brand value published is based on the intrinsic value of the brand — derived from its ability to generate demand. The dollar value of each brand in the ranking is the sum of all future earnings that brand is forecast to generate, discounted to a present day value.
What that highlighted bit means is, they GUESSED how much it will sell in the future, then divided it by something. WTF? We could all do that, but we'd all come up with different numbers. This just means that they are American, and hence expect Microsoft to win and Sony to not win.
|
Its not as bad as you're making it out to be. For a brand analysis to be valid, they need to estimate what future earnings will be possible with it, assuming current trends. And it obviously is about future earnings because who cares about the past, they're done and over with. Sony for example will only care about how much they can sell in the future, not what if they changed their launch strategy 3 yrs ago.
And when you "forecast" earnings, its ALL guessing, some guesses are however more accurate than others. Taking some random guy off the street and having him guess the sales numbers for Gears of War 2 will be less accurate than taking TheSource and having him guess.
The discounted to a present day value part you are misunderstanding. Its taking about NPV (net present value) and is used in all financial analysis to take into account ROI and effects of interest rates. (i.e. money is worth more today than the same amount in 10 yrs due to inflation/etc) In fact, not doing a NPV analysis will invalidate your results.
