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RVDondaPC on 27 January 2010
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jammy2211 said:
Demotruk said:
jammy2211 said:
Demotruk said:
Pachter doesn't have costs though. He has sales figures, not development costs. In order to show economies of scale making up for higher development costs you'd have to actually show the costs, and then in comparison to the revenue would you have profit.

Why would he not have access to costs? lol.

 He's paid by these companies to do an analsysis of their costs to potential pay-off type ratio thing....

Isn't he paid by a brokerage firm to analyze the companies? He analyzes the market using data from companies like NPD, I'd be surprised if third parties gave him access to their internal figures, as what he does is not supposed to be for their benefit.

CG: Over the years, what sort of success rate have you enjoyed with your predictions regarding the games industry?

MP: The only “predictions” I make that matter are predicting the earnings of the companies I cover. In order to do so, I have to make reasonable guesses about sales, and software sales are driven by console sales. I “predict” a number of different things, but none except earnings matter, and I’m very good at predicting earnings. I have finished as a five star analyst in the Starmine rankings (top 15%, I think) all but one year this decade, and have finished first twice, so I’m doing just fine.

 

That's from an interview with him (http://www.criticalgamer.co.uk/2009/12/17/michael-pachter-interview/), where I think it's safe to assume the 'companies I cover' refers to various third parties. He's made previous estimates at developement costs, and as the leading video game 'analysist' it's safe to assume he knows his figures.

 I'm not trying to suggest Wii games don't cost less then HD or anything. Just that someone in the position of pachter undoubtedly has these figures avaliable to them, and no doubt knows alot more about how they add up then anyone on here.

Don't think he gets any information that most people couldn't get on their own(some of his market research may cost money). He works for a third party financial investment firm. His job is to follow these companies to determine if they are worth investing in and such. His "predictions" are not used by the companies he follows, rather they are used by investors or investment companies that do not have the time to sit down and do all the calculations that this guy does nor do they have the knowledge of the industry market or the time to follow all the trends and such. The companies he follows don't give him his information other than what they release to the public. If Nintendo or Sony was giving him their costs he would be working for Nintendo or Sony, not a third party. Generally, companies don't like their competition to know their costs (for specific items) and other information that they don't have to legally release as a public company. So if he's not working for Sony or Nintendo, they aren't telling him anything they wouldn't mind the public knowing. 

With that said this guy is probably one of the better guys to put all the clues together that is readily available to the public and predicting the expecting earnings.