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savisn on 10 April 2013
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I can't think of a financial analyst in any other industry that I've ever followed that seemed to understand less about the markets and products he covers. Patcher seems more like an enthusiast than an investment advisor.

His views on the market and how it might evolve are one thing - after all when 1 of 3 consoles is out and is still in its infancy it's all a guessing game. He is correct with some of Wii U's weaknesses and potential for it to fail (although he seems to overlook some strengths and things it may be able to do well).

Where he really fails is his utter lack of understanding of the economics of the companies he follows. I invest in Nintendo so I'll use them as an example:

1. A few months ago he went on and on about the 3DS price cut and how Nintendo was losing money on every sale. This was despite the fact that about two months earlier in the mid-year financial report Nintendo had reported that the costs were out and that every 3DS sold was now at a profit.

2. He made similar statements about Wii U software attachment rates. I can't be bothered to look for it but I believe he used 1 as the attachment. This was right after their quarterly report which shows it around 3. The amount of software that would have had to be in stores (assuming he was using retail sales) was something like 5 million units which would have been 50% of all software sold. It made 0 sense and was clearly wrong

3. He thinks there is no way Nintendo will turn a profit next year. This is despite the fact that they will come close and may even have turned a profit for FY2012 despite 3DS being sold at a loss for 1/2 a year and launch costs for WiiU. 3DS is likely to sell as much or more hardware this year as last and every sale will be at a profit. It's almost guaranteed to sell more software with a higher installed base and with Pokemon, MH4, AC (US and Europe), and Tomodochi coming out this FY. WiiU may flounder but they will be driving costs out of it to probably get it profitable or nearly so and software sales will go up. Add in the fact that depreciation expenses are going down (they are very high due to a lot of Capital spending for the the 3DS and WiiU) and it's very very unlikely they don't turn a profit. Tack on Japanese financial easing and it could be even better.

I could understand if he just said he's stay away from Nintendo because he thinks they are being poorly managed and investors will get better returns elsewhere. There is a strong case for that as evidenced by Nintendo selling near book value despite the best IP in the business. But to be so clearly wrong about verifiable facts and to constantly do such poor analysis is inexcusable. I'm just amazed anyone would listen to that guy for financial advice.