Wedbush Securities‘s video game analyst Michael Pachter was on CNBC‘s “Fast Money: Halftime Report” with Scott Wapner and company a short while ago to discuss howMicrosoft (MSFT) fumbled the “E3” video game conference in Los Angeles this week, in his view.
In addition to Microsoft’s “Xbox One” being undercut by Sony‘s (SNE) PlayStation 4 by $100, the new machine has spooked gamers with its need for constant online logins to use games, he contends:
Microsoft is trying to solve a problem that doesn’t exist. They want you be able to access every game publish instantly. That means you have to log in every day. Gamers are up in arms. They don’t want big brother looking over their shoulds. Microsoft has a lot of ‘splaining to do, as Ricky Ricardo used to say.
Pachter was asked about GameStop (GME), on whose shares he maintains a Buy rating and a $49 price target. GameStop, which makes a large trade in used games, have been up and down a lot on mixed messages about whether the new consoles will support used games, and on general fears that disc-based games overall are going the way of the buggy whip with the increasing use of downloaded games.
On the latter point, Pachter observed that it will take years before downloadable content takes 30% to 40% of the overall game software market. “I think those guys have a lot of years ahead of them,” said Pachter, as disc-based games continue to represent the larger percentage of games sold.
GameStop shares today are up $1.32, or 3.5%, at $38.85, helped by an upgrade from Oppenheimer & Co.’s Brian Nagel to Buy, with a $50 price target.
http://blogs.barrons.com/techtraderdaily/2013/06/14/microsofts-got-some-splaining-to-do-to-gamers-says-wedbush/?mod=BOL_qtoverview_barlatest
