Malstrom already criticized that article:
http://malstrom.50webs.com/news.htm
What is wrong with the analysts? on May 23, 2008
Guys...
Is this a joke? Not only does the PS3 mysteriously skyrocket in the end with Wii flattening off like a rock, look at the 2008 and 2009 sales numbers for the Wii. I have been trying to understand you analysts...
I can understand missing the DS explosion.
I can understand why you predicted PS3 to succeed and Wii to not do much.
I can understand why you thought Wii would become a fad after the first initial months of sales.
But how, at this time, can you get behind that chart is beyond me. Seriously. I don't understand the logic of the chart.
You can't say technology as Xbox 360 is as powerful as PS3.
You can't say Blu-Ray as, even with its victory, Blu-Ray isn't selling.
You can't say content as the Wii has been matching Sony in the number of software released.
Outside of tradition of simply putting PS3 on top, what is the rationale for doing so? Is there any rationale?
Like you, reader, I have been attempting to understand these analysts and why they keep putting PS3 on top.
First, I thought they hadn't caught on to Nintendo's new strategies. But then I realized that no analyst seems interested in seriously studying Nintendo. At least, not the analysts that speak to the press. Other analyst reports given to me by investors have shown a very different conclusion than the 5 analysts we keep hearing about in the press.
Second, I thought they kept putting PS3 on top because of denial. But no one could possibly be in denial this long.
Third, I thought they were just trying to stir up an image of a competitive fight so investors would keep buying reports from them. But they declared the PS2 early winner last time.
Fourth, I thought they were talking like salesmen in order to keep appearing in the press to keep selling their reports. But even a salesman would not go against the obvious.
Fifth, I wondered if they were truly this stupid. But they have to analyze stock so they can't be that dumb.
I'm running out of options. The only one I have left is 'fanboy'. But it is the only one that seems to match the available analyst actions...
“While a pick-up in PS3 and Xbox 360 hardware sales benefiting from GTA IV is not evident in the [April NPD] data, we believe May could show some sequential improvement,” offered Lazard Capital Markets analyst Colin Sebastian.
NPD analyst Anita Frazier concurred, "... Since [GTA IV] was only in the market for five days during this reporting period, that [hardware] sales lift could very well be evident in May data."
Anyone who said 5 days wouldn't be enough to show any uptick in hardware sales would have been laughed out of even the most common gaming forum.
My reaction to the April 2008 NPD was that there WAS probably an uptick in hardware sales which shows how damaging the disruption is to Sony and Microsoft:
While the hardware sales impact of GTA IV may have been weaker during April than some had expected, had the game not released last month PS3 and 360 sales would likely have been even lower - Microsoft's Gamerscore marketing blog reported that Xbox 360 sales jumped 54 percent week-over-week during the game’s first seven days on the market. Unfortunately NPD doesn't provide a weekly hardware sales breakdown, so it's unclear exactly what proportion of the Xbox 360s and PS3s sold during April were picked up in the final week of the month when GTA IV was available.
If hardware DID jump up for April, doesn't that make the already bad sales for HD consoles even WORSE?
But most agree that Microsoft's answer to its quality problems has been a case study in responsiveness.
"You have to give them a ton of credit," said Pachter, referring to Microsoft's offer of three-year warranties for Xbox 360s. "They didn't back away from it, and they didn't try to blame it on anybody else."
Huh? Microsoft kept saying the Xbox 360 hardware problems were only around 3% and many problems aren't even covered with the warranty. Peter Moore even said 'you know, things break'. Only when they revealed the extended warranty did they get rid of Moore and replace him. Why do people seem to have a very short memory this generation?
While these analysts that are quoted in the press keep saying Sony will win, likely based on a belief that Blu-Ray will somehow become popular and everyone will buy a PS3 for Blu-Ray (haha), there is one quote that largely leads me to believe these characters are Sony fanboys. While it is a long quote, it is very revealing.
Remember Strategy Analytics that said Nintendo should go third party back during the Gamecube Era? I notice they haven't said anything lately so I did some research and this is the last thing I have found when they specifically talk about Nintendo. It's hilarious:
Remember, this is from January, 2007 right after the Wii launched...
Nintendo helped create the modern videogames industry, and the company remains a leading force and is financially successful. In spite of this, Strategy Analytics’ games reports over the years (in which I have been the principal contributor) have cast doubt on the company’s fixed console strategy, and we were proved largely right with the GameCube, which was a major disappointment and drastically missed all Nintendo’s own projections.
I try not to let my personal preferences influence my professional analysis: I admire the passion displayed by the dedicated followers of the various systems, as indicated by the copious flames that fill my inbox every time my name is attached to a particular pronouncement. For what it’s worth, I have only ever bought Nintendo’s consoles (fixed or portable), for myself or my children. But this has not stopped me taking the view that in the fixed market, Nintendo stands little chance of market leadership in the battle against Sony and Microsoft.
Latest reports of Nintendo’s recent results in the specialist and business media have an unswervingly positive slant. Financially, the company continues to be extremely strong, and this is supported principally by the company’s domination in handheld gaming (where Sony’s PSP is rapidly losing ground). But surely even Nintendo cannot pretend that its Wii console is meeting expectations. It sold 3.2 million in the first quarter, 20% below its target. But from all the press reports you would think the Wii was already market leader and set to sweep the world.
Take this from Business Week: “Nintendo's Wii console has blown away Sony's PlayStation 3 in the early stages of the hotly contested battle for next-gen gaming consoles.” Putting journalistic hyperbole aside, the facts are that Nintendo missed its target for global Wii sales by 20% while Sony was within 10% of meeting its own (admittedly reduced) target. And while consumers spent $800m on Wii consoles, they spent $900m on PS3s. Blown away, indeed?
I have mentioned before that Sony’s games PR is dire. Whatever Nintendo’s PR people are doing, Sony should learn from it, and fast. The PS3 certainly has major challenges ahead, but it’s nowhere near the disaster the press and some financial analysts are painting it. And the world’s leading console platform is still, wait for it, the PS2. By contrast, Nintendo still has a lot to prove if the Wii is really going to revive the company’s fortunes. If its commercial performance is a good as the PR spin, it has every chance of success. The bottom line is, this is a battle that will be fought over years, not in a few weeks before Christmas.
-David Mercer, his 'analyst' blog, January 31, 2007
In what I bolded, note how Mercer is being defensive about not being a fanboy and that the 'flames' in his mailbox are from the real fanboys?
When someone gets really defensive about something, it is often true.
In this blog post, Mercer sounds unhinged. He literally believes the Wii's success at launch was PR spin and is making outlandish comments to defend the PS3.
I have observed that these analysts tend to know each other personally, and they have a sort of 'club'. From one that I have seen up close, who is big Sony fanboy, I am beginning to suspect that birds of a feather flock together. This particular person (not Mercer) kept hailing the success of UMDs to make everyone think that UMDs were a huge success and didn't inform the public about the true state of UMDs until they were being pulled from retailers as dead as a mini-disc.
What investors have told me is that these analysts just entered the jobs since they heard the pay was good, and they just 'shuffle papers'. In other words, investors have said that your instincts are right: that they don't really know what they're talking about but clothe everything in charts and numbers to make it sound like they do. Let me give two examples of this. One would be the constant obsession of the currency exchange rate. How does currency exchange rate show what is going on with the market? It doesn't. Guys like Pachter have been trying to defend that saying the Wii shortage is due to the drop in the dollar's value yet ignoring that America has always had most of the shipments since day one and that they are increasing because production is increasing.
The other red flag is all the chatter about 'price cuts'. Price cuts are an artificial discount to buy marketshare- that is all. Even recent history shows dropping the price of Gamecube and other systems didn't make much of a difference in the market.
The only conclusion I am left with is that some of these guys are fanboy frauds. Don't expect any investigative journalism to be done on them. These guys give journalists food to put out as stories, and they will not bite the hand that feeds them easy stories.
Right said.
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