Industry analyists - clearly a complete waste of money:

http://forum.pcvsconsole.com/viewthread.php?tid=16280 

(nicked the link off another thread)

Surely these guys can never be taken seriously again... or do they just re-invent themselves so they can talk crap for every generation of videogames? 

Meh, just another talking head that the investors like to listen to and bet their money on with their stock purchases.

Now --I-- would willing bet that the majority of those wallstreet junkies missed the major boat and stock geyser with Nintendo.

Good job analysts, good job.

They get paid to say things that reassure or guide investors to invest their money in stock of value by saying what they think investors want to hear.

You know, kinda like the fortune tellers reassuring a girl that her boyfriend really does love her still, or to give hopes to that guy who's going after the impossibly beautiful lady.

Their predictions allowed me to earn more money. If it weren't for them predicting such poor Wii sales, I wouldn't have been able to buy Nintendo shares so cheap. The worse they are, the more I make!

I find some of them quite entertaining ...

Many of the analysts have the Wii selling by 2011/2012 what it will have sold by the end of 2007 (or mid 2008); at the same time they have numbers for the PS3 for the end of 2008 which it would be lucky to achieve by the end of 2011/2012 at the current rate of sales.

I understand their mistake though ...

They made their decision based on brand value and market research using assumptions like a $300 PS3; as we all know "brand value" is meaningless unless a company continues to deliver the appropriate product, market research was worthless because no one knew what the Wii (revolution) really was about, and the PS3 ended up being one of the most expensive consoles ever sold.

Edit: Even I initially thought the Wii would be popular but didn't think it could unseat the PS3; I expected it to pass the sales of the N64 as it claimed a unique position within the market which the PS3 and XBox 360 could not challenge.

Interesting to see that only ONE GROUP, IDC, predicted the Wii pulling out the top sales, or even more astounding, that it would even be reasonable competition to the other two. Jeez.

What are they paid for?

There is some truth to the point of that question.

About 10 years ago, associate equity analysts got about 200K in salary. No joke. These days, they get perhaps 140K with similar education and experience becuase the market has just decided that they weren't worth their weight. Market research analysts aren't AS highly paid, but they haven't seen a similar industry shakedown as the equity people.

That said, they still have a valuable function. In the case of the gaming industry their research informs retailers which games to buy, and how many. Research gives developers not only an idea of what kinds of games might be popular but also the expected market for their games. And so on.  A good general way to think about the value of these analysts is that they reduce the risk for the big players involved in any industry.  They just make the industry and market a loootttttt more efficient by giving an accurate picture as possible of the market so that (bigger) mistakes aren't made by the big players. 

In a few years, my MBA is going to be finished and i'm gonna email michael pachter to see if he'd accept a grunt analyst working for him. Most of these senior analysts have 4-5 analysts under them working.

I still kind of want to go the equity research route, but getting into gaming and this website has been the critical tipping point that is making me think about a research career focusing on the gaming-related industry. Sounds crazy? Hope it works out either way and i'll probably make a move in a few years when this non-profit kind of work gets old =)