Nintendo in Disarray Says Industry "Expert"

Can we all stop listening to Michael Pachter?

For those who don’t know, Pachter is a (in)famous analyst for securities firm Wedbush Morgan who has made a career out of making bold predictions about the video game market, many of them dead wrong. His most recent comments were directed at Nintendo’s upcoming eighth generation console, the Wii U:

"Nintendo is in disarray because they waited too long to launch the Wii U. I know that this sounds like (and is) sour grapes because they didn't launch the Wii HD in 2009 or 2010 as I 'predicted.' They should have, and because they didn't, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren't financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80% in the last few years, and the market has appreciated over the same period. I'm paid to advise investors, and none have made a profit owning Nintendo stock. I don't think that many will make a profit over the next few years, because I don't think Nintendo's strategy will return them to profitability."

This is rough stuff. But before you panic, sell your Nintendo stock, and detonate your Wii with homemade explosives in the backyard, please keep in mind that this prediction is the not the work of Nostradamus. It is the product of Michael Pachter, who famously said in 2007 that:

"We expect the dominant console at the end of the next cycle to be Sony PlayStation 3, primarily due to our assessment that Sony will win the high definition DVD format war. Ultimately, we see Sony winning the console war with 36% of the market, with Nintendo capturing second place at 34% and Microsoft finishing third at 30%."

Wrong. As of today, Nintendo is winning with 42.9% of the market, Microsoft is in second with 29.3%, and Sony is close behind at 27.8%. But that’s not nearly as bad a prediction as the one made by Pachter in September 2005 which, if followed, could have cost investors dearly:

"I don't think there are four million people in the world who really want to play online games every month. World of Warcraft is such an exception. I frankly think it's the buzz factor, and eventually it will come back to the mean, maybe a million subscribers."

"It may continue to grow in China, but not in Europe or the U.S. We don't need the imaginary outlet to feel a sense of accomplishment here. It just doesn't work in the U.S. It just doesn't make any sense."

As of December 2011, World of Warcraft had 10.2 million subscribers. It is the most-subscribed MMORPG (massively multiplayer online role-playing game) in the world.

So please let’s all stop listening to doomsday warnings from Michael Pachter. There is still very little information about the Wii U after all. No one outside of Nintendo knows the launch line-up, initial price tag, or the complete technical specifications for the console and its tablet controller.

Nintendo has been around for 40 years and will be around for many more. They are innovative; they have some of the best IPs on the planet; and, most importantly, they learn from their mistakes. This is the company that revitalized the video game industry in the late 1980s, and revolutionized it in 2006 with its motion control peripherals. This is the company that created Super Mario, The Legend of Zelda, Metroid, and Donkey Kong. This is the company that should never be underestimated, undervalued, or overlooked.