Michael Pachter, Managing Director of Equity Research at Wedbush Securities, had a few things to say about the future of the industry at the [a]list game marketing summit in San Francisco this past Thursday. While Pachter briefly talked about social games, the bulk of his presentation focused on the Wii U – which he doesn’t seem to have much faith in.
When asked about the likely price target for the next generation of consoles, Pachter tore into Nintendo’s fledgling game machine:
I think Nintendo’s in disarray. I think the idea that we don’t know the price point yet, but we do know what the console is, is just sad. I think they’ve completely blown that. It’s gonna launch at $249; because it has to. They’re dead if they launch at $259, I think they’re toast then. I think they’re toast anyway.
He continued, stating that he doesn’t believe someone would spent the extra money for a Wii U over an Xbox 360 with Kinect. Pachter doesn’t just take issue with the Wii U, however, as he believes the entire next generation is in danger of hitting a wall. He drew a comparison between the console industry and the TV industry, noting that no one is willing to buy new technology anymore because it’s hard to see any real improvement:
All the consoles now are running in 1080p, so what are we gonna get? 60 frames per second standard, and 120 frames per second occasionally? Who cares? Have you played NBA 2K? It looks like a frickin’ movie. The facial animation isn’t great, but the game looks like a movie. It doesn’t get any better than that.
But what about social games? While Pachter slammed the Wii as a “bubble,” he gushed all over Zynga and the casual and mobile gaming markets. Using the analogy of a casino, Pachter pointed out that while hardcore games and MMOs are like poker, casual titles are more akin to slot machines. “Everyone can figure them out, and they’re really mindless,” he said. He also defended Zynga against arguments that all of their games are the same, noting that “you could absolutely say that about first-person shooters. You could. They’re all the same game. Except they’re not. I would say that about Hidden Chronicles and Gardens of Time. I love Zynga games, and I get why they’re doing them.”
That isn’t to say Pachter doesn’t see room for improvement in the social arena, especially in regards to free-to-play titles. “Free to play should not be free. In Western cultures, we get nothing for free. It’s ad-supported if you don’t pay for it,” he said. The goal, according to Pachter, is to figure out a way to pick the pockets of the 98 percent of people who aren’t paying to play.
Regardless, he doesn’t seem to believe that free-to-play and casual games will destroy the AAA-title focus of the industry:
People are going to have that $60 – soon to be $70 – game play experience as long as there’s somebody who has a vested interest in making sure that happens.