Friday, June 17, 2011

Michael Pachter On Wii Play Motion, A Year Ago


Coffee Beans:
     If you just started following my blog in the last year, you may not have seen two posts last year that I did on Michael Pachter.  One post was titled, "Analyzing the Analyst: Michael Pachter is Wrong", and the second post was titled, "Michael Pachter Responds!  Thoughts on the Wii Vitality Sensor", which showed part of a response Mr. Pachter sent me in regards to the first post.
     Today I'm showing some more excerpts from the email exchanges, that will look at part of our conversation regarding Nintendo's supply issues they were having last year with the Wii Fit Plus with Balance Board bundle, and also the supply issues with Wii Play.
     One reason for releasing these exchanges now, is that Wii Play Motion was just released this week, and I actually mentioned(predicted) it last year(with just a slightly different name, but VERY close to what it ended up as).

     So, the text below is from a portion of Mr. Pachter's first email he sent to me, followed by part of my response to him, and his reply again.  To understand his initial response below, you may want to start at the POST that started the exchange, HERE.

     Did Michael Pachter think Nintendo would release Wii Play Motion over a year ago, and what were his reasons?  Let's take a look!

Emails:
     Michael Pachter's initial response on March 15, 2010:
     "I suppose it's fair to say that I 'ignored' the 'fact' that Wii Fit Plus with Balance Board and Wii Play were in limited stock.  It's hard for me to reconcile how Nintendo could be so unprepared for demand.  I knew that there was a tight supply(although both were in stock wherever I visited, quantities were low), but can't understand how Nintendo could mess up the supply chain so badly on both.

     By 'so badly', I mean that all the balance board items (both Wii Fit and Wii Fit Plus) sold through 777,000 unites in January[2009] last year, and only 373,000 units this year.  The balance board sold 644,000 in February[2009] last year and only 40,000 this year.  In other words, Nintendo should have known that there would be 300,000 or more of demand, and had to supply only that many, somehow made it in January, then inexplicably ran out of supply in February.  I do not question your conclusion that this was likely due to a supply issue, but for me to call them out on the supply situationi would be to say that they are poor managers of the supply chain.  Without a statement from them acknowledging such, I chose to say that sales "are beginning to fade", and concluded that demand may have played a part.  I'm OK with your reaching a different conclusion, but am reluctant to call Nintendo management out on their odd choice to let supply dry up.

     The same is true of Wii Play, with no rational explanation.  Sales in January and February last year(2009) were 415,000 and 386,000 units, or around 50% of Wii sales.  This has been relatively constant since launch.  For Nintendo to suddenly "run out" of extra controllers is mind boggling.  Yes, I know that they are out of stock in many places, but I genuinely don't get it, and to see the attach rate drop to 25% in December, 30% in January and 15% in February really makes me wonder if this is also demand driven.  Who actually knows? Nintendo does.

     As an aside, prior to writing the note, I had a half hour meeting with Reggie, and although he said the balance board was in tight supply, he was as surprised as I was by the Wii Play number, and said he would look into it."

     My response to Mr. Pachter on March 16, 2010, and me addressing the Wii Play stock issue:
     "My 'analysis' on Wii Play, is I think Nintendo is phasing Wii Play out now, and that is part of the reason the game is 'sold-out' at different locations.
     If you do a quick search on WalMart.com, ToysRUs.com, and Amazon.com for the term 'Wii Remote' you will only see the Wii Remote bundled with WM+ being sold.  BestBuy.com and Target.com are currently the only two sites I checked offering Wii Remotes sold alone.  A quick local search of those stores showed most are either 'out-of-stock' or have 'limited' quantities of just the regular Wii Remote with no WM+ attachment.

     We know that Nintendo has the Wii system at Wal-Mart now, bundled with Wii Sports Resort and the Wii MotionPlus accessory.

     I think it makes a lot of sense for Nintendo to release a new Wii Play game, but make it, 'Wii Play Plus', or something along those lines, that will include the WM+ accessory and new mini/micro games that use WM+."

     Mr. Pachter responded on March 16, 2010 saying:
     "I don't think your guess about phasing out Wii Play is right.  They would rather sell an extra controller for $60 than for $20, so Wii Play is a great deal for them.  The Wii-mote with WM+ is $55, so maybe it's a comparable deal, but we didn't see a huge spike in sales there (I don't subscribe to the accessory data, but asked Reggie about it).  Reggie had no clue that Wii Play sales fell off a cliff (I saw him at 3 p.m. Pacific, 90 minutes after the NPD data came out, and he had not seen the software numbers).  He knew all about the Wii Fit Plus with Balance Board supply issue, but had no explanation as to why it was in tight supply.  I told him I was going to write about it, and that I would be kind (meaning I would not point a finger at NOA management screwing up the channel).  If you're right, you would think he would have been better prepared."

Filtered Thoughts:
     This was just a portion of the email exchanges that Mr. Pachter and I had.  When I read Nintendo announced Wii Play Motion, I literally LOLed, and wondered if Mr. Pachter had forwarded my email response over to Nintendo.  While I called the game, "Wii Play Plus", Wii Play Motion is basically the exact game-type I thought would have released last year, in 2010, to replace the original Wii Play.
     I am glad to see Nintendo release Wii Play Motion, but I really do think it's late to the Wii MotionPlus party.  Nintendo has released at least two other games(Wii Party and Mario Sports Mix) since the Wii MotionPlus unit was released, and I thought it was absolutely ridiculous for neither of them to support WM+ controls in some way.
     As for Mr. Pachter's responses, he took time to explain his views(though the Wii Play and controller pricing he mentioned confused me a bit in the second response), and he even provided data from the previous year(2009) to show the declining sales.  While Mr. Pachter did not think a Wii Play sequel made sense in 2010, I will send him a link to this post, and see if perhaps he thinks it makes more sense now.
     Mr. Pachter ended the second email response with, "Other than that, we pretty much agree about everything.  I suppose that the point is that either Nintendo screwed up supply, or demand is dropping off.  It could, of course, be a combination of the two.  It will be interesting to see what happens when supply for the balance board improves."

Questions:
     Do any of you think, like I do, that Wii Play Motion releasing this year is a little late?
     If any of you have been playing Wii Play Motion, what do you think about it?  Is it a bundle you would recommend to other Wii owners looking for some Wii MotionPlus games, or should they perhaps look for the software only, at a lower price?

If any of you are interested in Wii Play Motion, you can see it on Amazon.com linked below:

7 comments:

  1. I'm not sure why people give this guy the time of day. His behaviour is not professional, he refers to Nintendo as a them (dear Analyst: As your Gartner, IDC, Ovum and IBRS colleagues would be happy to explain to you, a company is not a person. It is an 'it'), and it's clear that his opinions are just that, opinions. I've read more insightful posts from random kids on forums.

    The games industry needs more high profile analysts that are professionally-minded and qualified. Not random folks with Wordpress accounts.

    ReplyDelete
  2. Well, he has the credentials, and has been doing it for a while working at Wedbush Morgan I believe. So, I think he is probably "qualified", though the "professionally-minded" part would be up to individuals to decide...which if he interviews/talks with industry people, I'm guessing they think he is "professionally-minded" enough...

    I don't think referring to Nintendo as an "it" or "them" is really an issue here(not an English major myself, though I do try to keep it as proper as possible), but perhaps stating how what he has said isn't "insightful" to you, could help shed some light on what you're specifically talking about.

    Also, being that he talks with Reggie and other industry insiders, I think makes his opinions higher than a random forum post...because he has insider knowledge to some degree.

    BTW, does Pachter even have a Wordpress account?

    ReplyDelete
  3. "I don't think referring to Nintendo as an "it" or "them" is really an issue here(not an English major myself, though I do try to keep it as proper as possible)"

    It's an issue when you're talking about industry analysts. There's a certain detachment that these people are meant to have from the industry they're analysing, and by implication, personalising a company means this guy isn't keeping that distance.

    I've dealt with a lot of analysts in my time - and I find Patcher to not behave like one. Perhaps it's because he is dealing with an entertainment industry, rather than a business industry, but it does it hard for me to take his hyperbole and sensationalist statements seriously.

    "Also, being that he talks with Reggie and other industry insiders, I think makes his opinions higher than a random forum post...because he has insider knowledge to some degree."

    I've seen some forum posts from people who do a lot of reading, and have come up with some very insightful analysis as a result.

    Having access to CEOs is one thing - it's only worth something if they talk to you openly and take you seriously.


    But again, it might just be that analysts in the entertainment industries behave differently to what I usually deal with. Please understand that I'm coming to this from a perspective of someone who usually deals with business analysts.

    ReplyDelete
  4. Yea, the video game "business" is different in general from other "corporate" type businesses.
    It's not the "shirt and tie" type of business you would expect really.

    Mr. Pachter even said in one of the email exchanges that he had been to several "GDC parties" one night, that was something he went to as part of his job to keep in-touch with industry contacts.

    Also, why would Reggie and the others talk with him, if they didn't feel like he was providing fair feedback to/for them? It would be a waste of their time otherwise, and I don't think they would even talk with him.

    I'm not saying that some forum posts aren't informative, I'm just saying that people dismiss Pachter saying he doesn't know what he's talking about(even he admits that sometimes), but they don't realize he communicates with video game industry insiders.

    ReplyDelete
  5. They should have launched Wii Motion plus with a Wii play game. They probably would have saturated the market better so devs would be more willing to support the added functionality.

    Ultimately it would have been wise to add the gyroscope in the controller to begin with and they wouldn't have had this mess and maybe motion controls would have done a little better with less waggle. Oh well Wario Ware Smooth Moves is a blast as well as Zack and Wiki with the standard Wiimote.

    ReplyDelete
  6. @Who Burned My Toast?

    I'm always surprised how well Zack and Wiki worked, considering it was using the Wiimote in more and more complex ways than most other games ever tried. Shame with how the game did and where the Wii went, we'll never see a sequel to that with WM+.

    ReplyDelete
  7. Patcher aside, it's a bit late in the game to be releasing another mini-game collection with a bundled mote+. (and for those of us who have 4 motes and 2 WM+ attachments there's no point.) Not having WM+ from the beginning also sucks, but that's a different story.

    I certainly hope this is not what Reggie meant by "more games coming down the pipe" at E3...

    ReplyDelete

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