Since Michael Pachter cannot point to his own record for pointing out the direction for sales success, he attacks the people who were successful. Blue Ocean did more for Nintendo in one year than Michael Pachter has done for the Game Industry in twenty years. Pachter is so consistently wrong about the gaming market that I’m amazed people keep sending money to this guy. He guaranteed us that World of Warcraft would never go beyond one to four million subscribers since “no one wants to pay for an online game”. He assured us that the PSP would dominate the market over the DS. PlayStation 3, he told us, would do very strongly, and Nintendo’s Wii would do very poorly. He hyped up the 3DS and was adamant the 3DS would do extremely well.
But as for Pachter, let him speak for himself:
“Nintendo started out this cycle with a dominant handheld position and made a conscious decision not to compete with Xbox 360 and PS3 on graphics. They expanded their handheld dominance, and their decision not to compete with Xbox 360 and PS3 worked, and five years later, they are dominant on both console and handheld. However, their momentum has stalled, as iPods and smartphones proliferate, and as the ‘high definition’ consoles have overtaken the Wii.”
Investors directly asked Iwata about the Blue Ocean Strategy which Iwata confirmed Nintendo was no longer following. Anyone remotely familiar with the Blue Ocean Strategy can see Nintendo is not following it anymore. So why is Pachter trying to confuse the issue? Why is Pachter, talking like a politician, trying to create the narrative that the Blue Ocean Strategy led to Nintendo’s current losses?
The answer is because the Blue Ocean guys are analysts for hire themselves. Pachter isn’t interested in talking about Nintendo here as he is about attacking a rival competitor for his business.
“I called for the Wii HD in 2009 and again in 2010 because I saw all of this coming, and had enough respect for Nintendo management that I presumed they had to see things the same way that I did. It is clear that they didn’t share my view, and this week’s earnings report and sharply lower forecast are the consequence of their decision to stay the course in the blue ocean rather than compete in the red ocean.
But they are not staying the course. If anything, Nintendo is doing exactly what Pachter demanded in the first place. The Wii U is little more than a Wii HD. The Wii U is an attempt at the Xbox 360 and PlayStation 3′s markets. The 3DS is an attempt at PSP’s market (such as paying a fortune to get Monster Hunter).
If anything, it appears Pachter is scared that Nintendo’s decline can be traced exactly to his ‘advice’. Pachter has no reason to be unhappy. Nintendo is doing everything Pachter wants them to do.
It’s no mystery. The more Nintendo didn’t do what Pachter wanted, the bigger the sales was for Nintendo (Blue Ocean). The more Nintendo did do what Pachter wanted, the bottom fell out of Nintendo’s market. Nintendo’s strategy that is creating the decline is exactly the ‘Pachter strategy’.
Pachter cannot run away from this.