It is amusing what things people choose to get mad about.
Mr Malstrom,
It is very rare for you to make the mistake of misrepresenting facts to your own advantage. That is more usually what you catch other people out doing. But in “A Tale of Two Financial Statements” you did:
Let us talk about the Wii for a moment. Nintendo’s response was this:
“There were fewer blockbuster titles that briskly drove hardware sales this June quarter versus the same period a year ago when titles like Mario Kart Wii and Wii Fit were launched in overseas markets,” said Nintendo.
And this is all fine and good. But the opposite of this statement is also true. If there are no blockbuster titles as there were with Mario Kart Wii and Wii Fit, we must conclude that Nintendo believes Wii Music and Animal Crossing Wii were not blockbusters.
The underlying issue was momentum. The purpose of first party games is to drive momentum. If Wii Music and Animal Crossing Wii had been blockbuster hits, Wii sales would not have dropped and Nintendo would not have had to make a statement.
Yes, I know it is comparison of one quarter to a quarter a year ago. But software titles, especially blockbuster Nintendo ones, do not turn into a pumpkin at the end of a quarter like Cinderella’s coach at midnight. They stick around driving momentum. When I said, “Then the opposite is true…” I figured people would understand that ‘opposite’ means ‘not the same’ which means of Nintendo using the quarter of last year for comparison. Why on Earth would I say ‘opposite’ if I were to keep using the same exact quarter Nintendo was phrasing?
You know as well as I do that if Wii Music and Animal Crossing Wii were massive blockbusters, propelling Wii to new heights, that saying this quarterly release of games like ‘re-release of Gamecube games with new play control’ were the driver of momentum would be absurd.
My answer was correct because I was obeying the context of the market, not the imaginary context bean counters live in. The bean counter context only is comparing this quarter to the quarter a year ago. This is why they recieved the answer they did from Nintendo. The real answer is what happened in those quarters in between. And that was my answer.
Do you possibly think Nintendo operates with only comparing quarters to ones a year ago? Of course not. They are in a momentum business. Video game consoles are a momentum business. The bean counter dweebs need to realize that. A previous quarter or two of poor software is going to affect the following quarter regardless of what was sold exactly a year ago.
You’re just annoyed I am not using the bean counter context. You know why? It is because it is not just wrong, it leads to errors.
For example, the bean counter context would say that the Wii sales have declined 60% but Xbox 360 sales have increased by 2%. I have actually seen people congratulate Microsoft Game Division executives for the great ‘growth’ of Xbox 360. Meanwhile, on the Wii side, they only offer the tired refrain: “60%!? Is Nintendo doomed???” These percentages, crafted by bean counters, do not tell us anything about what is going on and can easily mislead people who can’t get a good context on what is going on.
Pachter declares that Wii must get a price cut in order for Nintendo to meet their sales forecasts. This is the fruit of the bean counter context. Nintendo isn’t going to suppress their cashflow, present and future, just to meet some forecasts. They’d rather mess up on their forecast than harm their cashflow. The people who run these companies operate by a very different context than the bean counter context.
The best illustration of this would be prior to this generation when everyone was carving out pie charts of the ‘marketshare’ between PS3 and Xbox 360. Nintendo’s approach was never to win marketshare but to expand the market. Since no one, including Nintendo, can never estimate how big a market can be, all these ‘grand financial poobahs’ had egg on their faces.
Bean counters do not become CEOs. They become employees. This is why I do not use their context.