The First Michael Pachter Post of 2006
Well, our friend Michael Pachter is at it again.Now when I use the word "friend" I'm not using it sarcastically. He was nice enough to e-mail after I made fun of him a few months ago and was both a very good sport and a very nice guy. Tthe breadth of companies he covers in the gaming industry and the number of subjects he comments on is absolutely huge, so it's much easier for me to pick at what I think are his mistakes. But it seems like he's quoted in every mainstream article about gaming now, so he's an important voice in the analyst community.
Here's an excerpt from a recent article in the Wall Street Journal online
(http://online.wsj.com/public/article/SB113529311826629896-cn_sHEWLQLtvBRdnYk5f9PKTpoM_20061231.html?mod=tff_main_tff_top):
...Microsoft is making a big -- and risky -- bet that videogame players will flock to the opportunity to play lots of games against each other over the Internet. The Xbox 360, released in the U.S. last month, lets users play more games online than the original Xbox. It also lets users purchase and download games.
The company has spent hundreds of millions of dollars on its online service, Xbox Live, analysts say...
But the big move into online gaming carries risks. It is not clear that companies like Microsoft and Sony will be able to lure large numbers of players -- each has attracted a small fraction of users to online play with their previous consoles. The companies also must be careful about new business models for distributing games -- such as games-on-demand -- so as not to alienate game publishers, who still rely heavily on in-store sales. And games designed for multiple players have a mixed record of attracting customers.
The challenge is to expand the appeal of online gaming beyond the core audience of hardcore gamers, and casual players may not bite, said Michael Goodman, senior analyst with Yankee Group, a technology-research firm in Boston.
Added Michael Pachter, an analyst with Wedbush Morgan Securities: "At the end of the day, we don't play games for social interaction … We play games to escape." Microsoft's strategy is "absolutely flawed," he said.
Now it's entirely possible that Pachter was not being quoted entirely accurately, or only a small portion of a longer quote might have been used. In the context of the article, though, and if the quote is accurate, he is wrong.
Wrong, wrong, wrong.
He would be right if I were the only person playing games, because I absolutely don't play games for social interaction. I don't do anything for social interaction, really. So I do play games to escape.
However, there's a demographic divide at work here. I'm on the side that started playing games and developed gaming habits when modems were slow and relatively useless.
On the other side of the demographic divide is a bunch of 12-25 year old who get two hundred I.M.'s each day. They've turned computing (and gaming) from a personal experience into a social experience. And that demographic is much, much more important to the future of the gaming business than I am.
Microsoft is dead-on with their online strategy. It's exactly what they should be doing to target the most critical demographics. The gamers that don't want to be social (me) don't have to be. For the ones that do, though, they have a well-developed network that's both reliable and feature-rich.
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