Tuesday, September 13, 2005

Welcome to the Michael Pachter Channel

Here's an excerpt from the e-mail:
I would like the opportunity to correct a couple of misperceptions that may have been created by the press. First, I told the NY Times reporter that I doubted that there were 4 million people who would pay $10 - 15 per month for more than a year without tiring of the experience of playing a single game. Somehow, that got translated to no more than 4 million online. I agree that there are 100 million who would play online games for free, fewer at higher price points. I also think that the success of WoW will attract a lot of new online games, each of which will compete for a slice of the total market. Even if you think that the number is 10 million that will pay $10-15 per month, the total will be sliced 10 ways, so it will be tough for any game to attract and retain 4 million users.

Second, my EA upgrade is forward looking. You're right that growth has been stalled, and the share price has been stalled for a long time (the stock was $52 in October 2003). I'm just making an observation about how I THINK that they've turned the corner, and can deliver operating leverage on modest revenue growth. I'm calling for 10% compound annual revenue growth for the next few years, and think that they've made a significant investment in R&D that will pay off as the new consoles ramp.

His analysis of online games, in particular, is significantly different (and far more nuanced) than how it was quoted in the New York Times.

They misquote me all the time, too. Bastards. That's why I no longer take their calls.

Michael Pachter, as it turns out, is funny and far more civil than I am. A low bar, I know, but he leaps over it nonetheless, and I appreciate him taking the time to write.

I'm still waiting for an e-mail from Steve Balmer.

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