Fact-Checking Me Fact-Checking Michael Pachter

So Michael Pachter was wrong in his guess that the PS3 would beat out the 360 in July.  Our friends at eat-sleep-game don’t have a problem with him; I, on the other hand, seem to bash him every chance I get.  So I thought I’d consider the possibility that I’m wrong, and look a bit more objectively at his past predictions.  Am I just being mean to the guy?

Using Kotaku’s Pachter Watch as a proxy for Pachter himself, I’ve taken the last 10 verifiable predictions that Pachter made in reverse chronological order in order to determine if those predictions were True, False, or Undetermined (e.g., if we haven’t hit the timeframe that the prediction took place in, or I can’t verify the answer).  Here’s how Mr. Pachter did:

Of the last 10 such predictions, Pachter has gotten 3 correct,  4 wrong, and 3 unverifiable.  In the worst case scenario, he’s got a 30% accuracy rate; in the best, 60%; and if the remaining 4 predictions turn out like the verifiable ones, he’s batting 40-50% at most.  I don’t consider those to be very good results for a professional analyst, whose job, needless to say, is based on his ability to correctly analyze and make predictions about his industry specialty. 

I should note that I still have nothing personal against Pachter.  But I fail to see why someone should be paid a salary on the basis of such predictions if they’re not demonstrably better than a coin toss at getting them correct.  You wouldn’t pay a mutual fund manager a 1.5% fee to track a stock index, because their “skill” is indistinguishable from luck.  Why wouldn’t you base your gaming knowledge - and potentially your investment dollars, if you’re considering game company stock - on a similar premise?

Herewith, the predictions.

Prediction 1.)  The PS3 would use its price drop to shoot ahead of the 360’s sales figures in July.
Verdict 1.) False.  The 360 managed to pull ahead despite the drop in price.

Prediction 2.) The PS3 will drop in price for GTA IV and the PS2 will drop in price for the holidays.
Verdict 2.) Undetermined.  It hasn’t happened yet, but that’s not to say it’s impossible in the future.

Prediction 3.) The Wii will go HD in 2-3 years (I know there’s some debate here, but rereading this Pachter seems to say fairly clearly that this is the Wii 1, not some hypothetical sucessor - hence the introduction of an “HD Wii”).
Verdict 3.) Undetermined (but Probably False).  I can’t prove this to be incorrect - and won’t be able to for 2-3 years - but considering it goes completely against Nintendo’s stated strategy, I can’t imagine this is going to happen.

Prediction 4.) In the latest quarter-end, Activision will exceed its estimate of $0.08/share, EA will be line with guidance, Midway will fall slightly below estimates, and THQ will be in line with the $0.025/share estimate.
Verdict 4.)  False.  According to this Forbes piece, the consensus Thompson Financial estimates for Midway were a 21 cent/share loss, and they beat that, losing only 16 cents per share.  THQ reported a net loss of $0.14.  It’s true that Activision did beat its estimate by 1 cent… and EA was in line with the guidance, but the guidance was a $50M range, and they were at the edge of that.  Since Pachter’s a financial analyst, and he was only able to accurately predict 1 of the 3 results for which he had a real estimate, I’m saying fail on this one.

Prediction 5.) Microsoft would cut 360 prices at a July 10 press conference, and that prices would drop to $399 (Elite), $349 (Premium), and $249 (Core).
Verdict 5.) False.  Prices didn’t get cut for a month afterwards, and only the Premium price estimate proved to be correct (both the Elite and Core systems remain at significantly higher price points of $450 and $280 respectively.  Sorry, he gets no bonus points for predicting the simple fact of a future cut, since cuts were A) inevitable in the life of the console, and B) rumored for months.

Prediction 6.) Take 2 will “fix” Manhunt 2 and rerelease it at a cost of $1M.
Verdict 6.) True.  This was just announced on 8/24.

Prediction 7.) 200 of Take 2’s 2100 employees would get pink slips after their $50M loss.
Verdict 7.) Undetermined.  I can’t find a figure anywhere to describe exactly how many people were laid off.  I wouldn’t be surprised if it was more.

Prediction 8.) May NPD figures would show a 16% year-on-year increase in software sales to $333M, while hardware sales would continue to decline.
Verdict 8.) False.  Game sales surged nearly 50% to $815M, while console sales were up a whopping 79% from the previous year.

Prediction 9.) Final Fantasy will remain a PS3-specific franchise. 
Verdict 9.) True.  Square has shown no interest in porting the (main) franchise to the 360 or the Wii.

Prediction 10.) GTA IV will be delayed.
Verdict 10.) True.  GTA IV has indeed been delayed, although whether the PS3 is the cause of those delays is not verifiable.

Update: Since an M-rated Manhunt 2 was announced today, I’ve revised the post slightly.