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Pachter Claims That Nintendo Is A Bad Company With A Poor CEO


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#1 golf1410

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Posted 11 March 2013 - 11:15 AM

I pulled this out from the article. What do you think?

Famed Wedbush Morgan analyst Michael Pachter has spoken out against Nintendo during the latest edition of his Pach-Attack show. Pachter says that Nintendo president Satoru Iwata is a poor CEO who has ultimately done a terrible job at running the company. His opinions came as part of a segment on the show, where he was asked whether or not Nintendo will leave the hardware business.

“Having to? No, never,” Pachter said. “Wanting to? Not while their biggest shareholder is Mr. Yamauchi who I believe is around 70, 71 years old, and not while Mr. Iwata is CEO. I think those two guys are deeply rooted in tradition in the past, in what made Nintendo great. And I think that the Nintendo formula for success for the last 35 years has been manufacture a console, sell it at a profit, and support console sales with proprietary software. And then when your console sells well, collect royalties from third-parties for the privilege of putting their software on the console.”

However, Pachter believes “that model is broken for Nintendo.

“I think Nintendo is no longer able to compete the way they did in the past and sell their consoles at a big profit,” he continues.

“I think that the Wii, when it first launched they were probably making about $100 of profit per unit. I think the DS when it first launched was probably generating about $50 of profit per unit. The 3DS I think is barely making a profit. The Wii U I think is barely making a profit – I’m talking 5 or 10 bucks per unit.”

“But I don’t think they realise that yet,” he adds. “And that’s a business decision, so this is a criticism of Mr. Iwata, not of Reggie [Fils-Aime, President & COO, Nintendo of America]. Reggie and the marketing team, they’re great, they do what they can. You have to… play with the cards that you are dealt. They’re dealt the Wii U, they’re going to do the best they can to market it and the best they can to get you excited about the software. So I love the US marketing guys, I think they’re phenomenal and I have no problem with any of those guys.”

“I think Mr. Iwata’s a pretty poor CEO,” he continues. “I think he’s done a very poor job running the company. I have a neutral rating on Nintendo, but I have to say only because their cash level supports their current share price. It’s a bad company that doesn’t make money.”

“Your question, will they have to exit the console-making business?,” continued Pachter. “The good news is, Nintendo has something around 8 or 9 billion dollars – billion – of cash on their balance sheet. When they lose money, they lose something like a billion dollars. And frankly, I think next year their losses will be smaller. I think if they lose money it’ll be $100m, $200m. They can run for 50 more years and keep losing money and they’re not going to go out of business. So they aren’t forced to do anything.”

“The stock has dropped to cash value so there’s no value in investing in it. The only way anybody is going to make money going forward is if Nintendo suddenly starts making money, and they’re not going to make money on hardware, not at these prices.”

He continued: “If Nintendo’s business is trying to make a profit, once they conclude they aren’t going to make any money on hardware, of course they should exit the hardware business. And if they were to put their software on multiplatform they would probably sell twice as much software. So I think Nintendo, if they were to follow the SEGA route, would be immensely more profitable, but it’s not in their DNA…

“When Yamauchi no longer is a shareholder [and] Iwata is no longer there, maybe, but I’d say they’re gonna keep fumbling around and keep trying to make money in hardware. Don’t think it’s going to work. I’m not particularly optimistic about an investment in Nintendo stock and I am a stock market guy so I’ve been pretty good about stock market investments.

“If you don’t like that answer, Nintendo fans, deal with it.”

I think he is right about CEO. He is kind of weak. I don't know.

Edited by golf1410, 11 March 2013 - 11:16 AM.


#2 Fiery

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Posted 11 March 2013 - 11:23 AM

Pachter was dropped as a toddler.



#3 Reversal

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Posted 11 March 2013 - 11:33 AM

Pachter was dropped as a toddler.

This^



#4 Blake

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Posted 11 March 2013 - 11:35 AM

ok



#5 routerbad

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Posted 11 March 2013 - 11:35 AM

I pulled this out from the article. What do you think?

Famed Wedbush Morgan analyst Michael Pachter has spoken out against Nintendo during the latest edition of his Pach-Attack show. Pachter says that Nintendo president Satoru Iwata is a poor CEO who has ultimately done a terrible job at running the company. His opinions came as part of a segment on the show, where he was asked whether or not Nintendo will leave the hardware business.

“Having to? No, never,” Pachter said. “Wanting to? Not while their biggest shareholder is Mr. Yamauchi who I believe is around 70, 71 years old, and not while Mr. Iwata is CEO. I think those two guys are deeply rooted in tradition in the past, in what made Nintendo great. And I think that the Nintendo formula for success for the last 35 years has been manufacture a console, sell it at a profit, and support console sales with proprietary software. And then when your console sells well, collect royalties from third-parties for the privilege of putting their software on the console.”

However, Pachter believes “that model is broken for Nintendo.

“I think Nintendo is no longer able to compete the way they did in the past and sell their consoles at a big profit,” he continues.

“I think that the Wii, when it first launched they were probably making about $100 of profit per unit. I think the DS when it first launched was probably generating about $50 of profit per unit. The 3DS I think is barely making a profit. The Wii U I think is barely making a profit – I’m talking 5 or 10 bucks per unit.”

“But I don’t think they realise that yet,” he adds. “And that’s a business decision, so this is a criticism of Mr. Iwata, not of Reggie [Fils-Aime, President & COO, Nintendo of America]. Reggie and the marketing team, they’re great, they do what they can. You have to… play with the cards that you are dealt. They’re dealt the Wii U, they’re going to do the best they can to market it and the best they can to get you excited about the software. So I love the US marketing guys, I think they’re phenomenal and I have no problem with any of those guys.”

“I think Mr. Iwata’s a pretty poor CEO,” he continues. “I think he’s done a very poor job running the company. I have a neutral rating on Nintendo, but I have to say only because their cash level supports their current share price. It’s a bad company that doesn’t make money.”

“Your question, will they have to exit the console-making business?,” continued Pachter. “The good news is, Nintendo has something around 8 or 9 billion dollars – billion – of cash on their balance sheet. When they lose money, they lose something like a billion dollars. And frankly, I think next year their losses will be smaller. I think if they lose money it’ll be $100m, $200m. They can run for 50 more years and keep losing money and they’re not going to go out of business. So they aren’t forced to do anything.”

“The stock has dropped to cash value so there’s no value in investing in it. The only way anybody is going to make money going forward is if Nintendo suddenly starts making money, and they’re not going to make money on hardware, not at these prices.”

He continued: “If Nintendo’s business is trying to make a profit, once they conclude they aren’t going to make any money on hardware, of course they should exit the hardware business. And if they were to put their software on multiplatform they would probably sell twice as much software. So I think Nintendo, if they were to follow the SEGA route, would be immensely more profitable, but it’s not in their DNA…

“When Yamauchi no longer is a shareholder [and] Iwata is no longer there, maybe, but I’d say they’re gonna keep fumbling around and keep trying to make money in hardware. Don’t think it’s going to work. I’m not particularly optimistic about an investment in Nintendo stock and I am a stock market guy so I’ve been pretty good about stock market investments.

“If you don’t like that answer, Nintendo fans, deal with it.”

I think he is right about CEO. He is kind of weak. I don't know.

If Iwata is weak as a CEO then Kaz and Andrew House are practically atrophied.



#6 Colinx

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Posted 11 March 2013 - 11:37 AM

I dont necessarily disagree, I mean Iwata isn't the best CEO..

However, pretty much the rest I disagree with me him on.


Edited by Colinx, 11 March 2013 - 11:38 AM.

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#7 Robotic Sunshine Commander

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Posted 11 March 2013 - 11:44 AM

Iwata is not a bad CEO by any means. He does his job well, is very well presented and knows how to handle a company.


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#8 alan123

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Posted 11 March 2013 - 12:09 PM

why does everyone keep jumping on Patcher ?

 

do you actually know what his job is ?

 

Patcher is a business analyst, he analyses business so people know weather they are a good company in invest in, Patcher doesn't just do games companies he does all sorts, there are loads of people who do exactly the same job as he does, the difference is that Patcher has put himself out-there & because he did so a couple of times the gaming media keep asking him his opinion on the games industry.

 

if Patchers children ask him to buy them a WiiU so they can play Mario, would he say no & not buy them one, of course not, but if his children said should they invest  in Nintendo stock, he would say no.

 

what Patcher says is no different to what a games reviewer says about a game & rates it.

 

when you read what Patcher says think about it as if you were thinking of investing money in the said company.

 

if Patcher didn't know what he was doing (making money for people) he wouldn't be doing it.



#9 routerbad

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Posted 11 March 2013 - 12:45 PM

why does everyone keep jumping on Patcher ?

 

do you actually know what his job is ?

 

Patcher is a business analyst, he analyses business so people know weather they are a good company in invest in, Patcher doesn't just do games companies he does all sorts, there are loads of people who do exactly the same job as he does, the difference is that Patcher has put himself out-there & because he did so a couple of times the gaming media keep asking him his opinion on the games industry.

 

if Patchers children ask him to buy them a WiiU so they can play Mario, would he say no & not buy them one, of course not, but if his children said should they invest  in Nintendo stock, he would say no.

 

what Patcher says is no different to what a games reviewer says about a game & rates it.

 

when you read what Patcher says think about it as if you were thinking of investing money in the said company.

 

if Patcher didn't know what he was doing (making money for people) he wouldn't be doing it.

That isn't the problem.  The problem is not that VG journalists keep asking his opinion, it's that he puts it out there all the time and tries to pass himself off as an industry expert.  I, for one, would never accept investment advice from him.



#10 alan123

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Posted 11 March 2013 - 01:22 PM

That isn't the problem.  The problem is not that VG journalists keep asking his opinion, it's that he puts it out there all the time and tries to pass himself off as an industry expert.  I, for one, would never accept investment advice from him.

 you have not understood a single word of what i posted have you ?



#11 routerbad

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Posted 11 March 2013 - 01:28 PM

 you have not understood a single word of what i posted have you ?

I do, I wasn't replying to the entirety of it, I'll be more careful from now on to only include in the quote that which I am responding to.



#12 DéliopT

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Posted 11 March 2013 - 01:40 PM

"If Nintendo’s business is trying to make a profit, once they conclude they aren’t going to make any money on hardware, of course they should exit the hardware business"

 

They aren`t going to make money on hardware (that is, big profits) they should exit... i wonder what words he will have for MS and Sony who probably won`t make as much money as Nintendo in this generation.
Not to mention the huge losses PS3 and Xbox 360 made for their respective companies:

"Specifically, using financial reports from the pair it is claimed that despite its tremendous success, Xbox 360 has cost Microsoft a total of $2.996bn. The news is even worse for Sony, with PS3 having registered a total loss for the company of $4.951bn." - http://www.mcvuk.com...and-ps3/0108917

 

Meanwhile, Iwata has brought Nintendo hundreds and hundreds millions of dollars and gets criticized as being a poor CEO.
It`s true that the launch of both 3DS and Wii U didn`t go as expected but 3DS is already making a profit and it has a great year ahead of it. Wii U might not be selling a lot of units but seems to have sold enough games to not cause damage.

 

When all is said and done both Wii U and 3DS will have made up for the losses and made them more money.
Iwata might have his flaws, but those same flaws don`t hurt Nintendo Nintendo in the long run.


 

 


#13 Big Boss

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Posted 11 March 2013 - 01:51 PM

Okay.

 

99 mill Wii's

30 mill 3DS'

 

Stock increasing

 

 

 

 

 

#failure.



#14 golf1410

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Posted 11 March 2013 - 02:12 PM

Guys, let put this in perspectives.
Someone said don't care about Patcher said. I think games companies like other companies, they need money to run the companies. What this guys is talking about is money. Sony and Microsoft are other way around. They both get money from other business segments such as electronic, tablets, operation systems, portable devices. But Nintendo has this. That is all Nintendo has. Wrong moves are burning company cash

#15 Zinix

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Posted 11 March 2013 - 02:14 PM

I want the drugs that Pachter is using. 


“Any state, any entity, any ideology that fails to recognize the worth, the dignity, the rights of man, that state is obsolete.”— Rod Serling, “The Twilight Zone” The Obsolete Man

Smoke meth. Hail Satan. Watch the yearly Twilight Zone marathons. Talk to dead people. Everyone is gay. Ignore people. Live life to the fullest.


#16 Fiery

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Posted 11 March 2013 - 02:22 PM

I want the drugs that Pachter is using. 

Do you care that they're illegal?



#17 Alex Wolfers

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Posted 11 March 2013 - 02:38 PM

Pachter is too not good to be legally executed.



why does everyone keep jumping on Patcher ?

 

do you actually know what his job is ?

 

Patcher is a business analyst, he analyses business so people know weather they are a good company in invest in, Patcher doesn't just do games companies he does all sorts, there are loads of people who do exactly the same job as he does, the difference is that Patcher has put himself out-there & because he did so a couple of times the gaming media keep asking him his opinion on the games industry.

 

if Patchers children ask him to buy them a WiiU so they can play Mario, would he say no & not buy them one, of course not, but if his children said should they invest  in Nintendo stock, he would say no.

 

what Patcher says is no different to what a games reviewer says about a game & rates it.

 

when you read what Patcher says think about it as if you were thinking of investing money in the said company.

 

if Patcher didn't know what he was doing (making money for people) he wouldn't be doing it.

We jump on Pachter because he is a dumb idiot who is almost always incorrect and thus incapable of doing his job.


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#18 tboss

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Posted 11 March 2013 - 05:28 PM

need a markit analist who had nothing to do with video games, spend several years getting versed in how there finances work, then make opionions. (no starting experance= no bias) then get him skilled while maintaining minimal bias. 

 

ninty losing money is unlikly. its how well they will do (# of sales + # of good games) that people want to see.



#19 routerbad

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Posted 11 March 2013 - 06:42 PM

Guys, let put this in perspectives.
Someone said don't care about Patcher said. I think games companies like other companies, they need money to run the companies. What this guys is talking about is money. Sony and Microsoft are other way around. They both get money from other business segments such as electronic, tablets, operation systems, portable devices. But Nintendo has this. That is all Nintendo has. Wrong moves are burning company cash

Nintendo can afford to burn some cash, because they have more money in the bank than Sony and Microsoft.  Microsoft at 6Bn for 2012, Sony at 8.  Now, keep in mind here, that those totals are for the entirety of those businesses.  It actually works out in Nintendo's favor here because all they do is make games and systems.  They are a gaming company first and foremost.  Sony and Microsoft entertainment divisions are small portions of their company, much of that money in the bank is there to fund their other business that provides more profit.  Nintendo have nearly 10Bn dollars that they could blow on gaming, whereas Sony and Microsoft are limited in how they can invest there.



#20 Klobb

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Posted 12 March 2013 - 01:51 AM

He can go shove a buttplug up somewhere dark. I'm tired of reading his trash and wish he'd stop writing such garbage. When will he realise Nintendo is actually far more successful than he thinks?


If you think Smogon ban stuff

"Just because they can't beat it"

You clearly don't play OU

You clearly have no knowledge of the metagame

And you clearly don't deserve to have an opinion.





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