I find myself in very strong disagreement yet again with Michael Pachter, a research analyst for Wedbush Morgan, a securities firm.
Wonder what I’m talking about? Here’s the link: http://www.gamasutra.com/features/20060911/wen_02.shtml
This is my favorite quote from the article:
“The digital distribution model is probably going to be extremely limited, and packaged products will likely rule for a long time. Digital downloads are not portable (you can’t take [them] over to your friend’s house), can’t be sold at garage sales, are limited to broadband households, and take up a disproportionate amount of disk space. I think that this will not approach more than 20% of the market for the next ten years or so.”
Here’s a great quote from back in 2005
“I don’t think there are four million people in the world who really want to play online games every month,” said Michael Pachter, a research analyst for Wedbush Morgan, a securities firm.
(source link )
And another one:
“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.
(source link )
A couple of things are crystal clear to me:
- Michael Pachter has not analyzed the gaming audience outside of the United States. In many countries (most notably Korea and China) PC based online gaming (which is effectively piracy proof) is where the action’s at, and it’s growing at a very substantial rate each year.
- He has not seen the heavy growth of digital distribution in both console and PC based gaming. Xbox Live and the PS3’s upcoming network service are both focused squarely at the next generation of digital downloading. To say it’s not going to go over more than 20% of the market is simply to ignore the realities of the online gaming space and where games are going in general. It’s also ignoring gaming on a worldwide basis. In China and Korea, getting games digitally is the predominant method. Even here in the US we’re doing around 3x that 20% for our own games, and if you look at the broader PC gaming space more and more first-run games are coming out day and date digital with retail. Even with the large file sizes, broadband speeds are increasing at a very rapid rate and you’re going to see console games making the same leap. To say it’s not going to be more than 20% of the market 10 years from now just strikes me as dead wrong.
He’s a very smart guy and I don’t want to say he’s off on a lot of his comments regarding the gaming space. In fact, for traditional retail channels.. he know’s where it’s at. But in the online space, he’s horribly off mark and I would encourage him to look at the worldwide trends and especially to just simply go online to look around a little more.
And one final thing - Michael, I’ll be happy to make a $1000 bet to be given to the charity of your choice that you’re wrong on digital distribution. I’ll even say it’s going to happen within the next 2 years and I’ll make that bet on both console and PC.
Smed
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