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A New Era of Video Games: The End of Shovelware
I have a Wii & 360, and while I love my 360 games, MSFT poor customer service & horrible quality have me thinking that if the shovelware buyer is the fool...then all 360 owners are those fools, myself included. Almost everyone I know has had their 360 break down and some up to three times. The hard-cores are hard-core, that's for sure...some would say hard-core stubborn.
My Damn Super Nintendo from 1991 still works, but my 360 only made 2.5 years? Shovelware is perhaps a kind word to use...thank god the games are good, as the 360 is perhaps the least reliable machine in history.
And this year's top seller, my good man, is not GTAIV (I own TTWO), its MarioKart.
Wait until the end of the year and you'll see.
The future will be with the first machine that does Wii motion controls coupled standard hardcore gaming graphics with Gears of War style, but clearly the days of the joystick rulling the roost are numbered. I'm not sure why people don't get this, the average person has 0 interest in 16 buttons. Again, I love hardcore gaming, GTAIV is the best game this year and perhaps ever...but the future lies in non-traditional joysticks that will take GTAV and put it to good use.
As far as stocks, I am long TTWO (waiting for another ride up to cash in once again), THQI has they could be taken over and I would avoid ATVI and ERTS. I would also not be suprised in seeing Japanese companies buy out or merger with one these, maybe Capcom or Konami to give it more weight and depth worldwide.
UBISoft I would say now is the 2nd largest in the world and I too would recommend them. Paris Stock exchange.
GameStop Has Received an Undeserved Beating
Personally, I see the industry turning and quickly on Gamestop, because anyone who goes in their knows 1) the salesclerks almost unanimously prefer to recommend used games over new ones, which is why companies are offering freebees for 1st time buyers of new games and 2) Gamestop does an awful job of promoting the Wii, almost ragging on it and its customers as it sees fit. Anyone who shops at Gamestop regularly knows that your treatment will depend on whether or not the minimum wage clerk approves of your purchase.
I beleive in the short term their maybe a bounce in this stock, BUT, long term it is doomed as we approach fully downloadable games and with the industry finally paying attention and fighting back GME's blattant used car sales tactics.
GME is not the friend of the companies...at all and I beleive that will cost them in the long run.
Expect Plenty of M&A Activity in Gaming
What about Capcom? They have stated specifically that they are looking to partner with a Western Interest...question is who? TTWO provides very strong western games that would have great synergies with a Japanese oriented producer and hence, reach a very wide array of potential global customers.
Konami also needs a shot in the arm, perhaps they are looking to broaden their scope as well.
With the Yen being so strong and with the stocks in the US publishers in very weak Dollars (at least compared to the Yen, which could go as low as 80 to 1 with the Dollar), Japanese companies may never have a better time or opportunity to snatch up some Western Rivals.
Take-Two Should Be a Bigger Acquisition Target
I made some good returns buying early on at $13, selling during the takeover battle and I would advise anyone to buy shares now for a long term hold.
Given the current recessionary environment, the lack of confidence in anything as well as the living fro news to news market action, in the short term all of these stocks could still go further down and by short term I mean six months to a year.
Microsoft's Xbox 360 Surges Ahead of the Competition
I won't even comment on the piracy comment, as that is ridiculous.
First, I don't see how the 360 is considered elegant. Bruce, are you just saying these things to get reactions? The damn machine breaks down all the time, red ring of death anyone?! There's nothing elegant about that, period! Come on now.
Second, I'm not so sure I agree with the best catalogue comment...for what audience? Hard core crowd, for sure. Mass audience crowd? Hell no! I hear more regular people talking about getting Wii's for Wii Sports, Wii Fit, Guitar Hero or Rock Band than anything else. And what about Mario Kart? Clearly, its going to be the best selling game this year. So I would say the answer to that question depends on exactly who is answering it.
The reason the 360 is selling better is PRICE and that is it. The sales chart on the hardware matches the price cut, so that is it. While people may discover Xbox Live is a great system, once they own it, no one I've ever spoken to outside of a hard core gamer (who has a 50% chance of owing a 360 since the PS3 IS the only other choice) has ever said...mmmm,I'll buy a 360 for Xbox Live. That simply doesn't happen. But a price drop? I know at least two people who said they would buy one in response to lower cost.
Its all about price, always has been, always will. Unfortunatly, without the hard-drive at $199, the 360 is still behind the Wii valuewise.
General Electric: Genuine Risk of Collapse?
I have been buying GE shares at these levels and will continue to do so. I disagree with the poster.
And Forbes or Fortunes, whoever made that chart showing the different branches of GE and their earnings over time, should be given credit as that was ripped off straight from one of their articles from last week.
In the end, I'll take Buffett's opinion over anyone else's but mine...and I agree with Buffet.
GE is still the world's most profitable (read they make money STILL) finance company and while it is required to refi its debt over time as that is the way the financial aspects are structured, it does not mean it is a poorly run company. It simply means the system in place at the moment does not work...it doesn't mean the company is losing money hand over fist, it simply a victim of the current environment.
When GE starts reporting losses than that's one thing...but that hasn't happened.
The Future of Gaming: Why EA and Take Two Have It Wrong
In addition, San Andreas is now available for download via Xbox Live. Good games always sell...ask Nintendo about its back catalogue of games. Super Mario Bros. still sells...and they're many SMB type catologue games that always will sell.
While I understand the bloggers point, I would say the blogger doesn't understand "CORE" gaming. Yes, this segment of the gaming world is probably stagnant to slow growing, it is still the highest money maker per title. I love gaming, including social gaming...but my money mostly goes towards the traditional games, whether on the 360 or the Wii.
I have a Wii and 360...and I've looked a super casual net gaming and quite frankly it holds no appeal to me what-so-ever. However, I can recognize it will hold some appeal to others who would never play GTAIV. But I would argue I spend much more than those people would, even if they outnumber me 100-1...over a year, I'll outspend them.
I cannot imagine ever being sastisfied simply playing a free game on the net...that's for the non hard core crowd, which is fine and perhaps can be profitable down the road, but that doesn't take away from traditional game makers profitability. They are two separate pies...a hard core gamer used to Xbox Live, the Wii or PS3 isn't suddenly going to dumb down his entertainment choices due to a new group rediscovering simple gaming and lets not forget gaming was already larger than movies before the Wii and mass gaming...so again, two different pies.
IE- the core crowd which is large and quite ample with their money is not going to suddenly give up Madden or GTA. At the same time, someone like ERTS or TTWO should also not sit on their laurels and just depend on old fashion game sales either.
To me, the succesfull company in the future will do both, in the same way Toyota sells the Yaris as well as a huge Lexus....different customers want the same product, but tailored to different tastes. Forward looking companies will do both, as you need the revenue stream from both to truly be succesfull.
But don't get ERTS long and well documented struggles fool you...that's them.
As long as you are innovative, you can keep coming out with the same games, but innovation is the key...EA does not innovate, NTDOY does...and sure enough, what a difference in performance.
Electronic Arts: What Is the Problem?
I can't say I can argue with that logic, given the stock collapse. But one has to wonder what one would be buying with EA? Spore? The Sims? The sporting games? I don't know...I would hope for better and newer IPs, outside of SPORE I guess.
Either EA's leaving the faucet running or the its developers are way over paid, as clearly, its costs are way out of line with its revenues. No wonder it wanted TTWO (who beat out earnings, what 5 quarters in a row now?).
It'll be interesting to see who, if anyone, makes a bid. Disney? Universal (GE?)? Time Warner? Merger with UBIsoft or someone else?
I must say the price of the shares are very attractive due to their slide, but their current weak performance is very unattractive...if EA can't make money in this environment, it speaks of severe internal cost issues and mismanagement.
Video Game Stocks: Beyond the Economic Slowdown
As far as THQI, it is a buy at these levels, as is TTWO. But TTWO to me, could be the next ATVI as the quality of its games are tough to beat. Nothing can hold a candle to GTAIV and one can only hope they reinvest the money towards more franchise. The release of GTA Chinatown DS should further drive sales, even if the DS isn't exactly a hard core machine, it will see simply due to how many DS are out there.
I would rank all the Cos. in this order:
1. ATVI- Top of the game, but again, it cannot fall into the EA trap of doing sequels year after year, as you end up killing franchises with over-saturation. Guitar Hero will be the next big ATVI franchise to fall, the same way Tony Hawk fell.
2. UBISoft-up & coming, beats all forecasts and has a nice wide array of games. Its partially owned by ERTS. I could see this company merging at some point.
3. TTWO- Truly, the talent here is vast. Can they resign the Houser Twins? That is the biggest question at TTWO and expanding its lineup. I rank them 3rd based on potential.
3. ERTS- Puts out a lot of games, but the quality isn't quit there yet, although progress is being made. If Rock Band leaves EA and MTV publishes it on its own, it would be a big loss. Its sporting business also needs help or simply a breath of fresh air, as most games feel like cut & paste from the previous version. The losses and missed earnings estimates is great cause of concern.
4. THQI- barely any debt and tons of cash...they just need to put out better quality games.
5. KNM- Konami...big company, but not so big in the west. DDR franchise will get competition from ATVI's eventual Dance Hero. Its rock game is not very good...I could see a merger with a western partner.
6. Capcom- Said to be looking to merge with a western partner...TTWO? THQI? UBISoft? I'm sure the current financial mess is puttingt those plans on hold, althought the strength of the Yen vs. other currencies could facilitate this. But I doubt it.
Anyways, ERTS missed earnings today, while NTDOY reports no slowdown on its end the very same day (outside of effects of the Yen's strength), shows that customers look for value and quality games...I'm not so sure EA offers either at this point.
Activision Working on Popular 'Guitar Hero' Spinoff
Anyone who's played either Rock Band or Guitar Hero can tell you which game is better as well, so for me, I worry about this franchise for Activision...I also worry about Call of Duty, as at some point that will get old as well. The problem with releasing games each and every year of the same title is they get old real fast...ask Activision about Tony Hawk games, for example or simply ask EA, who for a while was putting out the same games over and over again.
With MTV/EA signing The Beatles onto Rockband for 2009, I repeat...the days of Guitar Hero's giant success are numbered, so ATVI will need to keep doing what its been doing, which is create new winners to replace the old ones.
Consolidation in the Gaming Industry During the Economic Downturn
GE: Struggling Short-Term, But Should Do Fine Long-Term
Long GE, especially at the current prices.
The Take-Two/EA Merger Saga Continues
Why Microsoft's XBox 360 Will Outsell Nintendo's Wii
Usually, you're pretty right on Bruce...but not this time. I disagree with almost all your points. In my opinion, the race is over and the Wii has won. I own a 360 & a Wii and yeah, I enjoy the 360 more (but not that much more), but hard-core gamers aren't the mass market and no...the mass market will not graduate to the 360 and its 10 buttons on one joystick. If they haven't move before historically, they won't move now...the Wii is not a gateway to hardcore gaming, its a gateway to regular gaming that brings people back to their youth when everyone could hope in and play a game of Pac Man, per say, like in the 80s at arcades.
The DS and its success proves it further. The mass market cares about having fun and the Wii delivers that much more efficiently (and all uncompassing) than any 10 button joystick supported console and that will never change.
Why Microsoft's XBox 360 Will Outsell Nintendo's Wii
The 360, in its true glory, requires 1) a hard drive that must be bought off MSFT ($100 at least) and a subscription to Xbox Live, if you want to have Xbox Live...which is the point. That's another $50 per year. What about the WIFI Antenna at $100? Its built in with the Wii and PS3.
So really, you either pony up more money in parts or you have to pay the $299 for the real 360. But no one who buys an arcade 360 will be able to experience the 360 for what it really is and you absolutly need to spend another $50 on Xbox Live. If anything, you're going to have pissed off uneducated parents who buy this thinking its ready out the box...when its not. Its misleading pricing.
So the true 360 pricinig remains at $350, if you argue that the 360 is superior...you need to have access to those features and that means hard drive and Xbox Live subscription.
The NES, SNES, Genesis, etc...all those who hit the magical sales drive of below $200...didn't need extra stuff to enjoy them fully. So while the price has been reached, it really hasn't as you need to pay more money to enjoy all the features of a 360.
What about the fact that you also need an HD-TV? The Wii, does not. In a recession, I don't see people ponying up $350 for a 360 and then $800 for a decent HD-TV.
What about the Red Ring of Death and the fact that many people refuse to get one due to the poor reps? I know someone who bought a new 360 Ultra or whatever the black model is and he got the RRoD in one month. That was in April or May, whenever GTAIV came out, o, so clearly, that's not solved. He played it for hours at at time with GTAIV and sure enough, RRoD. One month Bruce!
I'm not sure what traction you find in Japan, when the PS2 and every other system outsells it...selling 3k per week is fine and dandy if you're coming off selling 200 per week previously, but its still last place.
So I would have to disagree, especially as the Wii can lower its price much more as it is already profitable per unit and therefore, could easily be cut to $199 as well..
I expect to see a bump, but not that big of a bump as the true pricing is still at $350 if you want the whole 360 package.
This is not the same as the previous consoles in history...its a fake entry price point...you should know that Bruce.