The ever so lovable Wedbush Financial Security analyst Michael Pachter has finally brought down the hammer in what may be his last nail in Nintendo’s \”coffin\” stating that, \”Nintendo is a bad company with Iwata a poor CEO\”. A lot of criticism has been made against Nintendo of Japan CEO Satoru Iwata and his stubborn stance on keeping the Wii U price at a standstill which has been brought up by Pachter and Ubisoft. Iwata back in January stated that he would think the rise in 3DS XL sales would help recover the losses caused by lack of Wii U sales and that has not occurred.
Pachter ripped into and what he referred to as \”deeply rooted tradition\” way of marketing hardware (consoles) and sell it at a profit, support console sales with proprietary software, and when the console rakes in money they collect money from third party supporters for privilege of having their software put onto Nintendo’s console. Pachter mentioned Mr. Yamauchi, who is 70-years-old and one of the founders and shareholders in Nintendo , and that he barely has any stock in the company with only a meager 16% of the stock and that he should not be the main shareholder. He went on to say that Yamauchi and Iwata are living in basically a pipe dream hoping things will pick up again with Nintendo’s good old strategic recipe of business.
He has said countless times that Nintendo would be better off pulling a Sega and just go into selling software on a multi-platform scale rather then pushing hardware. But, he contends, going that route will never happen with old school Mr. Yamauchi in charge. He pointed out that Mr. Iwata has always done right but that for the last few years its pretty clear he hasn\’t and as long as he is CEO things can continue to get worse. He also said that once Iwata leaves then Mr. Yamauchi will get to choose a new CEO and that things would probably continue on a downward spiral. A few months ago when I interviewed him and asked him what he thought of Reggie Fils-Aime and if he was to blame and he pretty much gave the same response in his Pach Attack show saying, \”Reggie and the marketing team, they\’re great. They do what they can–you have to play with the cards that you are dealt.\”
As far as Nintendo goes they are not hurting at all and will not go bankrupt anytime soon. Pachter postively pointed that out saying,
\”The good news is Nintendo have something around $8-9 billion of cash on their balance sheet. When they lose money, they lose something like $1 billion and frankly I think next year their losses will be smaller. I think if they lose money it\’ll be $100-200 million. They can run for 50 more years and keep losing money, and they\’re not going out of business.\”
Despite that being a positive thing Pachter said that he is surprised investors are still sticking by Nintendo after watching stock fall from 63,000 yen to 8000 yen. He says that is critical once stock falls to cash value because there is nothing to invest in at that point and unless Nintendo starts to make more money investors will lose out. Pachter finished his rant by saying he’s not very optimistic about an investment in Nintendo and that if fanboys didn\’t like it they can just deal with it.
What do you think of Pacther’s latest rant? Leave a comment here at Nintendo Enthusiast.
Source: [Nintendo Insider]