Interview: Into the Mind of Michael Pachter – Part OneBy Alex Co | May 26, 2011 | Interviews | 2 comments | Share
One will have a very hard time arguing that videogames are big business these days, and what do big industries need? Well, aside from an audience, they need analysts.
Analysts “predict” or make educated guesses on market trends, where the market is going, what brand will be hot this coming holiday season among other things.
One of the most, if not the most famous analysts out there today is Michael Pachter, from his show on Gametrailers, to industry people asking for his insight, the man is very visible in the videogame-scene today.
In this exclusive DeltaGamer interview, Pachter tells us exactly what he does for a living, what genre and games he enjoys and weighs in on hot industry topics.
(Disclaimer: Aside from style, all answers are left unedited)
DeltaGamer: A lot of people are wondering, what is it you do exactly?
I’m a stock market analyst for a brokerage firm. That means that I help institutional investors (mutual funds and hedge funds) make informed decisions about whether to invest in the 19 stocks I am a specialist in. My coverage includes the video game publishers, a haul of retailers, movie exhibition and rental companies, and a few others. I talk to investors all day long, and publish an average of five notes per week.
I’ve never been right about anything, but I’m often quite close...I’m consistently among the leaders in what I’m paid to do.Michael Pachter
DeltaGamer: What’s day in the life of Michael Pachter?
I usually get to the office at 4:15 or 4:30, check the news, respond to emails, and prepare for our daily call at 5 a.m. to discuss what is going on with the 450 stocks my firm covers (I cover 19). I’m on the call speaking 1 – 2 times per week, so occasionally get in earlier (today, I arrived at 3:30 to write a note). From 5:30 – 1 p.m., I’m generally on the phone with clients, and average around 15 inbound calls per day, most lasting only 10 minutes or so, but one or two lasting 30 minutes to an hour. In between calls, I respond to emails (I receive around 50 from clients daily), talk to the media, and read news on the industry.
I write notes in the afternoons (I write an average of five per week, so have something to write almost every day), and usually go home around 4 p.m. I also travel 60 nights per year, mostly visiting clients, which means that I often have to work evenings or weekends to catch up.
DeltaGamer: Which console are you more partial to these days?
I play on whichever console I get free games for. Most publishers send Xbox 360 games, but a few send PS3, and Nintendo sends Wii and DS games. I use all of them.
DeltaGamer: What are your preferred game genres? The latest game you remember finishing and the last game you enjoyed immensely?
I like RPGs the best, finished Fallout New Vegas last in that genre. I rarely finish other games, but have finished all of the Call of Duty games. I am currently playing Portal 2, easily my favorite game of the last two years, will finish it this week.
DeltaGamer: Do you have a preferred publisher or developer? By that, I mean a studio whose work you really like?
Bethesda is the most impressive studio for me, but Valve is catching up with Portal 2, a truly remarkable game.
DeltaGamer: To what do you attribute the gaming community’s fascination with you and your views?
I think that the gaming community responds to me because I’m visible. There are a lot of analysts, but none get sufficient critical mass to be recognizable. I’m there primarily because of Geoff Keighley’s work on Bonus Round, and was fortunate to be invited as a guest on the first show, which led to being invited back quite often. Those appearances led to the Pach-Attack, and in turn led to a large number of interviews. I’ve had a lot of exposure, so the gaming community can single me out as the voice of the greedy, stupid analyst.
DeltaGamer: What kind of influence do you think you and your opinions have in the industry and how your observation changes things?
I don’t think my influence is great at all. I would never presume to rank a game; rather, I forecast sales, which is my job, and which rarely leads to higher or lower sales. I may criticize management decisions at the publishers, but the managements tend to be self-assured, and few value my opinions enough to act on them. I really don’t think that I make any difference in the outcome of game decisions.
No pay for any media appearances. I am not permitted to work outside of my employment at WedbushPachter on media appearances & comments
DeltaGamer: How can someone be involved in your line of work? What does it take to become a Michael Pachter?
The analyst community is a small one (around 2000 people, covering everything from health care to semiconductors to automotive to software). The jobs pay extremely well, and since there are only a few of them, they are hard to get. The way to get one is to stay in school, study hard and perform well, then get a job at the entry level in the research department of a brokerage firm. If you’re good, you’ll be promoted. To be a video game analyst, you have to get really lucky (there are only 35 of them). I’m a lucky guy.
DeltaGamer: Do you get paid for doing appearances or on your show, Pach-Attack for Gametrailers or any other media appearances?
No pay for any media appearances. I am not permitted to work outside of my employment at Wedbush, as it creates the potential for a conflict of interest.
DeltaGamer: What would you say your ratio and accuracy is concerning your predictions and analyses?
I’ve never been right about anything, but I’m often quite close. The point is that I’m paid to help investors make decisions, which requires me to predict how much money the companies I cover will earn. I’m really good at that, and have been ranked the #1 software analyst for earnings accuracy twice in the last 10 years (that’s out of a population of well over 100 analysts), and have been in the top 20% every year but once over that period. So I’m consistently among the leaders in what I’m paid to do.
In preparing earnings estimates, I have to predict things like console launches, game releases, pricing, etc. I get all of those things wrong every time, but my errors tend to cancel one another out, so that my earnings predictions come out pretty close.
In part two of our interview, Pachter weighs in on Nintendo’s next console; what Sony and Microsoft might do to combat it, and we talk about the first-person shooter genre. Stay tuned!