Analyst Mike Wallace of UBS Securities is probably not a household name to even the nerdiest family. I doubt his parents remember who he is. They likely purged all memories of their son after reading one too many of his astounding stupid predictions about the video game market. I don’t know Mike Wallace, so I can’t say he is a bad guy, but if he doesn’t do anything besides come up with predictions and projections he changes every few months, he makes too much money.
In a recent GameSpot news article, Wallace predicts that the Xbox 2 will maintain its lead over the other new generation systems. I personally think this is a bad prediction because 3rd parties sell systems and PS3 will likely still lead in that department, so I decided to look up some more of this dynamo’s prognostications.
Ah ha, look at what I found. An article where Wallace is quoted as saying the PS3 will maintain Sony’s lead over Microsoft that was written a whole two months ago. I’d rather someone be consistently wrong than a flip-flopper, that’s why I voted for W three times. I think Sylvia Browne could do a better job at predicting the future of console sales than Wallace.
His old idea of Sony beating Microsoft may be traced back to his altered projection of how many Xbox 2s were making it to stores. In late October of last year, Wallace lowered his projection by nearly 50%. Apparently he also reads newspapers and heard about the manufacturing problems.
Besides making projections and predictions based off of recent news developments everyone is privy to, or modifying projections and predictions every few months to more accurately suit reality, Wallace also makes correct predictions that nearly anyone could have made. After the GBA SP came out, which addressed the faults of the original GBA, Wallace made it known that he thinks the original would fade from the market. Brilliant.
Another shocking prediction by Wallace – The PS2 won’t do that well online. Perhaps he had lived through the Dreamcast ‘s short lifespan and saw that even a system that comes with the necessary hardware can struggle to succeed online. Or perhaps he was alive during the days of the Sega CD and 32X and came to realize people tend to dislike buying add-ons and peripherals. I remember these events and I’m half the guys age (and probably make a fifth of his salary).
Maybe I’m being too harsh and Sony doing poorly online was a good prediction. A lot of people assume Sony is invincible and can just do whatever they decide they want to do. These people are unfamiliar with the company outside of the gaming realm. So let’s look at a conclusion by Wallace that my mother could have easily reached: Buying the ESPN license was good for EA’s sports games. Wallace expands on this a little bit, but before I link to what he said I’m going to talk it over with my mother.
Me: “Mom, would you say a video game company would be better off owning the ESPN TV stations rights or the NFL license, which means they have exclusive rights to use real football players’ names, teams, uniforms, etc.”
Mom: “What’s ESPN?”
Me: “Uhh, a TV station about sports. You’ve never heard of ESPN?”
Mom: “I flip through those stations but I don’t know what they’re called.”
Me: “Ok, so it’s a TV station. Now if a company has this stations license, do you think that’s worth more or less than having the NFL license?”
Mom: “I’d imagine the NFL license is better to have.”
Me: “You’re wrong and worthless.”
Good news, mom, Wallace agrees with your assessment. I’m going to give the game sites my mom’s email address in case they need any more predictions. At least I would if my mother had an email address and didn’t use the mouse with two hands.
I don’t know anything about finances or their analysts. I am willing to accept that having professionals making financial predictions isn’t completely dumb (a concession I’ve been told may be premature). We do not need these guys telling us about the game industry, though. Their predictions are entirely based on common knowledge and seem to be as accurate as anyone else’s. The sad truth is that when people read articles about how the Xbox 2 is going to beat the PS3, it slightly changes their perception of each console. Bad predictions are not only useless, they can change the market (much like bad election reporting can change elections). So, Mike Wallace, I charge you to predict when your predictions will be accurate and useful. My prediction is never.