With price cuts possibly on the horizon that could bring console prices closer to the Wii's territory, should Nintendo worry? "The Wii audience is not choosing between 360 and Wii," said Wedbush Morgan analyst Michael Pachter. "Either they will buy a Wii only, or they will buy both a Wii and either a 360 or PS3. So Microsoft is right to consider the PS3 as the competition and to ignore the Wii."

Sony is the one, says Pachter, with more to be concerned about regarding possible pricing and feature set changes for the Xbox 360:

"Consumers see two boxes with very similar game experiences, and have to decide if a 360 with a 20Gb HDD, no Internet adapter, a very well-thought out Live experience and an extraordinary game library is a better deal at $349 (or $299) than a PS3 with built-in Internet adapter, a 40Gb HDD, a Blu-ray disc drive, a weak online experience and a relatively thin library of games for $399," said Pachter.

Both Sony and Microsoft unsurprisingly declined to comment on rumors or on their future price strategy.

Said Pachter, "So far, Americans consider the value proposition a toss-up, while Europeans value the PS3 more. Lower pricing and/or enhanced features for the 360 could change that."

Casual gaming growth has been the primary driver for the industry over the last three years, the key player being the Nintendo DS. We believe DS hardware demand has now peaked globally. A downturn in software demand is likely to follow, as casual gamers are ‘happy with their lot’ and do not need to consume more. We feel that the same predicament awaits the Wii console with its similar market expansion angle. Titles such as ‘Brain Training’ and ‘Wii Fit’ do not act as ‘gateway drugs’ to turn non-traditional gamers to core repeat users. We feel this is a structural industry issue that cannot be easily changed.

Continuing, Kamide adds that he believes the industry is in for a slowdown after three years of strong growth. Yet, Kamide adds, "Despite low consumer confidence, we feel core gamers will remain relatively resilient in terms of demand for marquee titles." Meaning? In Japan, big games like Resident Evil 5, Street Fighter IV and Final Fantasy XIII should do well when released. Casual games? Well...

[Pic]

"I don't really think that Microsoft and Sony are doing badly - just doing badly in comparison to Nintendo," Pachter said. "It makes sense that PS3 and 360 are doing about the same... instead of saying 'what's wrong with Sony and Microsoft,' we should be looking at Nintendo and saying, 'how the hell do they keep doing this?'"

It's easy to peg the answers on the price discrepancies, but Pachter said that's not all there is to it, pointing to Nintendo's success in a mainstream market most gamers are less aware of. "There really are people who play games that don't read Kotaku - I know it's hard to believe," he said. "There are people out there who don't even know how to spell Kotaku, and don't even know that there are websites dedicated to games."

Calling the typical console-fanboy attitude "extremely myopic," Pachter added, "There are actually people out there who have sex. The people on Kotaku, other than their parents, they've never met anyone who's had sex."

Mainstream gamers are mad about Wii Fit, Pachter said, agreeing with fellow analyst Billy Pidgeon who predicted that the Wii would not balance its supply with demand until 2009. So no price drop for Wii anytime soon - but what about the others?

"You'll get a price cut," said Pachter. "I think if I were Sony, I would wait for the Fall, or for the Christmas lineup. There's no reason for them to cut it today [with MGS 4 out]."

Pachter thinks it's likely to see a $50 reduction in the PS3's price. "They'll go $100 if they can afford to," he said, possibly close to the release of LittleBigPlanet, taking a "family bundle" angle.

As for Microsoft, Pachter said they won't stand for having the 360 and PS3 on level pricing ground, and will probably implement their own price drop commensurately. "Madden was an event for Microsoft last year, so perhaps you'll get a 360 cut with Madden. But I think if I were Microsoft, I'd maybe cut it in front of Gears 2."

Pachter also anticipates possible future supply constraints for Wii, based on Nintendo's history of consistently underestimating demand - he also thinks their attach rate estimates for Wii Fit are a bit lower than they'll turn out to be.

The online outlet cites Gartner research analyst Bryan Lewis who, at the Design Automation Conference, said that MS "wanted to avoid an ASIC vendor," opting to use a general purpose chip designed in-house. ASIC means application-specific integrated circuit, according to my sources that are Wikipedia. The EETimes writes that the decision saved money up front, but ultimately cost the company over $1 billion in warranty related costs.

According to the EETimes, the chip at the source of the problem has since been redesigned by ATI.

See? Boring. A more interesting theory is that Bill Gates lost a bet with Satan and that the Devil's hellish minions use the Xbox 360's ring of light as a passage into our world, burning them out in the process. We've opted not to contact Microsoft for comment on this matter.

The truth about last year's Xbox 360 recall [EETimes - thanks, Kirk!]

Today, Ernst upped his estimate to 15 million on word from Take-Two that the publisher had already sold through 8.5 million copies of GTA IV, with 11 million shipped to retailers. Ernst noted that "We expect GTA IV sales to re-accelerate in the latter part of year in conjunction with the seasonal holiday period."

As for Final Fantasy XIII shipping 7 million in 2008?

Ernst said that "Initially we had hoped it would make it in for the end of the year" but that FFXIII "definitely appears off the table" according to Square Enix guidance. Frankly, we'll be thrilled (and maybe even a bit flabbergasted) if it hits North America before 2010.

The Hudson Square Research analyst updated us on a handful of other key figures, noting that Gran Turismo 5 is also expected to be a "no show" this year and that next week's release of Metal Gear Solid 4 "won't be enough to materially accelerate the PS3 this year."

"For the PS3, that’s definitely a set back," Ernst told us about titles that the firm expects to hit next year, "And I think is why their 10M unit guidance for the [fiscal year] was lower than most had expected."

Worldwide console sales can pass the $180 million benchmark by 2011 even in an economic slowdown, said the analyst group, since high gas prices encourage people to entertain themselves at home. While the report sees Wii as the likely overall install base leader, it is critical of Microsoft, stating that "for the 80 percent-plus of game consumers that do not play FPS games, the Xbox 360 is not the system of choice."

The sales performance of the PlayStation 3 has been less than stellar, but Sony has survived. The Xbox 360 was unable to take advantage of Sony’s struggles to build the type of large lead needed to maintain a long-term advantage. The PS3 survived the onslaught of AAA Xbox 360 titles that hit the market from late 2006 through 2007.

Halo 3 had great sales, but it did very little to enhance the Xbox 360’s overall position in the marketplace.

Full report and more stats than you can shake a Wii remote at:

Led by the PlayStation 2 (PS2), the “128-bit” generation of video game systems has reached a record global installed base that is expected to exceed 180 million units. Of course, the PS2 was the best-selling game system ever.

With high hardware prices and a slow start for most of the current generation of game systems (Microsoft Xbox 360, Nintendo Wii, PlayStation 3), DFC Intelligence had originally forecasted that it would not be until 2012 that the installed base for the current generation started to match that of the 128-bit systems.

However, 2007 was a record year on all fronts, as sales of PC and video games reached an all-time high and overall worldwide industry sales soared over the $50 billion mark. DFC Intelligence forecasts that sales for the current generation of systems will pass the $180 million mark in 2011.

Ironically, a slowing economy can actually help the game industry. Video games provide a high rate of entertainment return and high gas prices actually encourage people to stay home and play games. The latest DFC Intelligence forecasts predict that all three systems (360, Wii, PS3) will have a solid installed base. Nevertheless, it looks like the Nintendo Wii will be the overall installed base leader. The Wii has enormous momentum and appeals to the broadest audience.

In doing retail checks over Memorial Day weekend, the item that everyone was asking about was the just launched Wii Fit. However, none of the retailers we visited had any in stock. It is because of this type of demand that DFC believes in 2008, the Wii could set a record for most console systems sold in a single year.

Of course, many of the biggest games are not even coming out for the Wii. Halo 3 and Gears of War were exclusive to the Xbox 360. The upcoming Metal Gear Solid 4 is only going to be on the PlayStation 3. The biggest title of 2008, Grand Theft Auto IV, is only available for the PS3 and Xbox 360. In other words, for many third-party publishers the more important race is between the Xbox 360 and PlayStation 3.

Two years ago about this time, DFC Intelligence asked the question, “Could Sony Go From First to Worst?” At the time, our less than definitive answer was: maybe. We argued that much would depend on the execution of Sony and its competitors over the next few years. Two years later, DFC can say with more confidence that we do not think the PlayStation 3 will be the third place system. DFC forecasts that the PS3 will overtake the Xbox 360 in 2009 and finish in a strong second place behind the Wii.

The price of the PlayStation 3 has come down to a reasonable level and the software lineup is finally starting to look fairly strong. Most importantly, Sony was able to keep the PlayStation 2 installed base active. For its recently ended fiscal year, Sony Corp. reported that hardware unit sales of the PS2 were down by 7%. From our perspective we would say they were ONLY down by 7%. This is amazing for a system that launched in 2000. The PS2 managed to outsell both the PS3 and Xbox 360 in 2007.

The sales performance of the PlayStation 3 has been less than stellar, but Sony has survived. The Xbox 360 was unable to take advantage of Sony’s struggles to build the type of large lead needed to maintain a long-term advantage. The PS3 survived the onslaught of AAA Xbox 360 titles that hit the market from late 2006 through 2007.

Halo 3 had great sales, but it did very little to enhance the Xbox 360’s overall position in the marketplace. The Xbox 360 is the system of choice for fans of high-action first-person shooter (FPS) games. However, for the 80%-plus of game consumers that DO NOT play FPS games, the Xbox 360 is not the system of choice.

In our upcoming Genre Forecasting report, we look at expected sales by platform based on genre. While the Wii may have the highest installed base, there are not expected to be any mega-hit FPS titles on the platform. The average FPS title is expected to have 60% higher sales on the Xbox 360 over the PS3 and over three times the sales of the average Wii FPS game.

The biggest uncertainty in forecasting the market five years from now is estimating the impact future, unannounced systems will have. In building our forecasts, DFC Intelligence has assumed that some new systems will launch in the 2011 to 2013 time frame.

However, these forecasts are very hypothetical and are made under the assumption that a new generation of console systems will look very much like the past generation of game systems. This may not be the case, and right now we do not even know who the major players will be.

How soon will Nintendo want to launch a new system with the Wii being so successful? Will Microsoft still want to stay in the game business given their losses? Is Sony really serious about pushing the PS3 to a ten year plus life cycle? Will new game systems just be an extension of the current game systems with some enhanced features and services? These are questions we are currently unable to answer.

One thing that is worth noting is that DFC has built in different models for how fast the current systems will be retired and how heavy consumer purchasing of software will be for each system. We call these factors respectively the active installed base and software tie ratio.

The Xbox 360 has a high software tie ratio, but given technical problems among many early units it also has a fairly high retirement factor. The Wii has both a lower software tie-ratio and a higher than average retirement factor. On the other hand, one advantage with the PS3 is its durability and what is expected to be a fairly strong software tie-ratio in the long-term.

For this reason, the DFC Intelligence forecasting model indicates that software sales for the PlayStation 3 will surpass software sales for the Wii in 2012. Of course, by this time, software sales for all systems are expected to be on the decline.

The biggest story over the next few years may be the declining overall importance of the console systems. Last year Sony’s biggest selling game system was the portable PSP. Meanwhile, the Nintendo DS blew out all records for game system hardware unit sales (portable or console) in a single year.

From a pure revenue perspective, the biggest system for software sales in 2007 was the PC, if you include revenue generated from online services. Like we said, 2007 blew away sales records on all fronts. Right now it looks like 2008 will be even better.

Record Game Sales in 2007 Are Just the Start for the Soaring Video Game Business [DFC Intelligence]

May, however, could bring much bigger numbers with the release of Wii Fit—and maybe some of that Grand Theft Auto IV run-off—projected to increase 160% on the software side says Kaufman Bros. analyst Todd Mitchell. If we're looking at May 2007 numbers, that means we may see software sales alone top $712 million. Still chump change, but at least we're making progress.

Hardware dollars are expected to double, which makes us wonder just how amazingly fit this country will be by bikini season.

Bears hunt video game stocks [Reuters]

Pachter puts the PS3 slightly ahead of the Xbox 360, but the Wii is envisioned to outsell both combined. That may be largely due to Mario Kart Wii sales, but we suspect that a good portion of those Wii sold are simply due to rabid demand.

And, for the record, neither the PS3 or the 360 come close to Nintendo DS sales. In our fantasy world, Nintendo's statement about April's U.S. sales is simply the image above, in obscenely high resolution.

Pachter: Wii Outsold PS3 and Xbox 360 Combined in April [GameDaily]

The analyzing wizards at DFC see an Xbox future filled with doom and gloom, with the 360 "continuing to struggle" in Europe, despite UK acceptance. They have better news for the Euro industry as a whole, with 2008 expected "to break all kinds of sales records." And they all lived happily ever after. The end.

DFC: 360 Likely "Biggest Loser" in Europe [Next-Gen]

With an estimated 85% of Blu-ray playing devices being PS3s, Wilson says that those invested in the format should maybe concerned that owners of the console may actually be playing games on it. That's clearly trolling, Steve! Are you implying there are no PlayStation 3 games?

Analyst: PS3 a Crutch to the Blu-ray Market [Next-Gen]

It may be hard to match the already stellar beginning of the year, with nearly a billion U.S. dollars in software sales last month, but the second half isn't without some respectable hits. Metal Gear Solid 4, Gears of War 2, LittleBigPlanet, Halo Wars, Resident Evil 5 and maybe even a Nintendo published game or two are sure to stoke spending. But will it be enough as the economy sinks closer to Armageddon levels? I'm going to start using my left kidney less. Just in case.

Goldman says video-game sales have peaked [Marketwatch]

Casual gaming growth has been driven over the last three years by the Nintendo DS platform. Demand has peaked in Japan, and we believe is currently peaking overseas. Compounded by a less robust retail environment, we expect to see a decline in the handheld sector...

The firm pegs Wii Fit as the year's second biggest seller and provides estimates for 2008's other marquee titles, including Call of Duty 5 and Final Fantasy XIII. Wait, Final Fantasy XIII? Seriously?

Yes, the team at Hudson Square Research puts FFXIII's sales for the year at an impressive 8 million copies. Shocking, yes, but maybe not as shocking as Square Enix's PS3 epic actually shipping this year.

Less impressive sales are projected for Metal Gear Solid 4, though, with Ernst estimating only 6 million copies sold, less than Star Wars: The Force Unleashed and Gran Turismo 5 Prologue. Other highlights include Super Smash Bros. Brawl (9 million), Wii Play (8.8 million), Gears of War 2 (7 million) and Madden NFL 09 (7.5 million).

The figures, they certainly impress if they don't entirely convince. Given the impressive rise year-to-year sales leaps the industry seems to be making, we won't be surprised if some of this pans out by year's end.

Analyst: GTA IV to Lead All Game Sales in '08 with 13M Sold [GameDaily]

Don't despair, though, if you're holding a copy of Brawl with nothing to play it on. Mr. Pachter thinks that with European demand leveling off, Nintendo may shift some of those Wiis Stateside. Stop burning your Euros in protest, please. It'll just breed contempt.

Wii shortage may finally be near an end [Dallas News - thanks, Brian!]

Pachter also projected that said campaign won't "disproportionately benefit GameStop", instead going after non-core gamers who more regularly shop at retail outlets like Best Buy and Target. Sounds like Pachter is also implying that the targeting of non-specialty merchants may have an impact on GameStop's hardware business, keeping the games retailer from enjoying the warm waters of the Blue Ocean.

Fortunately, Pach and crew predicts that the sea of yellow stickers on its used games will help see it through the rough waters of lesser Wii allocation.

Pachter: GameStop To Lose Ground To Target, Wal-Mart? [Gamasutra]

Maybe he's right. I'm still in the honeymoon phase with my iPhone, but my hype level for using the accelerometer to game is on par with the prospect of further SIXAXIS gaming. That's hovering around zilch, currently.

Pachter: iPhone Gaming Not Commercially Sound [Next-Gen]

"In the US, I think it will be close all year, with 360 outselling PS3 most months due to its lower price points (at least as long as it remains lower priced)," Pachter told videogaming247. "Sony gains a huge competitive advantage when HD monitor sales pick up at holiday, as I expect retailers to push PS3 as a Blu-ray player to anyone buying an HD monitor. By year-end, I think PS3 will outsell the 360 in the US by a little."

Pachter on late 2008: "PS3 will likely outsell the 360 in Europe by 20%-40%, and will kill 360 in Japan" [videogaming247, via GamePro]

But this shouldn't come as any surprise. In fact, this estimate is more conservative than in the past. Join me on a trip down memory lane for just a moment, back to the wonderful world of July 2007. Back then, the Yankee Group said that by 2011, in-game ad revenue could reach $971 million. So while in-game ads are on the rise, they may not be growing as quickly as originally thought!

eMarketer: U.S. In-Game Ads Market to More than Double to $650M by 2012 [GameDaily]

There's been some changes to these results since the original article was released on Monday, due to the availability of new information. While this does change some of the numbers, it also indicates how fluid many of these predictions are, and the challenge of pin-pointing exact answers for many of them, both for journalists, traders who rely on the analysts for smart business choices, and gamers who want to know how well the industry is doing.

Here's the proof that being correct the most often doesn't always mean you're the best analyst.

Michael Pachter - Wedbush Morgan

June 4, 2007
Prediction: Take-Two will push back the release of Grand Theft Auto IV to the next financial year.
Outcome: TRUE
The release date of GTA IV was pushed back all the way to April 2008.

June 12, 2007
Prediction: In May 2007, the Wii will outsell the PS3 4 to 1, with the Wii selling 400,000, the PS3 selling 100,000, and the Xbox 360 selling 225,000.
Outcome: FALSE
The Wii did indeed outsell the PS3 4 to 1, but Pachter's sales predictions were a little high. The real numbers were Wii: 338,000; PS3: 82,000; and Xbox 360: 155,000 in the US.

July 10, 2007
Prediction: Microsoft will announce a price cut of $50-$70 at E3 2007.
Outcome: FALSE
No price cut happened at E3. Microsoft said they were comfortable with their price point, and didn't see a need to follow the way of the PS3.

September 5, 2007
Prediction: As the supply of 60GB PS3s dries up, the 80GB model may well be reduced to $499.
Outcome: TRUE
Right again. Consumers saw a drop in the price of the 80GB PS3 to $500 in October 2007.

September 14, 2007
Prediction: Halo 3 will drive the sales of the Xbox 360, which could exceed selling 400,000 units in September 2007.
Outcome: TRUE
Microsoft sold 527,800 Xbox 360s in the US during September, doubling the number of consoles sold in a month. Pachter also predicted in the same article that 3 million copies of Halo 3 would be sold in the first twelve days. Between September 25 (its release date) and October 5, Halo 3 was estimated to sell just over 5 million copies.

December 10, 2007
Prediction: There will be a 24% jump in November software sales from 2006 ($804 billion) to 2007 (estimated $1 billion).
Outcome: TRUE
Software sales from November 2007 in fact exceeded market expectations, reaching $1.3 billion.

December 14, 2007
Prediction: The previous December sales record is $1.7 billion, which will be shattered December 2007, likely in excess of $2 billion.
Outcome: TRUE
Mr. Pachter got it right on with this one. December 2007 saw sales revenue of $2.37 billion.

December 14, 2007
Prediction: Unreal Tournament III, MX vs ATV Untamed, and the PS2 version of Rockband will top December sales.
Outcome: FALSE TRUE
Pachter was right about one thing: Guitar Hero III for the PS2 took #3 in December sales, selling 1.25 million units. But how wrong he was about UT3 and Untamed, which saw disappointing sales. The winners for December were instead Call of Duty 4: Modern Warfare for Xbox 360 with 1.47 million units sold, and Super Mario Galaxy for Wii, selling 1.4 million units.

EDIT: Pachter has contacted me to make a correction to this prediction. He said that his prediction were those would be the top three games released in December, not top three sellers for the month. So it looks like Pachter gets another point, after all!

December 19, 2007
Prediction: Mass Effect will be coming to the PS3.
Outcome: FALSE
Sony has come out and made a statement that there is currently no Mass Effect in the works for PS3. They said it's possible... but don't hold your breath.

December 25, 2007
Prediction: John Woo will want to make more video games, as that's what action movie directors want to do now.
Outcome: TRUE
As out to left field as this prediction sounds at first, Pachter may be on to something. I'm not sure about all action film directors, but the success of Stranglehold has certainly put John Woo in the mood for video games. Woo founded Tiger Hill Entertainment in 2003, and has said he intends to continue bridging the gap between video games and films, particularly with his upcoming video game and film releases for Ninja Gold, a project he is working on with video game creator Warren Spector.

Accuracy: 6/10 7/10

Colin Sebastian - Lazard Capital Markets

May 17, 2007
Prediction: A new PSP will be unveiled by Sony in 2007.
Outcome: TRUE
September 2007, consumers were introduced to the redesigned PSP slim, just like Sebastian said (although his prediction came out after months of speculation that Sony had something in the works).

May 25, 2007
Prediction: Wii shortages could last through the 2007 holiday season and into 2008.
Outcome: TRUE
Despite meeting Sebastian's monthly target of 1.5 million units made and sold, Nintendo still suffered shortages for the second holiday season in a row.

August 21, 2007
Prediction: The PS3 will outsell the Xbox 360 in July 2007.
Outcome: FALSE Not Sebastian's Prediction
Sorry Mr. Sebastian, no dice. While sales of the PS3 jumped from 98,500 units in June 2007 to 159,000 units in July 2007, it wasn't enough to conquer the Xbox 360, which sold 170,000 units that month.

EDIT: Sebastian contacted me to clarify that while he said the PS3 would sell more and the Xbox 360 would go down, he never said that the PS3 would outsell the 360.

September 13, 2007
Prediction: Halo 3 will generate $200 million in revenue "very quickly".
Outcome: FALSE
While Halo 3 didn't make $200 million in 24 hours like many were expecting (only $170 million, how sad), Sebastian only says "very quickly." I could walk to the corner store "very quickly," but that could mean 5 minutes or half an hour, it's all relative. By the end of its first week, Halo 3 had made $300 million in revenue, which I'd still call "very quickly," but not the 24 hour blitz that most interpreted Sebastian's words to be.

October 2, 2007
Prediction: GameStop will be the real beneficiary of holiday video game sales, with total holiday revenue reaching $1.42 billion.
Outcome: FALSE TRUE
Sebastian's estimate was nearly $1 billion off the mark, as GameStop raked in $2.3 billion during the nine-week holiday period.

EDIT: The prediction made by Sebastian was referring to the Q3 earnings, not the holidays - despite the fact the prediction article doesn't distinguish this. Sebastian was much closer to the actual Q3 earnings, at $1.6 billion.

October 11, 2007
Prediction: September 2007 will see a 30 percent increase in software sales from September 2006.
Outcome: FALSE
It was certainly close. Thanks to sales from Halo 3, software sales rose from $446 million in September 2006 to $550.5 million September 2007. A significant $104 million increase, for sure, but that's only a 23.4% increase from the year before - not quite the 30% that Sebastian said it would be.

October 31, 2007
Prediction: In addition to Wii shortages, PS3 and Xbox 360 consoles will also be in short supply.
Outcome: FALSE Not Sebastian's Prediction
Sony and Microsoft both saw improved sales of their consoles during the holiday season, neither would be considered hard to come by or in any sort of shortage. The Xbox 360 didn't see the strain on supply until after the holidays.

EDIT: Sebastian clarified that the article containing this prediction was misleading, and he never predicted a shortage in PS3s.

December 13, 2007
Prediction: Wii will top hardware sales, although PS3 and Xbox sales will improve going into the holidays due to price reductions.
Outcome: TRUE
Despite supply setbacks, the Wii came out on top in hardware sales, moving 1.35 million units over Holiday 2007. Xbox 360 had a record month of sales, too, selling 1.26 million units, up 11.5% from the previous holiday season. The August price reduction certainly helped, as weekly sales improved from that month onward. The PS3 also saw a much-improved holiday, as it was up 62% from its sales at the same time last year, selling 797,000 units. This was also due in part to price drops in July and October, as well as the introduction of the 40GB model.

December 13, 2007
Prediction:Activisions November sales will double.
Outcome: FALSE
While there is no specific data for the month-on-month increases from Activision, we can compare Activision's Q307 improvement from Q306. They almost doubled revenue, from $142.8 million in 2006 to $272.2 million. Very close, but close only matters in horseshoes and hand grenades.

December 13, 2007
Prediction: Electronic Arts will see a 15-20% increase in sales in November, thanks to sales of Rockband, The Orange Box, and The Simpsons Game.
Outcome: TRUE
In the Q3 report, EA boasts that Orange Box and Rockband drove its 'strongest ever quarterly performance', and The Simpsons Game sold 4 million copies, and is what EA claims to be the 'highest rated entertainment-based game of 2007'. While the company did see a net loss of $33 million, they did see an increase in net revenue over Q307, jumping from $1.281 billion last year to $1.503 billion this year, a 17% increase.

Accuracy - 4/10 5/8

Jesse Divnich - The simExchange

August 17, 2007
Prediction: The PS3 will sell 165,000 units in July.
Outcome: FALSE
The PS3 only sold 159,000 units in July.

September 4, 2007
Prediction: The 80GB PS3 will drop in price by $100 to $499 in order to stay competitive in the North American environment.
Outcome: FALSE TRUE
While at first it looked like it would be Japan only, the 80 GB PS3 saw a price drop in North America late October.

EDIT: As Divnich has clarified to me, the prediction was actually true, since there wasn't a timeline placed on the prediction.

October 17, 2007
Prediction: The Wii will sell 485,000 units in September, despite the competition from Halo 3 and the Xbox 360.
Outcome: TRUE
The Wii sold better than estimated, moving 501,000 units.

October 19, 2007
Prediction: The PS3 will sell 153,000 units in October.
Outcome: FALSE
The PS3 only sold 121,000 units in October.

October 20, 2007
Prediction: The price cut of the PS3 will not affect its overall market share (i.e. it will remain in last place of all the consoles).
Outcome: TRUE
The price cut helped move more PS3s, going from 121,000 units in October to 466,000 units in November, but it still lagged behind all other available consoles - heck, the PS2 still sold 496,000 units in that same month.

November 9, 2007
Prediction: Activision will be the top third party publisher over Holiday 2007.
Outcome: TRUE
Activision's title Call of Duty 4: Modern Warfare topped sales charts in November and December.

November 9, 2007
Prediction: Super Mario Galaxy will sell 2 million units in November, and 1.99 million units in December (both in the U.S.).
Outcome: FALSE
Super Mario Galaxy sold 1.12 million copies in November, and 1.4 million copies in December.

November 9, 2007
Prediction: The Wii will sell 466,000 units in October, 806,000 units in November, and 2.2 million units in December (US sales).
Outcome: FALSE
The Wii sold 519,000 units in October, 981,000 units in November, but only 1.35 million units in December, likely due to the limited availability.

November 9, 2007
Prediction: US December software sales will surpass $2.2 billion.
Outcome: TRUE
Software sales totaled $2.37 billion in December.

January 15, 2008
Prediction: Hardware sales for the US in December will be as follows: Wii - 1.73 million units; Xbox 360 - 1.45 million units; PS3 - 854,000 units.
Outcome: FALSE
The Wii sold 1.35 million, the Xbox 360 sold 1.26 million, and the PS3 sold 797,600.

Accuracy: 4/10 5/10

Evan Wilson - Pacific Crest Secuities

January 24, 2006
Prediction: Europe won't get the PS3 until March 2007.
Outcome: TRUE
This shouldn't be terrible impressive, since he predicted this the day before the official announcement was made, but that hasn't stopped analysts from being wrong in the past. Wilson was correct (for once) about the European release date, as the PS3 went on sale in Europe on March 23, 2007.

August 21, 2006
Prediction: The high price point of the PS3 will not dissuade consumers, and it will sell out during the holiday season (2006).
Outcome: FALSE
Oh, how wrong he was. While the Wii sold out both Holiday 2006 and 2007, PS3s were still readily available both years, especially pre-price cut.

March 12, 2007
Prediction: Availability of the Wii will not improve until April 2007.
Outcome: TRUE
The Wii shortage finally saw hope in April, with the announcement of a Wii shipment the week of April 24.

April 3, 2007
Prediction: The PSP was not selling well due to the higher price point, and the price reduction should help fix that problem.
Outcome: TRUE
Following the price drop, Sony claims they have seen a 90% increase in PSP sales since the price drop came into effect.

June 11, 2007
Prediction: May 2007 will see sales figures increase to $320 million, up 12% from the year before.
Outcome: FALSE
Wilson's predictions were a little short. Software sales were up 33.2% from the previous year to $380.8 million.

July 5, 2007
Prediction: Microsoft is likely to lower console prices closer to the holidays, while Sony might not be inclined to cut console prices any time soon.
Outcome: FALSE
Ouch. Just four days after saying that the PS3 wouldn't be seeing a price cut in the near future, Sony announce they're dropping the price of their 60GB model by $100. Bad call, Wilson. And I'd hardly call the August 8 price cut of the Xbox 360 close to the holidays, so I'm thinking that Wilson was pretty wrong on both counts.

November 5, 2007
Prediction: The Guitar Hero franchise alone could provide $200 million in growth for Activision.
Outcome: FALSE - AT LEAST ACCORDING TO HIMSELF
Just over a month after Wilson predicts Activision's growth based on Guitar Hero, he shows concern that Activision will have troubled growth, despite first week earnings by Guitar Hero III: Legends of Rock of $115 million, which kind of negates his earlier prediction, doesn't it?

November 15, 2007
Prediction: A new Nintendo DS is waiting for release when the sales of the DS Lite trail off.
Outcome: FALSE
Nintendo has openly discredited this claim, and called the rumours "utter speculation". I'd check my sources next time, Mr. Wilson.

November 15, 2007
Prediction: EA will cut prices on 14 of its most popular sports franchises in time for the Holiday 2007 shopping season.
Outcome: FALSE
Despite the sluggish sales of a number of EA Sports titles, including Madden 08, no price cut actually occurred. It was a good suggestion, but not one that EA was prepared to take.

January 14, 2008
Prediction: December 2007 will have sales 26% higher than December 2006.
Outcome: FALSE
Ooh, so close! Normally I'd give Wilson the point, because he was only off the percentage growth by a teensy 2%, but Michael Pachter was able to call it exactly right at 28%, and I feel I should give credit where credit is due. December 2007 saw a total revenue of $4.82 billion dollars.

Accuracy: 3/10

Mike Hickey - Janco Partners

May 17, 2006
Prediction: The cost of making games for the PS3 could alienate some third party publishers.
Outcome: TRUE
Third party publishers were alienated because of the cost (and the fact that the PS3 was floundering throughout 2007), so Sony did something about it and cut the cost of developer's kits.

July 24, 2007
Prediction: In Q208, EA will execute a "quantifiable cost reduction plan."
Outcome: TRUE
EA decided to do this in the form of restructuring the company (i.e. layoffs) eluded to in their Q2 earnings report and announced late October/early November.

October 16, 2007
Prediction: The drop in box office sales can be blamed on the launch of Halo 3, and could last for several weeks.
Outcome: FALSE
Turns out people just didn't like the movies that were out there. In a look at the weekend box office returns of the top 10 movies for each weekend, movies were struggling even before Halo 3's launch: in the four weeks of September (Halo 3 being launched before the last weekend), the revenues were approximately $63 million, $61 million, $76 million, and $73 million. As for the four weekends of the October box office: $61 million, $81 million, $72 million, and $82 million. Of course, once the holiday movies hit in November, box office returns jumped: $124 million, $95 million, $92 million, $142 million, and $69 million. Even Halo 3 couldn't stop the onslaught of holiday movies and their subsequent box office returns.

October 16, 2007
Prediction: Holiday 2007 will see a shift away from the casual Wii games market to the hardcore gamer 360 market.
Outcome: FALSE
The top ten titles sold during the holidays did not contain what most would consider games for the hardcore gamer. Call of Duty 4: Modern Warfare snuck in down the bottom at number ten, but the rest of the list is the standard fare of Mario, brain training, and Wiimote-waggling.

October 29, 2007
Prediction: Activision's key fiscal game sales for Q208 and 2H08 will come from Spiderman 3, Shrek 3, Transformers, Guitar Hero, Tony Hawk, Call of Duty 4 and Enemy Territory: Quake Wars.
Outcome: FALSE
Activision's top titles for Q208 were Guitar Hero II (Xbox 360), Guitar Hero: Rock the 80's (PS2), Spider-Man 3, TRANSFORMERS: The Game, and Shrek the Third. Call of Duty 4: Modern Warfare was the top-selling title of December, so it's fairly safe to say that it will be a moneymaker for Activision, too. But due to the release of Skate around the same time as Tony Hawk, the sales of Tony Hawk will likely not be as high as Activision would hope.

October 29, 2007
Prediction: There will be significant sales of Call of Duty 4: Modern Warfare during the holiday period.
Outcome: TRUE
Call of Duty 4: Modern Warfare topped sales charts in December, selling 1.47 million copies. I'd call that significant.

November 26, 2007
Prediction: Video game sales will help motivate overall holiday sales.
Outcome: TRUE
If online sales are any indication, video games were a big driving force during the holiday retail season. Online purchase of video games, consoles, and accessories saw a 129% growth in sales from the previous year.

January 4, 2008
Prediction: Holiday sales are expected to be around $2.027 billion for GameStop.
Outcome: FALSE
Gamestop sales were even higher than anticipated, reaching over $2.3 billion.

January 4, 2008
Prediction: There's no reason to think video game sales would be weak over the holidays.
Outcome: TRUE
From Gamestop racking up over $2.3 billion to online video game sales increasing by 129%, it's safe to say that video game sales were strong.

January 4, 2008
Prediction: Price target for GameStop (around the holidays) is $68.
Outcome: FALSE
At no point between Nov.1 and Dec. 31 did Gamestop's stock reach $68. The highest point it hit was $63.77 on December 7.

Accuracy: 5/10

Jeetil Patel - Deutsche Bank

November 12, 2006
Prediction: Nintendo will sell approximately 1.5 million Wiis in the US by the end of 2006.
Outcome: FALSE
The Wii had only managed 1.1 million life-to-date sales by the end of 2006.

November 16, 2006
Prediction: The Xbox 360 will do better than the PS3 in Holiday 2006 sales.
Outcome: TRUE
The Xbox 360 sold 1.1 million units in December, while the PS3 only sold 490,000 units.

November 16, 2006
Prediction: Activision and UbiSoft will benefit the most from holiday sales.
Outcome: FALSE
UbiSoft didn't see any of their titles in the top 10 list for December,

November 16, 2006
Prediction: Nintendo will have the biggest retail presence this holiday.
Outcome: TRUE
The DS was the top selling hardware with 1.6 million units, the Wii was the second-highest selling home console with 604,200 units, and four games in the top 10 software titles list (Legend of Zelda: Twilight Princess - GameCube, Legend of Zelda: Twilight Princess - Nintendo Wii, New Super Mario Bros, and Yoshi's Island 2) in December. Take into account the difficulty of finding a Wii in time for Christmas, Nintendo definitely seems to have the biggest retail presence of Holiday 2006.

November 16, 2006
Prediction: The PSP appears to be losing its luster this holiday.
Outcome: TRUE
PSP sales dropped dramatically from the sales numbers two years prior. The PSP-2000 (Slim) came out shortly after, however, which boosted sales.

March 16, 2007
Prediction: Overall sales of next-gen consoles are weaker than this point in the previous cycle, and their sales could further disappoint.
Outcome: FALSE
While it is difficult to compare this generation to compare to the previous one, recent data from the UK showing that the PS3 is selling faster than the PS2 did, indicating that this cycle is plenty strong, at least for one console.

March 16, 2007
Prediction: A price cut for the PS3 is critical, but likely won't happen until at least April 2007.
Outcome: TRUE
The words "at least" are what save Patel here. The price cut didn't happen until July.

October 12, 2007
Prediction: VG Holdings should provide Electronic Arts with solid long-term content.
Outcome: TRUE
As the parent company of Bioware and Pandemic studios, it is likely that EA will benefit from having the two developers under its umbrella, with four as yet unspecified projects from Pandemic and an assortment of projects in the works from Bioware, including an upcoming partnership with Lucasarts.

October 12, 2007
Prediction: The poor quality of EA products could translate into ongoing market share losses.
Outcome: TRUE
EA stayed fairly consistent in the markets around the $55 mark up to the end of the year, but has since dropped to below $45, closing last week at $44.57.

October 19, 2007
Prediction: The PS2 may finally be on its way out of the industry for good.
Outcome: FALSE
The PS2 continues to outsell the PS3 - at least for now - and showed strong sales, moving 496,000 units in November, 1.1 million units in December (that's more than the PSP, as well). Combine that with the rumor of a $99 PS2 sometime this year, and it looks like the 7-year-old system still has some life in it yet.

Accuracy: 6/10

Mitsuhiro Osawa - Mizuho Investors Securities Co.

May 18, 2005
Prediction: The rush for digital cameras in Japan had its peak last year, and the US is about a year behind that.
Outcome: FALSE
Digital camera sales have picked up again in Japan.

May 7, 2006
Prediction: Sony's business model of producing cell chips in volume will fail if they cannot sell PS3s in volume as well.
Outcome: TRUE
Apparently Sony's plan is faltering, as they have to keep changing what their strategy is. The term "business model" is kind of loose, since Sony seems to be changing it as often as some people change their socks, but I'm certainly not seeing any great payout to having the PS3 Cell chips produced in volume.

August 31, 2006
Prediction: Canon stands to be the leading manufacturer of multifunction copiers for the next little while, following the release of their new models.
Outcome: TRUE
At the end of 2007, Canon was still the top copier manufacturer.

November 10, 2006
Prediction: Sony won't be able to ship 6 million PS3s by the end of March 2007, because there won't be enough machines to go around.
Outcome: FALSE
Sony only managed to sell 4.28 million units by the end of March 2007, but it wasn't because there weren't enough machines. There were plenty to go around! People just didn't buy them.

May 16, 2007
Prediction: Sony will make an operating profit (overall) of ¥380-400 billion this year.
Outcome: FALSE
At the end of Q3, Sony has already made a profit of ¥379.2 billion for FY2008 in operating income. It's very likely Sony will far exceed Osawa's expectations, as the lowest operating profit Sony pulled in a fiscal quarter was ¥90 billion, and January to March 2008 shouldn't be radically lower.

May 16, 2007
Prediction: It remains to be seen whether Sony can turn around its losses in the game division.
Outcome: TRUE
Four months after this prediction, Sony is looking for help from its other divisions to help recoup their losses. Sony did see improved sales of the PS3 over the holiday season, but like Osawa said, whether it'll be too little too late to recoup its loses remains to be seen.

May 16, 2007
Prediction: The key to success with the PS3 is launching a more cost-effective version with a 65-nanometer process technology, instead of the current 90-nanometer.
Outcome: TRUE
Following the sale of the Cell chip technology to Toshiba, the processor has become more cost effective with a 65-nanometer processor, but shrunk further to a 45-nanometer processor.

September 4, 2007
Prediction: A price cut for the PS3 is one option to recover the faltering system.
Outcome: TRUE
The price cut this time around was Japan only, but since that's where Osawa is based, I think we can give him this one.

October 26, 2007
Prediction: A lack of strong software titles will make it almost impossible for Sony to meet its target by the end of March 2008 of 11 million units globally.
Outcome: TRUE
While March 2008 hasn't arrived yet, it is looking unlikely. Sony still remains overly optimistic, but the Bloomberg report only pegs Sony at selling 8 million units worldwide.

December 24, 2007
Prediction: Toshiba is losing its strong investment in the flat TV business.
Outcome: FALSE
With the release of this ultra-thin framed television, Toshiba appears to be continuing its innovation in the television industry.

Accuracy: 6/10, but some were pretty wishy-washy, and some weren't about video games.

Richard Doherty - Envisioneering Group

August 8, 2005
Prediction: The PS3 release date will be on track with Sony's estimate of Q206.
Outcome: TRUE
The PS3 was released in North America November 17, 2006, which is in Sony's second fiscal quarter.

September 14, 2005
Prediction: Whether the Xbox 360 launches Nov. 20 or Dec. 5, Microsoft will sell through every unit they can deliver before New Year's.
Outcome: TRUE
Xbox 360's were tough to come by around the holidays in 2005.

November 4, 2005
Prediction: iTunes may no longer be compatible with the Xbox 360 following its launch, because the Xbox 360's interoperability with the iPod is not Apple-endorsed.
Outcome: FALSE
While none of Apple's FairPlay protected tracks work on the Xbox 360, they never would have in the first place. In terms of Doherty's suggestion that Apple would change iPod connectivity, that never happened.

May 10, 2006
Prediction: The console war will be a challenge for Nintendo, because the PS3 may now have greater appeal to the same older people and non-gamers Nintendo is going after.
Outcome: FALSE
Nintendo has sold many, many more Wiis than Sony has sold PS3s, so other than not having enough to units to go around, Nintendo is doing fine.

July 26, 2006
Prediction:Sony will take first place in the console war, with Nintendo possibly being able to take a few percentage points of the market share from Microsoft.
Outcome: FALSE
So, SO wrong. By the end of 2007, it was pretty clear that the PS3 was getting trounced in global lifetime sales. Midway through December 2007, global lifetime sales were as follows: Wii - 16.97 million units, Xbox 360 - 15.06 million units, PS3 - 7.75 million units. No matter how you slice it, the PS3 is not number one in any way. (In another interview in November, Doherty changes his prediction, instead saying that the PS3 will win at the end of the decade, or the halfway point of this console cycle.)

November 14, 2006
Prediction: The PS3's glitches will be ironed out by Thanksgiving.
Outcome: TRUE
Sony offered a firmware update before the November 23 deadline that Doherty suggested.

July 9, 2007
Prediction: Many of the sales that would have gone to the Xbox 360 will go to the PS3 following the PS3 price drop.
Outcome: FALSE
While this is kind of a "we'll never know for sure" sort of scenario, it doesn't look like the price drop of the PS3 crippled Xbox 360 sales. The PS3 went up 135% in units sold over the previous month, going from 81,600 units in May to 98,500 units in June. The Xbox 360 also went up in number of units sold, though, from 155,000 units in May to 198,400 in June.

July 9, 2007
Prediction: BD+, the DRM in Blu-ray discs, won't be hacked for ten years.
Outcome: FALSE
Give hackers some more credit, Doherty! By November 2007, hackers had just about made it through the code, only six months after the release.

July 9, 2007
Prediction: The $100 price cut of the PS3 will make it a lot more appealing to third party developers, and the discount will give Sony the advantage over the next six months.
Outcome: FALSE
The console price cut wasn't enough, as by November, Sony had to cut the price of their developer's kit in half in order to try and win back third party developers.

July 10, 2007
Prediction: Nintendo and Sony will benefit in the coming months from the announcement of Microsoft extending the Xbox 360's warranty (due to unacceptable failure rates).
Outcome: FALSE
Microsoft craftily got around this by dropping the price of their system shortly after the announcements of the extended warranty and Sony dropping their price, so while Sony sold more PS3s than the previous month, the Xbox 360 didn't lose any ground.

Accuracy: 3/10

Piers Harding-Rolls - Screen Digest

December 14, 2006
Prediction: Sony will see a net income of around ¥80 billion by fiscal year end, March 2007.
Outcome: FALSE NOT HIS PREDICTION
Sony's net income for FY2006 was ¥126.3 billion, leaving Harding-Rolls' prediction short by nearly ¥40 billion.

EDIT: Mr. Harding-Rolls contacted me, and clarified that he did not make this prediction, it was Sony's estimate.

October 4, 2007
Prediction: Halo 3 will be a system seller over the next few months.
Outcome: FALSE TOO OPEN TO INTERPRETATION
Halo 3 sold systems, but nothing record breaking. In fact, Holiday 2007 saw sales of the Xbox 360 fall below pre-Halo 3 levels. It might have sold more systems, but not as many as during the same period the previous year.

EDIT: While I interpreted the prediction as Halo 3 improving the sales of the Xbox 360, Mr. Harding-Rolls, has clarified that his prediction does not suggest that, and that it is too difficult to prove whether Halo 3 sold systems over the next few months or not.

December 18, 2007
Prediction: The Wii will win the console battle of Holiday 2007.
Outcome: TRUE
Gee, what a surprise, the Wii outsold the PS3 and the Xbox 360. Over the month of December, the Wii sold a total of 1.35 million units, with the Xbox 360 selling 1.26 million, and Sony claiming they sold 1.2 million.

Piers Harding-Rolls' Future Predictions

December 17, 2007
Prediction: Sony's exclusive content will result in better results for the PS3 in 2008.
Outcome: PROBABLY TRUE
The biggest struggle for the PS3 so far has been a lack of titles, and with upcoming PS3 exclusives announced, including big name series titles likeFinal Fantasy XIII, Gran Turismo 5, and Metal Gear Solid 4, it would be surprising if PS3 sales didn't pick up once these games are released.

December 17, 2007
Prediction: Being "multimedia hubs" is key to Sony and Microsoft's strategies.
Outcome: UNKNOWN
It's likely that this would be part of their marketing strategy, as being a multimedia hub is one thing the best-selling Wii doesn't have. As for whether this is concrete enough to be provable, though, remains uncertain.

December 28, 2007
Prediction: By 2011, sales for the PS3 will have caught up with the Wii, due in part to better games being available in 2008.
Outcome: UNKNOWN
This prediction is so far in the future, it will not only be unprovable for a while, but there is a solid likelihood people will forget about this prediction by the time it comes to fruition (or not).

January 11, 2008
Prediction: 2008 will be a "golden year for games retail."
Outcome: PROBABLY TRUE
There's a decent offering of 2008 games from Nintendo, Sony, and Microsoft, so it's likely that the gaming industry will likely have another strong year. One question, though - what exactly constitutes a "golden year"?

January 11, 2008
Prediction: The reality of PS3 and Xbox 360 as multimedia hubs will happen in the next 12 months.
Outcome: UNKNOWN
At least this multimedia hub thing now has a date, something many of Harding-Rolls' predictions are lacking. It's still too early in the year to say if it will be true, and it really depends on what peripherals and support for the PS3 and Xbox 360 become available, too.

January 11, 2008
Prediction: Good trading conditions for video game stocks will continue in 2008.
Outcome: UNKNOWN
This is a very broad, sweeping statement. With so many video game stocks out there, there will be fluctuations and changes in trading conditions throughout the year, as some publishers, developers, and retailers will have better years than others.

EDIT: The quote refers to retail trading conditions, not stocks.

January 11, 2008
Prediction: 2008 game sales will eclipse 2007 by "a vast some margin."
Outcome: UNKNOWN
Who knows what "a vast margin" is. Millions? Billions? Even if this were provable now, there would be no way to give this a concrete true or false.

Edit to the quote highlighted by Mr. Harding-Rolls.

Accuracy: 1/2, 7 not provable at this time

Billy Pidgeon - IDC

July 27, 2004
Prediction: The N-Gage QD will be a viable SKU in Nokia's line-up six months from now, but not in a year.
Outcome: FALSE
The N-Gage QD was "so popular", that they released the N-Gage QD Silver Edition in August 2005 for Europe, Africa, and the Middle East.

September 29, 2004
Prediction: There is a huge unrealized potential in wireless games, and Jamdat is poised to continue to lead in the sector.
Outcome: TRUE
Jamdat was so impressive to EA, in fact, that EA bought Jamdat to lead its mobile game division.

August 15, 2006
Prediction: World of Warcraft will inspire copycat games, but these will ultimately fail.
Outcome: FALSE
That may have been true, if it weren't for Lord of the Rings Online. While it doesn't have near the same number of subscribers as WoW, LOTRO became the #1 selling PC game in North America and Europe last May, only five months after the release of World of Warcraft: The Burning Crusade.

September 27, 2006
Prediction: Halo 2 will boast an array of capabilities (like the customizable maps and more) that will turn Xbox Live into a YouTube of self-made games.
Outcome: FALSE TRUE (see update below)
At the midway point of December 2007, Microsoft was still pushing for more user created content opportunities, leaving the impression that it's hardly the self-made utopia Pidgeon makes it out to be.

UPDATE: It wasn't widely popularized in news articles, but according to Microsoft's press event at GDC, it was announced that 100,000 Halo 3 films are uploaded every day, 30% more than are uploaded to YouTube. The outcome of this one has definitely changed.

October 19, 2007
Prediction: By the end of 2007, 14 million online console gamers will be active online in North America.
Outcome: FALSE
There are 10 million registered Xbox Live users, and two million registered PSN users, which falls just short of the prediction. There aren't any easily available numbers for the number of online players for the Wii, but that's mostly because there's been limited use of the Wii's online features up to this point, so assuming there would be as many online players as PSN would be far too generous.

October 19, 2007
Prediction: In North America, online console revenue will triple from $133 million in 2006 to $583 million in 2007.
Outcome: NOT ENOUGH INFORMATION
Since this was made so close to the end of the year, there isn't any information available yet to determine if he's right or wrong, but since Mircosoft is putting so much hope in their online gaming service, you have to imagine that it's hoping to bring in an awful lot of money from the online services.

October 19, 2007
Prediction: Video game console software sales through traditional third party online and retail stores will see a 19.5 percent revenue growth over 2006.
Outcome: NOT ENOUGH INFORMATION
Widespread information on online revenue is near-impossible to come by, and therefore cannot be proven at this time.

October 21, 2007
Prediction: By 2008, over 37 million console units will be installed in North America with online capability.
Outcome: FALSE
This is a poorly worded prediction. Since he's talking about games being better than movies, you'd assume he were talking about home consoles, which totaled 19.78 million between the Wii, PS3, and Xbox 360. The number is so low, he can't possibly be talking about that. Throw in the PSP at 10.47 million units and the DS at 17.65 million units, and you total 47.9 million. So Pidgeon is either way over, or way under. We're going to assume he was talking about home consoles, and that makes him wrong.

November 9, 2007
Prediction: The big third party developer winners for Holiday 2007 will be Activision, EA, Ubisoft, and Disney.
Outcome: FALSE
Activision, Electronic Arts, and Ubisoft all had games that placed in the top 10 of December, and were the only three third-party publishers to make it in. Disney, however, did not make that list.

November 9, 2007
Prediction: The biggest sellers for each of the platforms over the holiday will be Mass Effect for Xbox 360, Super Mario Galaxy for Wii, and Ratchet & Clank for PS3.
Outcome: FALSE
The top 10 games list for the holidays didn't see any PS3 games make the list, but the Xbox 360 prediction was wrong, anyway, as Call of Duty 4: Modern Warfare was the top seller for the system.

Accuracy: 2/8, 2 not answerable at this time

We've all seen their work. "Analysts predict PS3 price drop by September." "New DS to be released by Nintendo." "Wii will be the top selling console of 2007." Analysts seem to descend from their mountaintops once a month to tell us the future of the video game industry. So what secret rituals do these soothsayers conduct to get their predictions? And, more importantly, how often are these predictions right?

After a look at ten analysts, 100 predictions, and first hand accounts from video game industry analysts Michael Pachter of Wedbush Morgan Securities and Jesse Divnich of The simExchange, and founder of The simExchange Brian Shiau, we managed to gain a little bit of insight into the murky crystal ball used to prognosticate and pontificate.

So what is an analyst, anyway?
Video game analysis is big bucks. Stocks in gaming companies are bought and sold every day, and traders rely on the advice of analysts of what stock to buy, since many of those who trade stocks don't know much about the game companies or consoles themselves.

"Because most investors can choose from 12,000 different stocks, few are very well-versed in any specific stock," Pachter said. "Equity analysts cover around 15 stocks, and because the number is limited, the analysts are able to know everything about the stocks that they cover. That makes them 'experts', and their knowledge is valued by institutional investors."

Traditional analysts such as Pachter collect all the information they can about the companies they cover and their products, quantify that information through number crunching and spreadsheets, then present models and predictions to their clients in meetings and through reports. These traditional analysts are more concerned with companies as a whole, not with specific games. Games are only relevant in terms of how much revenue they will generate for a company.

A variation on this kind of analyst is the research analyst, like Billy Pidgeon. In a GameTrailers TV interview with Geoff Keighley, Pidgeon explains that as a research analyst looks at the historical sales data of consoles and games, and from that makes predictions about trends, the install base for consoles, and increasingly the future of online gaming. Research analysts compile this data into reports, which are then sold to other analysts. Pachter says that the audience for a research analyst is anyone who is interested in the video game industry sales, while his audience is primarily investors.

The simExchange works differently, and instead uses a prediction market. Divnich bases his forecasts for the industry on the trading of fictitious stocks in games and consoles by over 8,000 members of the website. Stock traders of The simExchange base their decision on three video game factors: global lifetime sales, US monthly sales, and metacritic rating, which summarizes how favorably the game reviewing community received the title. Anyone can join The simExchange.

"It looks like it may be a bunch of people who aren't very informed," Brian Shiau of The simExchange said, "but what happens in the prediction market is people are putting their money where their mouth is."

The main qualifications necessary to become a more traditional analyst are mostly business-based and not so much about video game experience, although a healthy appreciation for gaming definitely helps.

"At a minimum, most equity research analysts have either an MBA or a CFA designation," Pachter said. "Beyond that, there are no hard and fast qualifications."

Reputation and accuracy in fact seem to be what matters most in becoming a good analyst.

"Believe it or not, the qualifications are pretty low," Divnich said. "You just need to have a strong understanding of both the video game industry and financial markets. If you have that, it simply takes a lot of hard work to prove yourself among your peers and if you are truly good at what you do, advancements will fall in your favor."

What we wanted to find
With analysts handing out predictions about every gaming system and many of the top games, you have to wonder how often they actually get it right. We did. So Kotaku went on a mission: Find ten analysts, find predictions for each of them, and prove them right or wrong. Simple, right? Actually, easier said than done.

While some analysts make concrete predictions, such as how much money a game will make in the US for a specific month, other analysts seem to dwell more in the realm of hazy, undefinable predictions. This latter group make predictions that are very general, or they make predictions that won't be provable for another few years - at which point, their prediction will probably be long forgotten.

For the study, we looked at ten different analysts:

• 
  
• - Michael Pachter, Wedbush Morgan Securities
• 
  
• - Colin Sebastian, Lazard Capital Markets
• 
  
• - Piers Harding-Rolls, Screen Digest
• 
  
• - Jesse Divnich, The simExchange
• 
  
• - Evan Wilson, Pacific Crest Securities
• 
  
• - Mike Hickey, Janco Partners
• 
  
• - Jeetil Patel, Deutsche Bank
• 
  
• - Mitsuhiro Osawa, Mizuho Investors Securities Co.
• 
  
• - Richard Doherty, Envisioneering Group
• 
  
• - Billy Pidgeon, IDC
• 
  

Osawa also proved an interesting anomaly for the group, as he does not cover video game companies exclusively, like a number of other analysts. He didn't make ten predictions about video games specifically, but he did make predictions about other technologies, including televisions, digital cameras, and photocopiers.

The Results

No analyst was completely wrong, but no analyst was completely right, either. Billy Pidgeon was the lowest scoring of the analysts, with only one out of seven of his provable predictions correct (meaning even if all of his predictions were provable, he wouldn't be able to score higher than four out of ten predictions right, still at the low end of the results).

The highest-ranking analysts (still with only six out of ten) were Pachter, Patel, and Osawa, but that doesn't necessarily mean they were the best at predicting overall. Both Patel and Osawa made very generalized predictions that had a greater chance of being correct. For example, while some analysts gave dates for when they suspected the PS3 price cut was coming, Osawa simply said that a price cut would be one option to help the system's sales. Likewise with Patel, who said the price cut wouldn't happen until at least April 2007, meaning the July 2007 price cut the PS3 saw still qualified Patel's prediction as being true.

The one surprising exception to this rule was Pachter. Pachter's predictions were very specific, such as pushing GTA IV's release back by a year, and John Woo wanting to make more video games. But being right most isn't what Pachter says matters most to him.

"None of my predictions are correct, but mos