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PS4 announce has brought investors back to games, says Pachter

Publisher share prices are on the rise at last, and it's all thanks to upcoming new hardware, according to industry analyst Michael Pachter.

"There appears to be some light at the end of the long tunnel, with share prices for the game publishers beginning to rally after underperforming the market for most of the last three years," the Wedbush Morgan analyst wrote in a note to investors reported by GamesIndustry.

"Once Sony announced the PS4 in February, investor confidence returned somewhat, and share prices for Activision, EA and Take-Two have all risen for most of the year."

Pachter said he expects Microsoft to announce its new console before E3 2013 in June, perhaps as early as this month, and said he expects industry stock to go up then, as well.

Although he has no details on the new Xbox, the analyst acknowledged doubts that the PlayStation 4's power increase is enough to reignite flagging spend in the traditional triple-A space.

"While we think this is more of a function of the current state of display technology, we tend to agree that next-generation games will not be significantly more visually stunning than current-generation games," he said.

"However, we think that improvements in facial and voice recognition technology, and dramatic increases in memory may allow for 'smarter' game characters, who may react to and adapt to the style of game play. We expect consumers to be dazzled by the next-generation consoles, and think that rich multimedia functionality may be sufficient to induce most to consider upgrading."

In the end, software will be what consumers make their decisions based on, Pachter added, and said Wedbush expects "a significant number of high-quality and high-profile games to launch for next-generation consoles in 2014".

"We expect the most interesting E3 in the past seven years, and encourage investors to make plans to visit LA June 11-12 to see the new hardware first hand," he added.

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Brenna Hillier avatar

Brenna Hillier

Contributor

Based in Australia and having come from a lengthy career in the Aussie games media, Brenna worked as VG247's remote Deputy Editor for several years, covering news and events from the other side of the planet to the rest of the team. After leaving VG247, Brenna retired from games media and crossed over to development, working as a writer on several video games.

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