Pachter: Microsoft had the most impactful E3 presentation

By Mike, Monday, 8 June 2009 13:32 GMT

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Wedbush Morgan’s Michael Pachter has issued a note hailing Microsoft as the winner of this year’s E3 claiming that Microsoft had the most “impactful presentation of the three console manufacturers.”

“Much of the big news of E3 had been leaked well before the event, with many stories previewing motion technology introduced by Microsoft and rampant leaks in advance of Sony’s new PSP Go,” says the research note. “Nintendo managed to keep most of its big announcements a secret ahead of the show.”

“We thought that Microsoft had the most impactful presentation of the three console manufacturers, with an expanded offering of traditional games (Halo Reach, Final Fantasy XIII, Metal Gear Solid Rising) and the new motion controller Project Natal. The company also showcased the new Rock Band Beatles game, and trotted out several big name celebrities.”

“Sony’s presentation was full of content, although somewhat long, with major announcements of the new PSP Go and a new Final Fantasy XIV game exclusive.

“We were surprised at the $249.99 and €249.99 price points, and think that after a rush of fanboy purchases, sales of the device may stall. Sony did not cut the price for the PS3 or for the existing PSP 3000.”

Full thing after the break.

WEDBUSH MORGAN SECURITIES

Michael Pachter (213) 688-4474

Edward Woo, CFA (213) 688-4382

Entertainment Software: E3 2009 Review: Glitz and Glamour Showcase a Vibrant Industry

o We attended the E3 Expo last week in Los Angeles, CA, and met with over a dozen companies presenting products at the show, including Sony, Nintendo, Microsoft, Activision Blizzard, Electronic Arts, Take-Two Interactive, THQ, and Ubisoft.
o Non-traditional game software and technology was the popular theme of the show, with many companies working on new games for the casual market and new motion technology in order to expand the video game demographic beyond young men.
o Much of the big news of E3 had been leaked well before the event, with many stories previewing motion technology introduced by Microsoft and rampant leaks in advance of Sony’s new PSP Go. Nintendo managed to keep most of its big announcements a secret ahead of the show.
o We thought that Microsoft had the most impactful presentation of the three console manufacturers, with an expanded offering of traditional games (Halo Reach, Final Fantasy XIII, Metal Gear Solid Rising) and the new motion controller Project Natal. The company also showcased the new Rock Band Beatles game, and trotted out several big name celebrities.
o We think that Nintendo had the least impactful presentation, with only one new hard core Wii game this year (a new Mario). Nintendo also previewed another Mario game and a Metroid game for next year, and later announced a new Zelda game. Nintendo’s content offering is quite broad, with a balance of hard core and casual games for both the DS and the Wii.
o Sony’s presentation was full of content, although somewhat long, with major announcements of the new PSP Go and a new Final Fantasy XIV game exclusive. The PSP Go is a download-only device with 16Gb of flash memory and a memory stick slot that allows for unlimited game, movie and music downloads. We were surprised at the $249.99 and €249.99 price points, and think that after a rush of fanboy purchases, sales of the device may stall. Sony did not cut the price for the PS3 or for the existing PSP 3000.
o There were few surprises on the software front, with most of the publishers showcasing games that had previously been announced. Activision had the most impressive presentation (and party) of the publishers, in our view, showing highly polished content. We were impressed by Tony Hawk Ride and Modern Warfare 2. We were similarly impressed with Ubisoft’s showing, focused on a mix of hardcore and casual games. Electronic Arts also impressed with Dragon Age and Dante’s Inferno.
o We viewed demonstrations of several games at the show, and were most impressed with Rock Band Beatles, Tiger Woods Wii, Avatar, Assassin’s Creed 2, Blur, Modern Warfare 2, Super Mario Bros. Wii, and Bioshock 2.
o The show was much larger than the past two years, and we believe that the former spectacle of E3 is back. The Los Angeles Convention Center hosted over 40,000 attendees (as compared with 5,000 the past two years and 80,000 three years ago) and attracted a lot of media attention. E3 2010 is scheduled for June 15 – 17, 2010.
o We expect modest share price appreciation for the major video game publishers to come out of E3, given that most in attendance were favorably impressed with the publishers’ showing. We recommend that investors add to positions of Activision, Electronic Arts, GameStop, Nintendo, Take-Two, THQ, and Ubisoft.

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