Kaufman Bros. analyst Todd Mitchell seems to have his doubts about EA's recently-adopted Wii-chasing strategy, which we previously reported on.
Mitchell says, in a recent report, that he feels there's a lot of "irrational exuberance" for Wii. "As we highlighted in our Video Game Publishers: Valuation and Technical Analysis, published on 4/9/07, we are not sure the publishers will benefit from the Wii. Did the Wii really enlarge the market or did it just further segment it to Nintendo's advantage? Most likely it is a little of both, so we feel the real questions is, did it enlarge the market by more than the amount of share Nintendo was able to take from the other publishers by dominating sales on the popular platform?"
"Yes, the Wii has caused the overall pie to get bigger," Mitchell concludes, "but the independent publishers may be getting a proportionately smaller slice." The full report to Kaufman clients is available for those interested.
Mitchell says, in a recent report, that he feels there's a lot of "irrational exuberance" for Wii. "As we highlighted in our Video Game Publishers: Valuation and Technical Analysis, published on 4/9/07, we are not sure the publishers will benefit from the Wii. Did the Wii really enlarge the market or did it just further segment it to Nintendo's advantage? Most likely it is a little of both, so we feel the real questions is, did it enlarge the market by more than the amount of share Nintendo was able to take from the other publishers by dominating sales on the popular platform?"
"Yes, the Wii has caused the overall pie to get bigger," Mitchell concludes, "but the independent publishers may be getting a proportionately smaller slice." The full report to Kaufman clients is available for those interested.