Amit Chokshi

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  • Electronic Arts Takeover Is Almost Inevitable... But by Whom?
    Nintendo is a great company and has done some innovative things like the DS but my comment was mainly towards those who say the Xbox 360 and PS3 are "failures" vis a vis the Wii. I have a pretty good grasp of console history, the PS2 was heavily outsold by the Gamecube and Xbox during the last console cycle and we know where it ended up.

    Gamecube and Xboxwere cranking out over 600k units per month in the beg of the last game cycle, and PS2 was around 400k and even dropped to just 200k but eventually was firing off close to 3MM units per month by xmas time in 2002, basically the middle of a recession.

    Right now, every analyst loves the Wii and is taking the first year of sales and expecting these monthly sales to go on forever. There are not that many skeptics of the Wii and I think it's a "real system" but also that the inital results overstate its long-term run rate while conversely the slow sales rate of the PS3 are not reflective of where it will be as the cycle matures.

    The more advanced consoles require more time to adopt because the first cut on games usually doesn't showcase the power of those consoles. Now with Halo out and with GTA on the horizon in spring, I think the new games are really going to showcase what those platforms can do which will drive a lot more buyers towards those consoles.
    Dec 10 11:19 am |Rating: 0 0 |Link to Comment |View article
  • Electronic Arts Takeover Is Almost Inevitable... But by Whom?
    Why do you think ERTS would be willing to sell to a console maker or why would a console maker be willing to buy it? Why not just co-create certain franchises? THe reason I am skeptical is because historically the PS2 was the biggest revenue driver for software players and I'm betting the PS3 will be too as the cycle matures. Wii IMO is a novelty, a cheap and fun console that non-gamers will buy and younger kids but will eventually collect dust. Sales are juiced in recent years due to the cost but I think the installed base will outweigh the benefits over time because I really don't think the people that were early adopters are necessarily long-term gamers.

    In contrast I think people are just starting to see the power the Xbox 360 and PS3 will have, the first run of games isn't going to showcase the hardware just yet. But that goes back to why I question whether ERTS would be a buyout target for a console maker.

    If MSFT bought ERTS, wouldn't the value of ERTS be reduced immediately or be a major washout? Big titles by ERTS sell well across the Xbox and 360 and I would expect MSFT to hoard ERTS's titles and not put it out for PS3, conversely the same would probably happen if SNE bought ERTS. MSFT doesn't make Halo available for the PS3 so why would it make Madden available for PS3?

    So that might have some say, that's the key and why a console player would go after ERTS, they can crush the other players because they capture that content. That could be true but current valuation for ERTS is based on streams from all consoles and you'd be paying for that and then having to build out/expect that owning Madden and other franchises drives more than enough people to your console platform. It could work I guess and guys like MSFT have shown a lot of patience and deep pockets in trying to develop their home ent division but it seems like the value of these software players could be a better fit for pure media companies.

    I think THQI and TTWO are prob the better targets, THQI could be perfect for DIS with Buena Vista since they have licenses to Pixar movies and other children's titles.
    Dec 10 09:08 am |Rating: 0 0 |Link to Comment |View article
  • Microsoft's iPod Killer Emerges -- Should Apple be Scared? You Bet! (AAPL, MSFT)
    Lotus and Wordperfect, let's not forget Foxpro either, those could all be destroyed because the parent programmers were migrating from DOS to Windows and MSFT had the "environment"... that everyone was migrating too and between their bargaining power and muscle, they could force out Lotus and other competing products.

    When it comes to the mainstream consumer, however, and the current tech cycle, why hasn't MSFT's crappy money program done anything against Intuit's Quicken? And why wouldn't Adobe sue MSFT for that, in the tech world lawsuits are a dime a dozen, looking at ADBE's 5 or 2 year or 1 year chart doesn't really show any pressure due to their lawsuit with MSFT. If it was as material a concern as you point out, there'd be more focus on it by investors and ADBE management in their calls.

    And then you say "Microsoft will lose money on the hardware in order to ensure the platform supremacy of it’s products. Apple can’t do this because they have no widely accepted platform outside of iTunes. " What do you mean by platform supremacy? Where's the economic gain here, you said they are giving away the content, so that's free, plus they don't own the content anyway so would just skim off the media companies that do own it.

    First of all, MSFT can't force people to take their clumsy late to market PMP that comes out. So to incent people to try them, they'll likely be priced aggressively and lose significant money on that product. Ok fine, as you say they'll lose $ on the hardware to ensure "platform supremacy" which I guess is their iTunes competitor. Ok, so how the hell are they going to attract media companies to give them the rights to sell songs and get a piece of the action? If Warner Music wants consumers to have their songs, they'll go to Apple and deal with the $1/song because at least people buy it and there are enough iPods out there so there's a real market. You think WM is going to be happy that MSFT gives them more of a cut and allows flex pricing per song if only 3 million people own MSFT's device? Not all companies believe in loss leaders.

    Don't underestimate iTunes, if the iPod wasn't such a strong device, the media companies could have easily disintermediated iTunes by offering their songs directly on their websites.
    Jul 10 14:50 pm |Rating: 0 0 |Link to Comment |View article
  • Microsoft's iPod Killer Emerges -- Should Apple be Scared? You Bet! (AAPL, MSFT)
    The negativity is more of a result of the quality of your article. If you're looking for bashing and pumping based on how much people "like" a stock, company, or its products go to Yahoo's boards but there's generally less blind loyalty to companies mentioned in this site.

    MSFT's been in talks to develop an iPod "killers" for years, now they finally got around to where they might release one, big deal. AAPL owns the space as it is, unit sales have generally moderated at this point. MSFT is going to be competing for the same shelf space that Rio and SDSK and CREAF all do.

    And I think many people have all heard about the "threats" the various internet music stores from YHOO, AMZN, and even WMT were going to pose to AAPL. WMT was going to undercut AAPL and it was going to be over for them. MSFT is going to bumble into the MP3 market the same way they've done the console market, spend a lot of shareholder money and become an unprofitable second place market leader. The PS franchise counts for close to what, 40%, of SNE's operating profits, MSFT can't turn a profit on the 360. So some of the statements you make, about MSFT like "Microsoft has a pattern of entering a business and sucking the profit opportunity out of it by incorporating it as part of its platform. Why should entertainment infrastructure be any different?" is based on one example which is Internet Explorer. MSFT hasn't displaced Adobe or Intuit or other software vendors that MSFT would love to get its hands around. And have they done anything with the gaming console area? 17% of the market isn't bad but Nintendo actually makes money off their systems and the Wii reviews suggest the 360 could face competition from Nintendo (which doesn't do so bad at about 14% market share).
    Jul 10 13:14 pm |Rating: 0 0 |Link to Comment |View article

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