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Being Michael Pachter

"I use the press. I set out to use the press."

If you read about videogames on the internet then you've probably heard of Michael Pachter.

That's because when something happens in the games industry, people ring him up or send him an email. He's one of our pre-eminent talking heads.

In his role as analyst for investment banking company Wedbush Morgan Securities, he also writes numerous reports on companies like Electronic Arts and Activision Blizzard, advising investors on whether it's worth taking a punt on them.

As part of his research he also gets to sit in meeting rooms (probably not the windowless variety) with executives like John Riccitiello and listen to them outline why their company is worth investing in, which means he gets to find out about what's actually going on way earlier than most of us do, too.

But who is Michael Pachter? What does he do every day? Who cares?

Eurogamer decided to find out.

EurogamerWhat is it you actually do?
Michael Pachter

My job is primarily to advise investors, and by investors I mean big mutual funds and hedge funds. Our smaller accounts maybe have $100m under management and then all the way up obviously to several hundred billion. The average average is easily $1bn. I talk to guys who manage billions of dollars, and my job is to help them make better investment decisions.

EurogamerI have a group called Entertainment and Retail. I cover Netflix, Blockbuster, Coinstar, GameStop, Best Buy, RadioShack and I cover all the videogame guys. I'll probably end up covering Facebook and Zynga and those types of companies. Facebook isn't actually built on games, but that seems to me to be some of the glue that's keeping people coming back.
EurogamerWhat I do from early morning until late night every day is remain current on everything that is happening with any of the companies I cover. I can define that as broadly or narrowly as I choose.
EurogamerFor example, I'll give you one that seems topical today. For some reason the punk-ass PC gaming community decided that they hate Ubisoft because Ubisoft has this Uplay online DRM that sends a trickle of information online to validate that it's really you playing the game or something. They really hate Ubisoft.
"I'm everybody's first call."
EurogamerLet's be real, Ubisoft probably makes €1bn in revenue from around 30 million units of games a year. How many units on PC do they sell? 500,000? If that. Probably 200,000. So if you tell me that, "Oh my god, 25 per cent of the PC game sales are going to go away because people are up in arms!" It's like a pimple on the butt of a gnat. Who cares? It doesn't make any difference at all.
EurogamerBut I'm still kind of aware of it, and it doesn't matter; it's not going to change whether Ubisoft stays in business or not, or earns a lot of money or earns a little bit. It's just something I'm tangentially aware of. And then guys like you call me and ask for my opinion and I have one and the flame wars begin, because we get all the trolls out there saying I obviously don't understand PC gaming because I didn't realise you have to reformat your hard-drive every 30 seconds.
EurogamerWhat I do is I spend an inordinate amount of time just reading. Wading through the several thousand pieces of information I'm presented with each week and figuring out the one or two nuggets that matter in my job. And what I've found that has been a big benefit to me getting my job done is I make myself accessible to the press, and I'm responsive and I'm accessible. And I hope that I'm correct often enough, and thoughtful when I'm not, that I remain credible.
EurogamerI use the press. I set out to use the press. There are 35 analysts covering videogames, and the investors who have big pots of cash to compensate us for our knowledge, how do they differentiate between me and the other 34 videogame analysts? If I get my name in the New York Times then they'll probably think I must know what I'm talking about. And then it occurred to me that any of them who actually do their work are probably reading Eurogamer, so if they see me quoted there they'll probably think I know what I'm talking about. I endeavour to be accessible.
EurogamerThat's had the unintended consequence that I'm everybody's first call. I'm inundated. I probably get a minimum of 10 press enquiries a day. I got the, "Did you hear the Infinity Ward guys got escorted out of their office? What do you think of that?" probably 15 seconds after it happened, and that's really valuable in my job.
EurogamerOn a typical day I rise at about 3.20 in the morning. At 4, when I leave, it takes exactly 30 minutes door-to-door to the office. Trust me, there is no traffic at 4am. From 4.30 I check all of the news and prepare for the morning meeting at 5am.
EurogamerIf I have something to say then I talk to our sales force to let them know. For example, I hear that 39 Activision employees file a lawsuit against the company to sue for their bonuses for Call of Duty: Modern Warfare 2. Those are fun things; is Activision stock going to be impaired by that? No, but it's bad PR. I do our 5am meeting and then at 5.30 I tend to return calls and emails from clients and the press.
EurogamerThroughout the course of the day my phone rings. I had 12 clients call me yesterday so that filled up probably three or four hours of the day. I probably had a dozen or more of my sales people call me, adding maybe an hour. And I probably sent between 100 and 150 emails out. It's earnings season now and during it - I cover 15 stocks right now - I have to sit through 15 earnings calls and write 15 notes and revise 15 models. On those days, that's another three or four hours each day.
EurogamerWhen do you go home?
Michael Pachter

I left at 4pm yesterday, maybe slightly after. I got home at around 5, and after dinner and helping my kids with homework I went upstairs from 6.30 and finished my Dreamworks note and hit the send button to my boss to approve. And then I watched American Idol and went to bed.

I typically work two out of three weekends. And I probably work about three hours on a weekend. All my NPD previews are done on the weekend. I write an industry report every year a couple of hundred pages long and takes me the equivalent of about 200 hours to write.

So I stay busy.

And I travel. Probably 60 nights a year I'm gone from home. I probably see an average of about seven clients a day on the 60 days I'm gone. I probably have 400 client visits a year. And out of that, 100 I'll see more than once. So I see 300 different people a year and I have about 500 people who call me. I talk to a lot of people and we have a lot of people pay us.

And obviously I've got to go to conferences and things, but fortunately in the videogame world there really aren't that many meaningful ones. I have to go to E3, but I live in LA. Really I don't have to go to gamescom in Germany. I went to the Tokyo Games Show once and realised it was a complete waste of my time.

I've never been to a PAX. I'm sure it's fun, but it's a fan thing. I do go to GDC and San Francisco is an hour flight and very easy for me to do. And I do like that show, but I don't go to GDC Austin or GDC Europe because you go once and how many geeks can you deal with? I go to the Consumer Electronics Show. Five or six of my 60 nights are going to games shows and the rest are seeing clients.

And then I write a lot; I write a lot of notes and I'm certain that my notes have more content than anybody else that covers this space, which is again how I stay visible to the press.

It's crazy to me; there's an old saying, and I'm not sure who said this, that "emulation is the sincerest form of flattery". And it shocks me that nobody emulates me. It blows me away that there are no analysts that say, "Oh that guy's in the press all the time, oh he writes a whole lot." The last industry report I've seen from my competitors was 2004.

"And I said, 'Yeah, yeah, they're ripping off the consumer.'"
EurogamerMaybe nobody can keep up.
Michael Pachter

I don't know why! I mean it's not that hard. But they're just too lazy. They don't try hard enough. That's when I get particularly perturbed when people say I'm talking out of my ass.

I don't mind if someone says I disagree with you, that's totally fair, but to say, "Oh, he doesn't know anything about this." Yeah, like you're a f***ing expert on DRM. First of all I don't care about DRM, but it cracks me up that these guys think I'm paid handsomely because I'm such a pretty face. Work-wise it's a great job other than the fact there's a lot of hours.

EurogamerDo you personally tip off investors?
Michael Pachter

Well I do, but it's a better distribution to have sales people; 30 sales people can each call 30 clients faster than I can call 900 people. But I do talk to the clients that want follow-up.

This Infinity Ward thing has been such a crack-up. People are so needy; there are so many guys who are like, "Oh what does it mean? What is the next Call of Duty going to do?" I've been pretty clear that I think the brand has a lot of equity and there are a lot of consumers who have no fricking clue who Infinity Ward is.

Yes there are also a sizeable minority of gamers who do know who they are. But even then, are they all going to stop buying Modern Warfare forever just because Jason and Vince aren't there any more? I doubt it. And I don't think it makes much difference if the whole team turns over, because look what happened to World at War made by Treyarch - people bought that game. So if Activision puts Treyarch in charge of Infinity Ward's studio and makes sure they're supervised correctly, are they really going to screw it up that badly?

In my obviously-knowing-nothing-about-games opinion: the plot of Modern Warfare 2 was the dumbest thing I've ever seen; my jaw was dropping while I was playing. I felt worse shooting American troops than I did Russian civilians. What cracks me up is that I read all the "No Russian" criticism about being put in the role of a terrorist, but being in the role of a guy gunning down American troops is worse. Not to say killing civilians is a good thing.

I didn't get [the ending] at all. I actually talked to Jason and Vince about it and said, "I have to say guys, that was the dumbest plot ever!" They said, "We had it all planned out but now we don't know what's going to happen because it ain't going to be us!" I don't get why that game was so popular. So to say that you lost these two guys who made the dumbest story of all time - maybe that's a good thing! It's pretty funny.

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About the Author

Robert Purchese avatar

Robert Purchese

Senior Staff Writer

Bertie is senior staff writer and Eurogamer's Poland-and-dragons correspondent. He's part of the furniture here, a friendly chair, and reports on all kinds of things, the stranger the better.

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