SUCCESS OF 'RED DEAD 2': In an exclusive interview with The Fly, Wedbush Securities analyst Michael Pachter said that his initial total sales model for Take-Two's (TTWO) "Red Dead Redemption 2" was "clearly too low." "I think I had 12M-13M [units] in my model before Take-Two put out their press release that it did $725M in the first three days," Pachter said. "Clearly, it hit my number in the first three days." The analyst noted that "Red Dead 2" is selling "very slightly better," as in 2%-3%, than Activision's (ATVI) "Call of Duty: Black Ops 4," adding that it's fair to assume that both games have a similar mix of digital to physical sales. "It's likely "Call of Duty" has a little bit more international appeal than "Red Dead,"" Pachter said. "But not 25 points bigger or anything." The analyst also noted that the difference between the two games is that "Call of Duty" is on PC and consoles, and "Red Dead" is not "yet" on PC. Still, Pachter said that "Red Dead Redemption 2" is performing better than he initially thought.

'RED DEAD ONLINE': When asked about the slow start and user backlash associated with the economy of "Red Dead Online," the online multiplayer component of "Red Dead Redemption 2," Michael Pachter said that random online users on platforms such as Reddit "should just be ignored." "It pisses me off that we give those guys a platform," he said. "My guess is that 2%-3% of people in the beta were actually complaining about it." The analyst noted that the people who are responsible for "Red Dead Online" are the same who made "Grand Theft Auto Online," which has been "going strong" for five years with "no complaints" at all. Pachter said "Red Dead" developer Rockstar has a "good track record," and that it's a "stupid conclusion" to write off "Red Dead Online" so early on. "Could we give them at least a week before we start beating the crap out of them?” the analyst said, noting that people shouldn't be too concerned about a "vocal minority of whiny little babies."

'GTA ONLINE' CANNIBALIZATION: On the topic of whether "Red Dead Online" could potentially cannibalize the user base for "Grand Theft Auto Online," which continues to receive content updates, the Wedbush analyst said that it is "way beyond possible" and "extremely likely, if not an absolute certainty" that some cannibalization will happen. ”This is like saying if ‘McDonald’s adds a healthy option, is it likely that their burger sales will go down?’ Yes!," he said. Pachter added that "for sure" many people who play "GTA Online" have probably also purchased "Red Dead Redemption 2."

OPPY NOTE ON GAME INNOVATION: In response to a question about a recent Oppenheimer note saying that big game publishers are struggling to keep up with innovation, Pachter said that he couldn't even "dignify" the opinion with an "appropriate response." "No, I don't agree," the analyst said, adding that saying the game industry is losing innovation is like saying Hollywood has lost innovation. "I don't know what this clown thinks is innovative," Pachter added, noting that entertainment is a "constantly evolving genre." "So, sure, the publishers didn't come up with Battle Royale, and now they're responding," he said. "Do you really care if you go out for a burger, if you eat at a place that invented the hamburger? I'm sure you don't."

'ANTHEM': When asked about how important upcoming multiplayer action game "Anthem" is for the future success of Electronic Arts (EA), Michael Pachter said that it is important for the near-term, but not necessarily for the very long term. The analyst noted that a successful launch for "Anthem" could help restore credibility for management in the wake of the publisher's loot box controversy surrounding "Star Wars Battlefront 2" and "demonstrate that EA isn't messing up every game possible." "It's got to be good," Pachter said. "It's an opportunity for EA to repair the bad will they created from the "Star Wars" loot boxes." The analyst noted that the audience for "Destiny" is ready for something new, and that "Anthem" looks like "Destiny on steroids." He noted, however, that if "Anthem" flops, it further harms EA's credibility, but if it's great, it helps to repair the company's credibility.

BIGGER PUBLISHERS ON SWITCH: On the topic of why bigger game publishers don't release more games on the Nintendo Switch (NTDOY), Pachter said that the system's underpower makes it more difficult to port more modern games that release on the Xbox One (MSFT) and PlayStation 4 (SNE). He noted that ports of previous generation games to the Switch are relatively cheap because you don't have to redesign much of the game, but "you can't dumb down a game enough, so you have to redesign it" when it comes to current generation titles, which is much more expensive. The analyst added that publishers would need to sell several million copies to cover the cost of redesigning the game for Switch, and "nothing" sells several million copies on Switch that isn't made by Nintendo. "It's just not worth the effort for EA and Activision," Pachter said. "Plus, historically, Nintendo has not really done much to help third parties succeed." Nintendo, according to Pachter, is primarily a software developer who makes hardware to showcase its own software, and the other companies are software publishers "who want to be platform agnostic."

"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.