To borrow from Mae West: "Is that a line you're standing on, or are you just happy to see The Business Press Maven?"
We've had a full day now to digest the midnight-madness coverage of
, which is central to the company's strategy of selling more Xbox360 game consoles. And the verdict is?
Well, though sketchy early indications on sales of the shoot-'em-up game are good, who knows how lasting sales will be? Moreover, who knows if
sales can be leveraged into what Microsoft ultimately wants and needs?
Which brings us back to those shopping lines. Even those investors who are not interested in Microsoft need to use this as a case study for what we'll see in the upcoming shopping season, when excited lines will stand as a false testament to long-term demand. So think of this as a preview of coming distractions.
But first: background.
XBox machines have struggled, and it is Microsoft's ultimate aim to use the Xbox360, which also plays downloaded movies and DVDs, as a beachhead to conquer pretty much the only corner of the world that it hasn't yet: your living room, the portion that might be most essential going forward.
Unfortunately for those who are partial to reason over hype, most of the reporting we've seen, read and heard about
Monday night release use pushing, shouting game fanatics as backdrops and interview sources for stories about the fate of the game and, by extension, Microsoft's long-term future.
What investors have been (mis)treated to, of course, is something I
pointed out during the last holiday season. Media outlets send cub reporters to malls to file reports portraying lined-up shoppers as obvious, automatic or, at the very least, subliminal evidence of high demand. If, God willing, there is a fight on line, it means a great Christmas season is upon us.
Nowhere are allowances made for the fact that one line does not make a good larger season. Or that if discounting is attracting the line (
does anybody remember those flat screens?), then the lines are not worth much to the retailer.
The New York Times
line-drunk. Its headline said: "Halo 3 Arrives, Rewarding Gamers, and Microsoft." The dedicated
players, having waited for this third installment like others do the Messiah, have certainly been rewarded. But Microsoft?
Well, the article opens with an anecdote from a
in Bellevue, Wash., where a
nerd has confessed to Bill Gates, who was there working the line, that he has pledged all but 73 cents of his net worth to buy the game. Gates, by the way, does not offer to spot him a few. Lower down, a fanatic is allowed to call the game both the "Mecca" of video games and the "
" of his generation.
But let's curb our opening-night excitement for a moment.
players are excited is no surprise, but investors have to step back from the excitement that the business media use, as if covering a sporting event, to color and define their coverage.
The job of a journalist can be very easy. At its hardest, it's not digging ditches. The hardest part is always rounding up lively subjects. On a shopping line, all your lively subjects are right there; the problem is, they offer skewed rather than shrewd views.
If investors are going to gain anything meaningful from
, sales must be lasting and -- this is essential -- transfer to wide sales of Xbox360, instead of cheaper game consoles such as Wii, which have opened up a science fiction
can of whup-ass on them.
Television is always worse when it comes to the stated or subliminal message of these lines, just the sort of visual cue that stands in place of reasonable discussion. Jim Goldman reported for
"Power Lunch" from a Best Buy in Manhattan as the
eagles were gathering. "Once you are in, you are really sucked in," he said of the game itself, though he could have been speaking about what it is like to report from a carnival.
You might ask me how I came to be so attuned to the lure and lousiness of this sort of reporting. It came about from a mistake I made, one of several that ultimately got me fascinated with the crummy interplay between the business media and Wall Street.
Sometime in the early 1990s, while working on Wall Street, I invested in Supercuts, the chain of low-priced hair cutting salons and one of my dumber moves. Its move into New York City was a big moment, and coverage of its first store opening was hugely positive. There was a line, as I remember it, around the block -- or, at least, close to it. What a backdrop! They love it, they really love it! Forget a well-rounded story. You can grab all the interviews you need right there, from those lively souls on line!
Now The Business Press Maven might, with the distance of age and wisdom, have asked what Supercuts was offering as a franchise that all the mom-and-pop haircutting salons weren't. Economies of scale? When you are still cutting individual heads (you can't cut in bulk)? A better haircut? Eh, I got one. Trust me, it wasn't any better.
But there wasn't much time for that sort of thought and those lines! I bought more stock, both for myself and clients. Well, it turned out that Supercuts was running a promotion. It was giving out free haircuts to commemorate the opening, something not all reports mentioned. I never forgot this, if for no other reason, mind you, than that while investing in Supercuts (a big mistake), I decided against investing in
(a bigger mistake). Then Supercuts and Starbucks opened up across the street from my apartment at the time, on the corner of Waverly and Sixth Avenue in New York City's Greenwich Village. What torture.
But you learn from torture. Not from shopping lines.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.