Call it the Pachter effect.

Video game analyst Michael Pachter, who himself has seemed to admit in the past that his monthly U.S. sales estimates for publishers come without much extensive research, has perhaps managed to help move Take Two Interactive’s stock (NASDAQ:TTWO) down about 17% in only three days.  How?  On Monday of this week, he threw a dart and estimated that Take Two’s NPD number would be 40 million in sales for July.  He based that on the idea that since Take Two’s hit title Red Dead Redemption sold so well in the first 6 weeks (approximately 2.5M in the U.S.), sales would therefore continue with that kind of fury and come in at over 500,000 for the third month.

He guessed wrong.  In fact, sales estimate website VGchartz.com, which puts out weekly figures, put out its estimate for game sales at around half that number on Tuesday of this week – which is exactly when Take Two shares began to tumble hard, all the way from $10.25 to $8.50.  The shares had been underperforming the market prior to that as well.

I’ve seen Mr. Pachter’s monthly sales estimate impact on video game stocks several times before and have called it “The Pachter Effect.”  Mr. Pachter puts out a number (which in my opinion is rarely even based on company guidance), then the market and other analysts use his figures as a way of judging the company’s performance for that month.  The only problem is his monthly estimates are often way off, so much so that even he doesn’t seem to take his own estimates seriously enough to change his price targets or opinion…