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If you enjoy reading this site, you might also want to check out these Think Services sites:
 Game Career Guide (for student game developers.)
 Indie Games (for independent game players/developers.)
 Finger Gaming (news, reviews, and analysis on iPhone and iPod Touch games.)
 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
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Pachter: May NPD To See Wii Triumphant
by Staff
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June 11, 2007
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Wedbush Morgan analyst Michael Pachter has released his preview of the May 2007 U.S. hardware/game sales charts, to be released by NPD late on Thursday, June 14, forecasting overall game sales of $333 million, up 16% compared to last year’s $286 million.
According to Pachter, his estimate "...reflects $228 million in sales contribution from new platforms (PS3, Wii, 360, PSP and DS) and current generation software sales of $105 million".
In addition, the analyst assumes May U.S. sales to be driven by recent releases including Nintendo’s Pokemon Diamond/Pearl and Activision’s Guitar Hero II and Spider-Man 3, along with new release Activision’s Shrek the Third (PS2, 360, Wii, DS, GBA, PC), Microsoft’s Forza Motorsport 2 (360), and Nintendo’s Mario Party 8 (Wii).
In the particularly keenly-fought area of next-gen game hardware sales, Pachter is estimating sell-through of 400,000 Wii, 225,000 Xbox 360, and 100,000 PS3 hardware systems, predicting that Nintendo's next-gen console will outsell Sony's by as high as factor as 4:1.
Pachter's overall look at video game software starts with the following: "Most of the major U.S. publishers reported solid March quarter results, with each forecasting at least 10% growth in 2007. We expect sales growth in May after a relatively weak April. Notwithstanding the decline in April, U.S. software sales are up approximately 20% year-to-date, and we expect sales growth of 18% for the full year."
He notes of the stock price effect on the major publishers: "Share prices of the major U.S. publishers may trade in a narrow range for several months, as software sales growth comparisons become more difficult, hardware sales remain flat, and investors attempt to lock-in any gains. Now that supply and demand of the PS3 and Wii are near balance, we think that hardware unit sales will be more modest than they were in the analogous period of 2002, when console prices averaged under $200."
Pachter continues, focusing on possible hardware price cuts: "We continue to expect higher average console prices to be an impediment to rapid sell-through of hardware, and we expect cycle-to-cycle declines of 10% or more for hardware sales to persist through the end of summer 2007. It is possible that Sony’s cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 and Xbox 360 before the holidays."
The Wedbush Morgan analyst also commented of current-gen game sales: "We expect PS2 software sales strength to persist throughout 2007, with a blockbuster lineup of licensed movie-themed games released between May and July (and corresponding sales strength during the holidays with the release of the movie DVDs)."
Overall, Pachter concludes: "We expect software sales growth to continue at low-to-mid-teen rates through summer 2007 (in spite of year-over-year comparisons that average +20%). We expect major share price appreciation for the major video game publishers by the end of the year as the next generation console cycle is in full swing, and recommend that investors accumulate Activision, Electronic Arts, GameStop, THQ, and Ubisoft shares at current levels."
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