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Analysts: Game Industry Weathering Economic Downturn
by Brandon Boyer
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March 14, 2008
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Following the release of February's NPD sales figures, analysts have called out its particularly strong performance in light of macroeconomic downturns, calling the industry near 'recession-proof.'
Said simExchange's Jesse Divnich, "Today, retailers announced that they have posted negative same store sales growth for February and many economists warned that the United States economy is currently in a recession or on the verge of one."
"Irrespective to that," he continued, "the video game industry continues to post record growth and although no leisure/entertainment sector can be considered 'recession proof,' the video game industry continues to prove to be one of the very few industries to have the least elasticity to the current economic environment."
Wedbush Morgan's Michael Pachter said he believes hardware sales will accelerate throughout the year, adding that a strong early-year release schedule should keep double digit sales growth throughout the following several months.
"We currently forecast full year growth of 19%, but think our estimate may be conservative, particularly if software [average sales prices] and PS2 sales remain strong throughout the year. Our estimate presumes that ASPs will increase slightly for the year, but January and February's ASP was up 20%, implying that our estimate may be too low."
Finally, Divnich revealed sales figures for several games not on NPD's top ten list, including Ubisoft/Grasshopper's Wii exclusive cult action title No More Heroes:
Frontlines: Fuel of War (Xbox 360): 99,900 units
Professor Layton and the Mysterious Village (DS): 91,000 units
Advance Wars: Days of Ruin (DS): 50,300 units
No More Heroes (Wii): 37,000 units
Dragon Quest Swords (Wii): 15,000 units
WipEout Pulse (PSP): 10,000 units
Divnich added that Call of Duty 4's chart-topping streak may be at an end, as "the prediction market expects Super Smash Bros Brawl to take the number one spot at over 1.83 million units sold in March."
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