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AG Edwards: Wii To Top 2007 Sales, X360 To Win Cycle

AG Edwards: Wii To Top 2007 Sales, X360 To Win Cycle

March 27, 2007 | By Brandon Boyer

March 27, 2007 | By Brandon Boyer
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In initiating its coverage of the games industry, investment and analysis group AG Edwards has said it sees aging markets, female gamer growth and youth population growth to add as much as $5 bil annually by 2009, and predicts the Wii will win the 2007 next-gen battle.

Its first report released to investors, "Itís Time to Get in the Game... Initiating Interactive Entertainment at Over-Weight," claims that the games industry is "well positioned for above average long term growth."

Apart from an expected 39 percent retail sales growth in 2007, consisting of 73 percent growth in hardware and 18 in software, Edwards also expects that the changing demographics of gaming will bring in as much as $5 billion annually by 2009.

Those shifting trends include the expanding age of the target market, with a 25 percent increase in the number of gamers over 25 since 2005, female gamers steadily increasing in numbers and finding near parity with males in the casual game space, and growth in the youth population itself through 2020.

In addition, Edwards sees the 'somewhat untapped' opportunities of mobile gaming, on-line transactions like episodic content and expansion packs, and dynamic in-game advertising as leading industry growth in the coming years.

Edwards also expects the install base of next-gen consoles to reach 57 million by the end of 2009, eclipsing current install bases by 2012. The Xbox 360, Edwards says "appears poised to win the console battle this cycle due to its early head start, wide selection of titles, and Xbox Live features," though it believes the Nintendo Wii will "win the battle in 2007," and that the PS3 will gain share as "Blu-ray technology becomes more of a draw to consumers."

Edwards sees the Xbox 360 taking 38 percent market share by 2009, with the Wii standing at 34 percent, and the PS3 at 28 percent, and, on the handheld front, sees the DS 'easily' taking the largest install base with 69 percent market share to the PSP's 31 percent.

Other future sales trends include Edwards' prediction that home console sales will increase 115 percent as the PS3 and Wii become increasingly available. Software sales are also expected to grow 21 percent on this year's holiday hits including Halo 3 and Grand Theft Auto IV, with an 18 percent rise on portable software as the install base expands, and stable one-percent growth in PC software sales.

Finally, Edwards has singled out three publishers as prospective "buys," including Electronic Arts, Activision, and THQ, with "holds" on retailer GameStop, and publishers Midway and Take Two.


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