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Ahead of NPDs, Analysts Expect Worst Month In Recent History

Ahead of NPDs, Analysts Expect Worst Month In Recent History

August 10, 2011 | By Frank Cifaldi

There's "not much to cheer about" in the United States video game retail industry for July, say analysts at Cowen & Company, who expect the worst sales decline in nearly six years.

According to the analysts, the monthly retail video game report from the NPD Group (due tomorrow) should show a total packaged software decline of around 27 percent year on year, putting sales somewhere in the neighborhood of $317.5 million.

By comparison, the lowest sales the NPD reported in the last three years was $400.1 million, back in May of this year, which was at the time the worst month since October of 2006.

The 27 percent decline would also be the highest on record since September of 2005, which saw a 29 percent decline.

The only notable release for the month was EA's NCAA Football 12, according to the report, which they estimate will sell 770K units (up 11 percent from last year's title).

"Otherwise, we believe there were no new releases in July that exceeded 200K units; combined with what is likely to be a poor follow-through from the disappointing June release slate, we expect July sales to decline significantly" compared to last year, wrote analysts Doug Creutz and Jason Mueller.

Among the notable releases for the month are movie tie-ins Captain America: Super Soldier and Harry Potter and the Deathly Hallows, Part 2, Ubisoft's Just Dance: Summer Party, and Atlus' Catherine, which was Atlus USA's biggest launch ever at 200K units shipped.

It is worth noting that a major contributing factor to the decline, should it occur, would be unfavorable comparisons on the PC side of packaged software, as July of 2010 saw the release of Blizzard's StarCraft II. According to Cowen's analysts, the comps could see a boxed PC game sales decline of 71 percent.

According to Creutz, August's decline will be even worse than July's: EA's delay of Madden NFL 12 to an August 30 release will move it to the NPD's September tracking period, leaving August without its highest profile release. Cowen anticipates sales down "in excess of 30 percent" for the month as a result.

On the bright side, Madden is expected to contribute to a slight increase in September, leading into a fourth quarter that Cowen expects will show a high single to low double digit growth.

The NPD Group will release its retail sales report for July on Thursday afternoon.

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