Analyst expects NPD slump to continue

Wedbush's Michael Pachter expects this week's sales data release to show July software, hardware sales down 7 percent; NCAA expected to lead pack with 800,000 sold.

After a big April in which Mortal Kombat and Portal 2 helped push sales up 20 percent, the US game industry entered its summer doldrums a bit early, posting double-digit declines in May and June. With the industry-tracking NPD Group expected to release its sales figures for July later this week, one analyst is predicting a third straight month of losses, albeit with a smaller overall shortfall.

Pachter thinks NCAA Football will repeat as the July sales champ.

Wedbush analyst Michael Pachter sent out a note to investors this week with his expectations for the NPD's figures, saying he expects software sales to be down 7 percent to $375 million, with EA's NCAA Football 12 leading the pack with 800,000 units sold. Last year's installment of the Electronic Arts pigskin sim also topped the NPD Group's July 2010 software charts.

Beyond NCAA Football, Pachter tapped The Legend of Zelda: Ocarina of Time 3D, Infamous 2, and L.A. Noire as continued strong sellers, with Nintendo's 3DS remake and the Rockstar-published detective thriller each notching another 250,000 copies sold. Pachter did not put a number on his expected sales total for Infamous 2.

As for hardware, Pachter also expects the number of systems sold to be down 7 percent year-over-year, partly because last July saw retailers selling through older versions of the Xbox 360 in the wake of the redesigned console's debut. Sales of the DS, PSP, and Wii are also expected to be weak in light of those systems' successors already being on the market (the 3DS) or on the way (the PlayStation Vita and Wii U).

"We continue to believe that sustained software sales growth will remain elusive until hardware sales rebound for an extended period of time," Pachter told investors. "In our view, given the 3DS's weak debut and the limited impact from May's Wii and June's DS Lite price cuts, a rebound is unlikely to happen until Microsoft and Sony cut the price of their consoles."

Pachter said Microsoft and Sony will likely consider cutting the prices on their consoles for the holidays, but he noted that strong Xbox 360 sales for most of this year might give Microsoft the luxury of pushing any such drop until 2012.

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Discussion

20 comments
dz99ls
dz99ls

please tacman you need to get a clue

KrazzyDJ
KrazzyDJ

Thank God Rockstar / Take-Two has started avoiding the fall season with Grand Theft Auto IV, Red Dead Redemption and L.A. Noire release dates being testimony to that !!!

tmacman
tmacman

@dz99ls A lot of children want the big titles, which M rated games, they need parents to buy it for them, and they'll be more likely to do that during xmas, try and keep in mind as a publisher I want to try and sell my game to as many people as possible for the highest price possible. Adults don't get games for xmas at all.... yeah right. I said sell for full price, around November, an August game has usually dropped in price. So you nullified nothing, and since you obviously don't know a thing about basic business, or maybe no one loves you enough to buy you an xmas gift, I'll leave it at that.

dz99ls
dz99ls

@tmacman Adult gamers dont need their mommies to buy our games for us. Nearly EVERY one of the big releases are "M" rated games so that argument is balls. Also last time i checked if a game is released in august that doesnt mean its not available for sale in november.

AuronAXE
AuronAXE

@MJ12-Conspiracy "I don't think console sales are the answer, I think everyone who's interested in Wii already has one or are in the process of getting one soon, I think the same is true for XBOX 360, It's the PS3 that needs more sales" Couldn't be stated better Majestic-12.

Rottenwood
Rottenwood

Nothing says 'recession' like a duck on a motorcycle.

ogwaffle2
ogwaffle2

I mostly play PC and PS3, and i can't name one decent game that has come out this year. We all know the economy sucks, but to be honest developers and publishers suck too. All game genres are so tired right now.

steelmouth
steelmouth

I blame ms 8months into the year and still no exclusive, this developers/publishers need to spread out their AAA releases throughout the year, am thinking a AAA exclusive every quarter at the least, now all the big games are cramped into the last quarter gamers are will ether not have the money or time to play all of them, hence leading to less sales and developers thinking their games don't sell

Stonecutters908
Stonecutters908

I don't understand why so many game studios just write the summer off. A solid 2-3 months almost barren of new releases with any excitement surrounding them. I think it is a big mistake for some games to wait until the Fall-Winter rush because they get drowned. I can see why the established AAA franchises do it, but I think some stuios are not taking advantage of time when their games could get really noticed.

MJ12-Conspiracy
MJ12-Conspiracy

If game makers want to see sales rise they are really going to have to swallow their pride and lower the price of games, even if the price was lowered to $50 instead of $60 I think many gamers would appreciate the gesture. Day one DLC doesn't cut it, nobody wants to pay $60 and turn around and spend another $25+ on DLC because the dev was too lazy to put it all on disc or that the publisher was greedy and forced them to break apart their game and sell the parts off as extras. I don't think console sales are the answer, I think everyone who's interested in Wii already has one or are in the process of getting one soon, I think the same is true for XBOX 360, It's the PS3 that needs more sales.

tmacman
tmacman

@dz99ls What holiday happens in Q4? Christmas. What do a lot of people love to get at Chritmas? Video games. When are you probably going to sell the most copies of your games at full price? Around Christmas. Until someone creates another super holiday, we're stuck with it.

bizuit
bizuit

Ncaa sells almost a million and there is still hardly no one online playing it.

dz99ls
dz99ls

if developers and publishers would get a clue and not pack Q4 with all the major releases this wouldnt happen

monson21502
monson21502

its all those suicide dudes on walstreets fault... plus the fact that ea hasnt made a really good sports game this gen and its year 6? why in the would would they keep buying the same thing over and over?

tachsniper
tachsniper

The economy still sucks hard and sales are expected to slump? what a frakkin surprise.

endorbr
endorbr

@vadicta - So true. NPD needs to get with the program or go away. I hope no one is actually relying on their numbers for anything important.

pokecharm
pokecharm

@endorbr - I was thinking the same thing, I know a ton of games coming out late this month and through the fall that should change this trend.

vadicta
vadicta

Well, of course it will. How can the numbers the NPD give us get higher when they're continuously getting less information from less venues. They don't count Wal-Mart, online retailers or digital distribution. The NPD is no measuring stick for the game industry.

DiscGuru101
DiscGuru101

[This message was deleted at the request of the original poster]

endorbr
endorbr

A lot of the years big titles are coming out in the next three months so Q3 and Q4 sales numbers should be a lot better.