Analysts expect March sales rebound, Sept. 360 upgrades

The last year has been a difficult one for the game industry. In the past 12 months, the industry tracking NPD Group has reported year-over-year software sales gains just once, with Halo: ODST pushing September 2009's game sales haul up 5 percent over the previous year. Coming off a March that saw the blockbuster launches of Battlefield: Bad Company 2, God of War III, Final Fantasy XIII, and Pokemon HeartGold and SoulSilver, analysts think that trend is finally ready to be reversed.

Pacific Crest Securities' Evan Wilson and Wedbush's Michael Pachter have released their NPD predictions in advance of the tracking firm's official March 2010 numbers, expected Thursday. Wilson projects software sales for the month to be up 5 percent to $835 million, while a slightly more optimistic Pachter expects game revenues to hit 6 percent growth and $840 million.

The pair's near-term expectations line up, but their longer-term expectations are a bit more divergent. Pachter expects April sales to be roughly flat on a weak lineup of new releases (Splinter Cell: Conviction aside) but added that "sales growth is likely to rebound to double digits in May and that double-digit growth is likely to persist at least through September, if not for the balance of the year." Wilson was more conservative, saying, "The data do not signal a return to strength for the industry since we do not believe growth is a foregone conclusion in upcoming months."

As for individual games, both analysts put Bad Company 2 atop their own March charts, with Wilson expecting the Xbox 360 and PlayStation 3 versions of the game to combine to sell 1.25 million copies and Pachter projecting 1.3 million. Electronic Arts has already said the game sold through 2.3 million units in two weeks on sale throughout the US and Europe.

The pair also gave predictions for a number of other notable titles. Ubisoft's Red Steel 2 may have had a difficult launch, with Wilson projecting it sold 50,000 for the month and Pachter putting the game's sales at 100,000 copies. Both analysts expect that the Wii-exclusive first-person shooter was handily outsold by THQ's own new shooter, Metro 2033, with Wilson putting the postapocalyptic title down for 175,000 sales for the month and Pachter expecting it to have sold 250,000 units.

Pachter also weighed in on hardware sales for March, particularly the DSi XL, which debuted late in the month. The analyst said the system's momentum could have been undercut by the announcement of the 3DS just days before the XL's US launch. Pachter suggested that the XL was outsold in its debut by both the DSi and the DS Lite, with the two older systems each posting sales of roughly 237,000.

Sales figures weren't the only predictions the pair offered. In a timeline of the remaining year, Wilson had penciled in Starcraft II for an early July launch (the game's last announced release window was the first half of the year), with Halo: Reach taking a cue from its immediate predecessors and arriving in late September.

September is also around the time Pachter expects another wave of hardware price cuts, or at least value-added hardware bundles.

"At a minimum, we anticipate the introduction of a more feature-packed Xbox 360 as the standard SKU in late 2010 (likely with a 250GB hard drive) at the same $299 price point," Pachter said, "and think that Microsoft will cut price before the fall only if it begins to lose significant market share to Sony. It is far more likely that we will see a slim version of the Xbox 360 with a 250GB hard drive and with Project Natal bundled into the box while maintaining the $299 price point, especially if Sony does not lower the price of the PS3 by the time Natal and Sony’s Move controllers launch in the fall."