Analyst predicts 7 percent December dip

After NPD reported a whopping 18 percent year-on-year decline in game sales for November, the industry braced for a cold December. But while the industry-research group won't release its official monthly report until later this week, analysts are already prognosticating about how gaming rang out 2005.

First out of the gate is Wedbush Morgan Securities' Michael Pachter, who believes the game industry suffered a substantial--but not catastrophic--dip last month. According to Wedbush Morgan channel checks, December 2005 saw $1.580 billion in game sales--off 7 percent compared to December 2004.

What was to blame? "In our view, the weak holiday results are in part attributable to a sequel-laden lineup of subpar games, and in part due to a supply/demand imbalance for the Xbox 360," said Pachter. "We had hoped that the imbalance would partially correct in December, but it appears that supply fell far short of demand."

By publisher, Pachter saw only two winners for the month: Activision, whose predicted 200 million monthly year-on-year earnings is a 6 percent spike, and Midway, whose $24 million December haul was 21 percent greater than in December 2004.

However, for the rest of the major publishers, Pachter believes it wasn't a question of if their year-on-year sales fell, but by how much. By percentage, Atari is said to have took the smallest hit ($50 million in earnings, down 10 percent), followed by Electronic Arts ($300 million, down 12 percent) and THQ ($110 million, down 27 percent). The two publishers with the biggest predicted decrease in sales are: Majesco, whose projected $9 million take is 56 percent less than a year ago, and the Grand Theft Auto: San Andreas-less Take-Two Interactive, who Pachter pegs to have suffered a 65 percent decrease over a year ago, raking in $45 million.

While typically accurate, Pachter's numbers are not official. NPD's monthly numbers won't be released until the afternoon of Friday, January 13--not exactly a good omen.