Analyst: "Next year is big, no matter what"

Transition years are supposed to be rough, but few publishers, or investors, expected the revenue slumps of the past six months.

A couple of uncomfortable benchmarks from late 2005 include these two factoids: November 2005 console-software sales of $696 million, down from $849 million during the same period the previous year and December sales that were 4 percent below figures reported the previous December.

This year, the data is showing the same negative numbers. As reported previously by GameSpot, NPD's January sales stats saw US console-software sales of $357 million, down more than 5 percent from the prior January haul of $377 million.

To find the most recent month that saw a year-on-year revenue increase, you'd need to go back in time to August, 2005, when Madden sold record numbers.

But what lies ahead? "I think 2006 is going to be a mess," Wedbush Morgan senior analyst Michael Pachter told a game conference audience this week in San Francisco.

That comment was followed by a ripple of laughter. But the crowd of about 175 quieted down considerably when he continued, saying, "a lot of people in this room are going to lose their job," based on the losses that are bound to be posted, according to Pachter.

But even Pachter sees a break in the weather. Looking ahead, past the release dates of both the Revolution and the PlayStation 3, he sees an industry that is bound for growth. "Next year is big, no matter what," he said.

GameSpot News invited Pachter to join us in the studio where we asked him to further explain his thinking--and how he sees the future panning out. Watch the interview above to see what he thinks.