Analyst: '08 to see $10 billion in game sales

As the first full year on the market with all three major consoles and a slew of huge releases like Halo 3, Guitar Hero III: Legends of Rock, and Super Mario Galaxy, 2007 was a record one for the US gaming industry. The industry as a whole raked in $17.94 billion, with $8.64 billion coming from console and handheld software sales alone. NPD does not include PC games, which it considers PC software, in its video game figures.

While the US stock market has been suffering recently due to fears of an impending recession, Lazard Capital Markets analyst Colin Sebastian told investors today that he expects Americans will still manage to spend even more on games this year. Noting that game sales seem to ebb and flow in a predictable cycle with each new generation of hardware, Sebastian said even when money is tight, games can provide more hours of entertainment per dollar spent than movies or vacations.

"We note that over the 1990-91 and 2001-02 recessionary periods, new consoles launched successfully and became significant drivers of growth for several years," Sebastian said. "As such, we believe it is unlikely that decreasing consumer confidence and economic growth would meaningfully impact video game sales in 2008."

Overall, Sebastian expects US software sales--including PC titles--to increase 10 to 15 percent to over $10 billion. Part of that prediction comes from Sebastian's belief that the 2008 software lineup looks even better than that of 2007, with games like Grand Theft Auto IV, Metal Gear Solid 4, and Gran Turismo 5 set to arrive this year. As one could infer from that list of games, Sebastian also believes that the PlayStation 3 will pick up steam thanks to its lowered price point and improving slate of software.