Shrinking January game sales predicted

Analysts point to shortened reporting period, weaker release schedule as reasons for lowered expectations.

After months of exuberant gaming growth expectations, analysts are bracing for this week's release of the NPD Group's January US retail sales figures, expecting game software sales to shrink year over year.

In a note to investors, Pacific Crest Securities analyst Evan Wilson predicted that last month's software sales will wind up down 5 percent from the $549 million posted for January 2007, due to a combination of factors. One main reason for the expected decline is that the NPD Group's reporting period for last month was four weeks long, whereas the previous year's reporting period encompassed an extra week. If the two reporting periods had covered the same stretch of time, Wilson believes last month's figures would actually show growth for the industry of a little more than 10 percent.

Wedbush Morgan Securities' Michael Pachter also the shorter reporting period to turn what would have been a growth month for the industry into one in which it lost ground. Projecting that the NPD Group will report a sales shortfall of 9 percent for the month, Pachter said that the figure, when adjusted for the four-week reporting period, would actually show sales growth of 14 percent.

Lazard Capital Markets analyst Colin Sebastian was similarly reserved about the market's prospects. While he didn't put a concrete number on his expectations, he did warn that software sales would be "flat to up slightly," again noting the truncated reporting period as a main factor.

The "wisdom of the crowds" is siding with the professional analysts this month, as the simExchange prediction market is expecting game sales to be down a little more than 5 percent for the month. However, in his NPD preview note, simExchange analysts Jesse Divnich suggested that had the January reporting period been the same five weeks as it was last year, software sales likely would have been up 18 percent.

The shorter reporting period wasn't the only culprit mentioned for a projected software sales slide. Pachter pointed to a lighter early release schedule this year, and Wilson also suggested that this year's lineup doesn't measure up to that of January 2007. While both analysts expect Burnout Paradise to take the checkered flag in new release sales, Wilson said it can't compare against last year's slate of big new releases like Lost Planet on Xbox 360 and WarioWare: Smooth Moves for Wii.

On the hardware side, Pachter put the Wii first with the DS a close second, while the simExchange had the same pair topping the charts, albeit in a reversed order. Pachter placed the Xbox 360 atop the rest of the field, followed by the PlayStation 3 and the PlayStation Portable. On the simExchange side, the Xbox 360 still takes third, but the PSP outsells its console counterpart to round out the field.

62 Comments

  • truenextgen

    Posted Feb 16, 2008 8:02 am PT

    Yea by me lol. I said If we try and keep the 360 in front as a consumer. And these freak fans for no reason. Will get bored of gaming and it wil fall. If we push gaming to its new leaders and except them as programmers and gamers. Wii and PS3 for power.W would be gaming at a much higher level now. But the developers did not have the Wii, or cell "True Next Gen" games done yet. Or they gave them no attention. So this was bound to happen.

  • theKSMM

    Posted Feb 14, 2008 6:09 pm PT

    Some of us need these gaps in the release calendar to allow us to catch up with the games we couldn't afford to buy when they first dropped.

  • red-orc

    Posted Feb 13, 2008 2:17 am PT

    The problem is, that x-mas brought us countless good games you can now buy used for half price. Distributors should spread their big-budget-releases wisely over the whole year. If we know what to expect, we can save our money for that.

  • ghost867

    Posted Feb 12, 2008 3:25 pm PT

    *Waits for PS3 to overtake 360 sales*

    It's coming, it's just taking a damn long time, lol.

  • Chief_Kuuni

    Posted Feb 12, 2008 1:39 pm PT

    well as long as good games are made, people will buy them, nomatter what month it is

  • darknferno12

    Posted Feb 12, 2008 12:56 pm PT

    So whats a day in the life of an Analyst hanging out at gamespot.com for a few hours

  • TTDog

    Posted Feb 12, 2008 10:07 am PT

    @VenomRitual

    Seems they do, but the analysts predict they'll bark less once they're asleep.

    But thats only a prediction.

  • VenomRitual

    Posted Feb 12, 2008 9:20 am PT

    can the NPD tell me if dog's bark?

  • speedjunkie4

    Posted Feb 12, 2008 8:11 am PT

    In other news...this article is really not needed.

  • bradly_2795

    Posted Feb 12, 2008 7:54 am PT

    Awesome, some more information that is basically meaningless....

  • BigDaddy973

    Posted Feb 12, 2008 7:39 am PT

    Cause nothing good is coming out...

  • RockaWuzHur

    Posted Feb 12, 2008 6:39 am PT

    The NPD just announce things that the public already knows and gets paid for it. That must be an awsome easy job.

  • Homerj

    Posted Feb 12, 2008 6:32 am PT

    Well duh. Holidays are over, so a lot of disposable cash was already spent and many gamers had multiple titles to play through. And the biggest factor, no top-shelf games released in Jan, just filler like BP. The numbers will upturn again for Feb, with a few high quality titles like DMC4 and LO releasing.

  • Rect_Pola

    Posted Feb 12, 2008 6:09 am PT

    @ TTDog
    Worse, they get paid to randomly guess stuff too. We give away for free.

  • TTDog

    Posted Feb 12, 2008 5:49 am PT

    Seriously... do people get paid for spouting the bleeding obvious like this?

  • LosDaddie

    Posted Feb 12, 2008 5:34 am PT

    hopefully another victory for the Xbox360

  • sickside6

    Posted Feb 12, 2008 12:16 am PT

    thats already expected

  • mariokart64fan

    Posted Feb 11, 2008 11:50 pm PT

    we all know wii and ds are continuing to dominate as nes and snes dominated segas consoles wait and they always have dominated sega lol from its begining nes till t he end of sega - gc

  • plaestic

    Posted Feb 11, 2008 10:53 pm PT

    In other news... the sun will rise yesterday.

  • jsmoke03

    Posted Feb 11, 2008 9:07 pm PT

    i don't know if its down by that much. dmc4 came out and burnout. i think its not as down as everyone says it is. turok probably garnered couple copies as well

  • saintsrowCS

    Posted Feb 11, 2008 9:02 pm PT

    How seriously should you take a prediction at the end of the month, a few days before the sales figures are released?

  • OCMarshjen

    Posted Feb 11, 2008 8:53 pm PT

    And in other news... the sun is probably going to rise tomorrow!

  • PumpkinBoogie

    Posted Feb 11, 2008 8:53 pm PT

    Wow....a report that tells us that the gaming industry didn't fair well in sales for the month of January....

    No freakin' duh, analysts.....any gamer after the (finance breakin') holiday season coulda told you that. Every gamer knows not much comes out in January and even if it did--after December you're too damn broke to buy it anyway.

  • BoobyUnger

    Posted Feb 11, 2008 8:31 pm PT

    after christmas people dont usually have the money to be spending on games... you dont need to waste money on surveys to know this

  • Newsboy

    Posted Feb 11, 2008 8:22 pm PT

    Hmm. I did a lot of video game purchasing in january. What the hell is wrong with the rest of you?

  • Adam_the_Nerd

    Posted Feb 11, 2008 8:08 pm PT

    With the US port of Super Smash Bros Brawl, Grand Theft Auto IV and other big titles around the corner, it makes sense that Jan sales would slump

  • Extreme124

    Posted Feb 11, 2008 7:26 pm PT

    Thats why Dark Sector is out in March.

    I watched the Special on Gamer TV of Dark Sector showed how they made it also lots of other things.

    Def getting Dark Sector NOW!!!

  • musicaz70

    Posted Feb 11, 2008 7:19 pm PT

    This is like watching those hour+ long Pre-Super Bowl reports... Although this information was a bit more obvious, all in all it was pointless... And, quite uninteresting.

  • Javier

    Posted Feb 11, 2008 7:19 pm PT

    Gee, I can come up with the same "predictions" just by looking at Gamestops release list.

  • BigSmitts07

    Posted Feb 11, 2008 6:45 pm PT

    when hasnt january been a sucky month...everyone realses everyting during christmas that january is pretty much always dead and then march or so things start to pick back up again

  • Pete5506

    Posted Feb 11, 2008 6:45 pm PT

    Nothing good came out in Jan, only thing that was good was burnout

  • Generic_Dude

    Posted Feb 11, 2008 6:20 pm PT

    When Burnout Paradise is the big game of the month, yeah I expect that January sales will be down. But March and April will be pretty solid.

  • Merl57

    Posted Feb 11, 2008 5:19 pm PT

    i got paradise in jan i think

  • stillereize

    Posted Feb 11, 2008 5:11 pm PT

    Here's a thought: How can I buy games when my freaking Xbox 360 keeps coming back "repaired" yet still broken? Maybe if I had a console to play I'd buy one or two games, but Microsoft likes keeping McAllen Texas on the map instead of actually fixing the problem. God forbid they fix the Xbox 360's overheating and RROD issues or else India would fall into the Indian Ocean never to be heard from again. I pray everyday for this. Amen.

  • Zoard

    Posted Feb 11, 2008 4:39 pm PT

    Its been a slow month. Without much games coming out so its kinda obvious.

  • HellRazer360

    Posted Feb 11, 2008 4:22 pm PT

    wait what did this article say....it confused me...what are game sales lower or something???

  • DocGonzo1971

    Posted Feb 11, 2008 4:14 pm PT

    So, is it because of the shorter reporting period or the fact of US recession fears?

  • lamprey263

    Posted Feb 11, 2008 3:53 pm PT

    meh, an article about the NPD figures would be more interesting than people making predictions a couple days before the monthly report comes out

  • DravenLaVitt

    Posted Feb 11, 2008 3:47 pm PT

    hahaha..oooookay then.

  • Smoky_Hill

    Posted Feb 11, 2008 3:36 pm PT

    Wii DS
    360
    ps2
    psp
    PS3

  • Vardofire

    Posted Feb 11, 2008 3:32 pm PT

    Am I the only one thinking this is very uninteresting news?
    Seriously, give us something exclusive or insightful and no more of that economic prediction crap we seem to be getting more and more often. Also, did you notice that a lot of the other articles seem to be written by gamespot.uk...

  • ocdog45

    Posted Feb 11, 2008 3:24 pm PT

    compared to the last couple months, I guess so

  • RAWeber

    Posted Feb 11, 2008 3:20 pm PT

    does anyone really care about their ****

  • Fat_Boy_PT

    Posted Feb 11, 2008 3:15 pm PT

    In other news, the sky is blue, britney spears is a psycho and the world will end in 2 hours!

  • DevilMario54

    Posted Feb 11, 2008 2:51 pm PT

    Lost Odyssey might spark some life into these sales, maybe not much, but maybe some, at least for 360, not sure of any other big name games coming out for the ps3 or wii

  • JackfnBurton

    Posted Feb 11, 2008 2:51 pm PT

    So...basically...nothing...really happened. Just like the last few seasons of the X-Files!

  • VolcanoMan001

    Posted Feb 11, 2008 2:23 pm PT

    Ok, so do these people get paid to think up the obvious or what?

  • Michaelas10 posted Feb 11, 2008 2:13 pm PT (does not meet display criteria. login to show)

    Michaelas10

    Posted Feb 11, 2008 2:13 pm PT (hide)

    I still don't see why the PSP doesn't outsell the DS.

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