Analysts expect summer surge in NPD figures

Predictions for July US software sales suggest year-over-year growth between 30-60 percent; Xbox 360 anticipated to beat PS3 in hardware sales thanks to recent price cut.

Last year saw record gaming sales at US retailers, but 2008 is on pace to crush those numbers. Heading into the back half of the year, the industry has already posted six straight months of double-digit software sales growth, and analysts are unified in expecting a seventh later this week when the NPD Group releases its US retail sales figures for July.

Lazard Capital Markets' Colin Sebastian was the most conservative of the usual NPD-prognosticating suspects, suggesting US software sales would only be up 30-35 percent over July 2007's take of $419 million. Wedbush Morgan Securities' Michael Pachter and EEDAR's Jesse Divnich were in virtual agreement, predicting 44 percent and 43 percent, respectively. Topping all comers was Pacific Crest Securities' Evan Wilson, who suggested US retailers sold $670 million in games last month, a 60 percent jump year-over-year.

"We have consistently underestimated growth this year," Pachter said in a note to investors, adding that "the video game software sector remains highly recession-resistant." To account for that ongoing underestimation, Pachter said he will be raising his full-year growth projection for the industry later this month. In April, the analyst projected a 19 percent growth spurt for full-year software sales.

Wilson has already raised his full-year tally from 20 percent to 25 percent. He said Wii software and music-based games have been the biggest factors in the industry's growth this year, but expects growth to slow later in the year as the industry faces increasingly difficult year-over-year comparisons.

On the hardware side, Divnich and Pachter expect the Xbox 360 to retake the Wii runner-up sales crown from the PlayStation 3 this month, based on a spike in sales after Microsoft dropped the price of the discontinued 20GB Xbox 360 model to $299 from $349. Pachter, Sebastian, and Wilson said Microsoft would benefit from cutting the price of the hard-drive-equipped Xbox 360 to $299 permanently, as has been rumored. (Wilson did not address hardware price points in his note.)

58 Comments

  • kalipekona

    Posted Aug 18, 2008 2:22 am PT

    @ mall69
    How's that crow taste? You know, you could have waited until the NPD numbers actually came out before you started trumpeting a 360 victory over the PS3.

    So it turns out the PS3 beat the 360 even with the 360's price-cut. So much for all those Xbot predictions.

    @ joeboosauce

    I don't really like Microsoft as a company but that is not why I prefer my PS3 to my 360. The reason is because I feel the PS3 is a better machine in terms of design (aesthetic and functional), features (Blu-ray etc.), and reliability. Especially reliability. My 360 has died on me three times and I think that is unacceptable. In terms of games, I think they are about equal. The multi-platform games are available on both consoles and they both have some great exclusives. (Uncharted was one of the best games I have played this generation and was in my opinion a better game than some of the big 360 exclusives.) However, going forward I think there are even more PS3 exclusives that I am looking forward to than 360 exclusives. Socom, LittleBigPlanet, Resistance 2, Flower, Killzone 2, and Infamous are all must-buy games for me.

  • joeboosauce

    Posted Aug 17, 2008 10:53 am PT

    @indysurfn
    Microsoft is an evil monopolistic company. They aggresively destroy competitors and force inferior products on us such as Windows. They are holding on to old paradigms and fighting open-source. They were innovative but now are overbloated. I don't like them trying to take over another industry. We don't need their "innovation". They and Intel are fighting affordable $100 laptops. Even trying to derail a philanthropic initiative to maintain their stranglehold on the market. Besides all this I am no brand loyalist and I have to say the PS3 is definitely a better machine. Read this about the EVIL MS:
    Why Microsoft and Intel tried to kill the XO $100 laptop
    Nicholas Negroponte had a vision: to build a $100 laptop and give away millions to educate the world’s poorest children. And then the fat-cat multinationals got scared and broke it...
    http://technology.timesonline.co.uk/tol/news/tech_and_web/article4472654.ece

  • indysurfn

    Posted Aug 17, 2008 8:22 am PT

    Man Microsoft can't win with you people! If they don't drop the price then they get criticized for not dropping the price after it has been on the market so long. If they do drop the price then you people say they are desperate! They are NOT desperate, win Sony had the ps2 ahead of the xbox in sales they dropped the price ahead of the xbox!!! Did you say Sony was desperate? No Sony was smart and putting distance between them and Microsoft, and making the sales momentum unstoppable. Which is what Microsoft should learn from them this generation.

  • Questlove711

    Posted Aug 16, 2008 6:07 pm PT

    Taking a side on the consoles is stupid.

    Do you people realize you are arguing about sales figures?!

  • Nineball2112

    Posted Aug 15, 2008 11:43 am PT

    mall69 Posted: "Once again the 360 trumps the mighty PS3."

    Haha... so, what's it feel like to be totally wrong on that? It seems you were a bit too cocky for your own good considering that the PS3 AND the PSP outsold the X360 for July.

  • division_9

    Posted Aug 15, 2008 4:59 am PT

    @Mall 69

    A fanboys a guy who takes a side between two things(console in this case) so pretending and even saying youre not one is really just stupid considering what you do say gives every hint that you r one. And for the record giving a product(Xbox 360) a price cut when its winning and is staggeringly cheap compared to its direct competitor(PS3) shows some desperation on Microsofts part. Microsofts scared and they should be because in the end Sony's Bluray drive on top of the PlayStation reputation is going to put a Capital E in front of the Xbox.

  • ps3thabest

    Posted Aug 14, 2008 1:46 pm PT

    @mall69-360 will fall like the gods.

  • mall69

    Posted Aug 13, 2008 2:54 pm PT

    Once again the 360 trumps the mighty PS3. It's like music to my ears, (only because it infuriates you Sony fanboys.... one of the definite jewels in life is watch the silly, illogical, frustratingly narrow-minded people of the world forced to eat their own words) The PS3's been out now for what?.. 21 months or so, how many of those months can it claim as besting the 360..... 6.. maybe 7 or 8. Does it matter, it's losing period and it doesn't matter how many price drops, or sly corporate moves Sony executes in the future, Microsoft will be right there to beat them to it. Sony should start selling T-shirts with the PS3 logo and a big "Just Wait" right below it. I know i sound like a 360 fanboy, i'm really not, the PS3's a great system.... i just enjoy imagining the Sony clan squirming around in their seats while desperately trying to come up with something new to validate their nerdy allegiance to one company.
    Burn on there Microsoft.... show them goofy bassterds what for..... price drops, Jasper models (no more RROD), exclusive content on cross-platform games, Netflix.. just keeps getting better.

  • xdeiri

    Posted Aug 13, 2008 9:16 am PT

    Analysts predicts peanut butter to be included in toasts next year , with some shortages caused by some elephants ?
    Although I agree with them in this on (In the past analysts were called sorcerers and burned alive? )

  • atopp399

    Posted Aug 13, 2008 9:04 am PT

    WardCleaver02,

    I agree 100% with your Blu-ray comment. I know of 2 people for sure who do not have any games for the PS3 but bought it because it was the cheapest Blu-ray player at the time.

  • atopp399

    Posted Aug 13, 2008 9:01 am PT

    I would much rather contribute my money to game makers than oil companies anyway. With more people skipping vacations this summer it wouldn't surprise me to see more game sales.

  • WardCleaver02

    Posted Aug 13, 2008 8:47 am PT

    It is all about the games. I know that has been stated ad nausem, but it really is true. Therefore, I think Sony needs to think about matching MS's price cuts. At this point Sony really doesn't have a solid library of AAA games to justify the investment in their console for gamers. I think they have been getting by on the fact that Blu-ray appears to be the next gen winner for Hi-Def movies. But, they really need to make the PS3 a worthwhile investment to gamers.

  • gamerkiduri

    Posted Aug 13, 2008 3:32 am PT

    nintendo man, u said 360 will beat ps3 but by how much. now the PS3 IS BETTER THEN 360 IN EVERY WAY.

  • gamerkiduri

    Posted Aug 13, 2008 3:27 am PT

    i only hve a wii but im gettin a ps3 cause its more worth then a 360 and ps3 is such an awesome console. its alo reliable and its got my fav games. tekken6, mgs4,killzone2 and god of war3, these r better then ant games on 360.

  • gamerkiduri

    Posted Aug 13, 2008 3:22 am PT

    360 costs u more then ps3 cause u hve to buy battries for pads,wi fi,live hd drive etc, which costs u more then ps3. all of this is alredy buit into a ps3 so ps3 is worth buying. ps3 is also reliable and has bluray. its also getting grreat exclusive games which r better then 360 exclusives.the psn is already better then live thnx to home and its free. and everone knows ps3 is made by sony so its better then 360.

  • Ton77

    Posted Aug 12, 2008 7:06 pm PT

    @jeremiah06

    Yeahh and most of them come out Q3,Q4 of 2009. And if the 199$ 299 399 Price point is true 360 will dominate

  • godzillavskong

    Posted Aug 12, 2008 7:02 pm PT

    Anyone remember the high priced, technically advanced Neo Geo?Its software was severly lacking, and then they pulled the plug. The PS3 has plenty of 3rd party support, along with free online, so I doubt they'll do a price cut. I don't think they could afford to.

  • Valen_Ca

    Posted Aug 12, 2008 6:16 pm PT

    I can't see them pulling PS1 BC, simply because that is all done in software anyways so they wouldn't really save any money by removing it. Although, they were pretty quick to remove PS2 BC, both the original hardware and the later software versions of it from their cheapest units, so who knows..

  • lamprey263

    Posted Aug 12, 2008 3:03 pm PT

    Sony can't price cut the PS3 any further, they've already removed nearly all the BC features and some USB ports to save money on production costs, there's nothing left for them to take out now to cut the price any further, except maybe PS1 BC. This is an excellent move on Microsoft's part 'cause every X360 price cut has been not only followed by a PS3 price cut, but the PS3 price cuts were at the sacrifice of the PS3's features.

  • -Squirrel-

    Posted Aug 12, 2008 3:00 pm PT

    The game industry growth rate is just explosive. For an industry that was established over 20 years ago, this is jolt of renewed gaming confidence and expansion. The Xbox 360 got some numbers rolling with a great looking HD system, but it's easy to see that Nintendo really cracked this market open. The Nintendo DS and Wii took a popular hobby, mostly for boys and young men, and made everyone in the country a gamer. With gaming open to everyone, I don't think you can even guess the limit of this type of growth.

    Video games are now fast becoming the premier media/entertainment format and are soon to be America's new #1 pastime. This is the start of the golden age of gaming.

  • mikewalsh69

    Posted Aug 12, 2008 2:34 pm PT

    Sony should try to cement their online community by including headsets in their bundles(at no extra cost). that would really make the community better. thats the only thing PS3 need to do with their bundles.

  • grigjd3

    Posted Aug 12, 2008 1:41 pm PT

    Ah, I got thumbs down for pointing out facts that someone misrepresented. Would I have gotten thumbs up for pointing out that Oblivion looks better on PS3 than the 360? What would happen if I said the Wii has dominated this generation so far? I'm sure that would get me lots of thumb's down. Or how about I mention that I bought a PS3 because I was tired of the 360 breaking? Oh that'll get some thumbs up. But if I mention that I liked xbox live far more than PSN? Well then thumbs down. Which is it going to be people out there on the internet feebly imposing an opinion on someone for presenting bare facts?

  • ps3thabest

    Posted Aug 12, 2008 1:37 pm PT

    @jeremiah06 i agree,if that doesnt work we will stand outside the m$ building, and fight for sparta, and have drinks in hades.

  • c_rake

    Posted Aug 12, 2008 1:05 pm PT

    jeremiah06 wrote:
    Haku_Ryushi wrote:
    Sony should really start waking up and know that even a $400 80GB console is STILL EXPENSIVE. They should start by at least making another $50-100 price cut.
    The PS3 does not need a price cut. just some more high profile games which are coming.

    I agree. Although, a price cut might help sales. After all, not everyone willing to pay $400 for a PlayStation 3. But still, Sony seems to be doing well, so I don't see them doing any price cuts anytime soon.

  • AngelsongCA

    Posted Aug 12, 2008 12:43 pm PT

    Price wins over features every single time. Gamers just want to play games, the cheapest method to do that wins out.

    This holiday will paint a vivid picture of that soon.

    XBOX 360 will no doubt sell out completely if the price drop rumors are true. $199 $299 $399. A system adjusted to your pocket book, based on flexibility. It's as cheap or as expensive as you want it to be.

  • jeremiah06

    Posted Aug 12, 2008 11:08 am PT

    @Haku_Ryushi:

    The PS3 does not need a price cut. just some more high profile games which are coming.

  • condemned100

    Posted Aug 12, 2008 11:06 am PT

    It depends on the Games people like. If they like a Game that is Exclusive to PS3 or Exclusive to Xbox 360 they will buy that Console and stick to the Console the Games they like are on no matter what the console Is. Hardware doesn't matter.

  • MFDABADKID

    Posted Aug 12, 2008 11:04 am PT

    Sony wont need to price cut the 80gb system is well worth it. The game lineup in the fall will prove that Sony does not need a price cut.

  • -Roflcopter2-

    Posted Aug 12, 2008 10:58 am PT

    ''lol i really dunt give **** bout the hardware sales its all bout who brings tha GAMES!!!''

    Well who ever brings the games will go to the comany selling more hardware...facepalm*

  • grigjd3 posted Aug 12, 2008 10:52 am PT (does not meet display criteria. login to show)

    grigjd3

    Posted Aug 12, 2008 10:52 am PT (hide)

    @normsta, Um, all the consoles are out of date now. My friend is running his PC with two quad core processors (yes that's eight processor cores) and a 512MB video card. Consoles are out of date the day they arrive in stores. What's more, you point out limited BC with the xbox, $ony has completely dropped BC with the PS3.

  • gamecubepad

    Posted Aug 12, 2008 10:22 am PT

    The 360 being cut to $199, $299, and $399 is still an unconfirmed rumor, that's why the analyst didn't fail. MS won't just ditch the 360, although I hope they come out with a new system soon.

    Remember that consoles being worth their price is dependent on whether they have games for the system that you want. To me, the PS3 is not worth it's price because I can't justify spending $499 to play MGS4 and Uncharted.

    It will be interesting to see the NPD numbers, they should give a glimpse into the sales for the rest of the year.

  • normsta

    Posted Aug 12, 2008 9:28 am PT

    it's funny how people think the ps3 should drop in price, if a system should drop in price it should be the 360 since the system it self isn't even worth the cost and it's going to be obsolete in about a year or two. Unless they come out with a revamped system but then that would be ripping people off since everyone that has already bought one would be screwed. I know that M$ wouldn't care if they ripped people off since they are already doing it with online fees/not supporting thier original system/having to buy hundreds of first party accessories/ bearly any BC. I'll be laughing when people are going to be pissed that M$ just ditches their system again.

  • bruno_ps2

    Posted Aug 12, 2008 9:20 am PT

    the analyst failed. the price cut for the 20gb system was only until it was out of stock, because production was discontinued. the 60gb model is still 349.

  • VenomRitual

    Posted Aug 12, 2008 8:03 am PT

    the summer is the worst time for games. all we'll have is madden. it's not going to increase by that much. =\

    360 sales will probably beat the ps3, but that's because consumers that don't realize its a 360 without all the goodies.

  • Haku_Ryushi

    Posted Aug 12, 2008 8:01 am PT

    Sony should really start waking up and know that even a $400 80GB console is STILL EXPENSIVE. They should start by at least making another $50-100 price cut.

  • BRAWLL

    Posted Aug 12, 2008 8:01 am PT

    well good news the market s looking rich, i think MS is doing a good thing but can they sell more when PS3 exclusives hit store this fall, not to mention home, and LBP.... lets see what the console wars goes

  • Nineball2112

    Posted Aug 12, 2008 6:25 am PT

    I agree that the X360 will more than likely retake second in sales for July (on the hardware side).

    Not only will the price cut on the 360's have an effect, but also because of the announcement from Sony about replacing the 40GB model with a 80GB hard drive. I think some people will hold off until the 80GB models are available rather than buy any 40GB's out there.

    It'll be interesting to see what Sony does if MS starts selling more units month after month. It's going to be tight the rest of this year and I think the holidays will be a free for all!

  • fffreak999

    Posted Aug 12, 2008 6:19 am PT

    This is for all the people who say that Nintendo needs to cut the price. In case you haven't noticed, Nintendo is having issues meeting demand. A price cut would only increase the demand, leading to more massive Wii shortages. Nintendo is probably waiting to be able to actually supply those who currently want the Wii before they even consider dropping the price. If all produced Wiis are selling at the current price, it just makes sense to leave it like that to maximize profits. Also, Microsoft and Sony are using newer technology which is now considerably cheaper to make then when the consoles came out, allowing them to lower prices and still increase their profits. Since the Wii is not as technologically groundbreaking, it's production cost will have only slightly dropped since the release, meaning that a price cut will significantly lower profits. That said, I expect that Nintendo will cut the price early next year, unless sales start to slow down in the months leading to the holiday season.

  • K-Grogg

    Posted Aug 12, 2008 6:06 am PT

    Do I care what games or consoles sell the most? No. Why? Because I'm not afflicted with this weird psychological tendency to care so tenderly for the corporate giant who doesn't give a flying crap about me or any other consumers like so many of you. I just care how good the games are, not how good their sales statistics are, will my gameplay experience be more fulfilling if I know 5 million or 6 million copies were sold? No. So get over it, I'm tired of reading such childish responses. And guess what: I own a PS3, play it ever day, and I also spend plenty of time playing Halo 3 at my friend's house when he's not at my house playing MGS4. I also have a Wii which I sometimes play with my siblings or even my parents if we feel like it.

  • ParisSun

    Posted Aug 12, 2008 5:21 am PT

    I have my 60g 360, so I don't care about hardware sales. I want more great games. Preferably some great western rpgs.

  • kweeni

    Posted Aug 12, 2008 2:20 am PT

    personally i dont give a s*** who beats in hardware sales and who not, all i care about is who beats in bringing the most and best games

  • gamer082009

    Posted Aug 12, 2008 1:52 am PT

    I don't see the PS3 dropping their price to, which will ultimately give Microsoft the chance to take advantage of that. The 360's future looks bright.

  • Merc1319

    Posted Aug 12, 2008 1:47 am PT

    keep it up 360, just wait until christmas time, sales will go through the roof, with banjo 3, gears 2, fable 2, lips etc being released

  • mariokart64fan

    Posted Aug 12, 2008 12:34 am PT

    well these are only predictions , wii will sell , more then 360 as usuial lol , so i expect nintendo to stay on top if not next month will be 360s price isnt high ,, i doubt the price drop will help much ,.

  • tawagivercetti

    Posted Aug 12, 2008 12:32 am PT

    kudos 360 whip that black doorstop

  • Phantom_2 posted Aug 11, 2008 10:33 pm PT (does not meet display criteria. login to show)

    Phantom_2

    Posted Aug 11, 2008 10:33 pm PT (hide)

    well its a price drop. Now the question is . WHEN WILL THE WII DROP ITS PRICE!!!!

  • truenextgen

    Posted Aug 11, 2008 10:06 pm PT

    The dead months "as most call it". All you have is the basic brat gamer, thus you have the Madden and NCAA kids. So If the 360 is gonna take 2nd in any months, it will be the 2 around this time. After that they may fall back to third again. Alot of good games for all in Sept threw Nov.

  • T3h_M3tal_Biggz

    Posted Aug 11, 2008 8:47 pm PT

    erspnally i don't think will be alotta video games sold this month. there will be the only game that is any good( I mean to sell alot) is madden 09.

  • PS3_3DO posted Aug 11, 2008 8:46 pm PT (does not meet display criteria. login to show)

    PS3_3DO

    Posted Aug 11, 2008 8:46 pm PT (hide)

    The only tme the PS3 is going to beat the 360 in sales from now on is when a big movie gets released on Blu-Ray like the Dark Night.

  • TristanH12

    Posted Aug 11, 2008 7:43 pm PT

    They have like one of the best jobs ever, and I cant believe that I am beginning to automatically recognize these peoples names cause they are always the main analysts in the news. Thanks gamespot for at least reporting on the actual gaming business information and not just games themselves.

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