Furious February sales impress analysts

There are a dozen different ways to look at the monthly data dump that is the monthly NPD US retail sales report. For interpretations of February's numbers, GameSpot turned to a handful of industry analysts and asked what stood out for them.

While much of the focus for Nintendo was on the first-place finishes of the Wii and Wii Fit, Electronic Entertainment Design and Research analyst Jesse Divnich was more interested in sales of the company's handheld.

"Nintendo DS hardware was very impressive," Divnich told GameSpot. "Typically when we're approaching the launch of a new hardware system, we'd expect a decline in hardware sales approaching that date."

Divnich said the absence of a sales decline suggests that DS Lites are being snapped up by casual and mainstream consumers unaware of the DSi's release next month. That in itself is encouraging for the industry, as it points to the non-traditional markets continuing to push sales even two months after the holiday season.

The top 10 software sales also point to a strong casual market, as the list includes game releases from each of the last five years.

"A lot of the new gamers coming into the market don't know that Mario Kart DS was released in 2005," Divnich said. "To them it's new. Same thing with New Super Mario Bros., or even Wii Fit. The fact that they're still in the top 10 is stronger evidence that our industry is being driven more by these casual and mainstream gamers coming to the market."

Lazard Capital Markets' Colin Sebastian was similarly impressed by the months' NPD numbers.

"It was another solid month for video games in an otherwise downtrodden retail environment," Sebastian said. "Thanks to Nintendo and a few new other console titles, people are still buying games even as unemployment rises and disposable income contracts."

Not everyone was so laser-focused on Nintendo. Signal Hill Capital Group analyst Todd Greenwald applauded the hardware sales of Nintendo and Microsoft, but bluntly pointed to "continued sluggishness" from Sony.

"PS3 is in dire need of a price cut," Greenwald said.

In a note to investors, Wedbush Morgan Securities' Michael Pachter said he expects such a price cut, but not until the second half of the year. However, he doesn't expect Microsoft to let its current price advantage go without a fight, as Pachter said the Xbox 360 maker would retaliate against a particularly deep PS3 price cut with one of its own or with more attractive bundles. Such back and forth would certainly spur hardware sales, Pachter noted, adding that "investors should consider hardware demand a signal that the video game industry is resisting the effects of a recession."