Gikas gives go ahead to games pre-NPD data dump

The industry is expecting to hear from industry research company, the NPD Group, today regarding October software sales. As usual, analysts are coming out of the woodwork ahead of time, prepping their investors and clients on what to expect.

This morning, PiperJaffray senior research analyst Tony Gikas provided investors with what he thinks will be the major findings. He expects:

• October software sales to be up 45 to 50 percent over the same month a year ago.
• Grand Theft Auto: San Andreas sales of 2.5 million units, on par with Halo 2's estimated 2.4 million unit first-day sales November 9.
• Overall sales that indicate a "great start" to holiday sales.
• October '04 software revenues to tally "$520-plus million."

Gikas is expecting software sales to increase 10 to 12 percent in calendar year 2004, and to decline five percent in calendar year 2005.

Some company-specific comments follow:

Electronic Arts:
"We estimate October retail sales of $94 million (+10 percent year-on-year) driven by sales of Madden NFL 2005, NBA Live 2005, FIFA Soccer, and Def Jam: Fight for NY. We estimate sales declined 10 percent sequentially from September."

Activision:
"We estimate October retail sales of $30 million (+57 percent year-on-year) driven by the launch of Tony Hawk's Underground 2 (10/4/04) and the late-September launches of X-Men: Legends and Shark Tale."

THQ:
"We estimate October retail sales of $30 million (+11 percent year-on-year) driven by key titles including: Tak 2, The Incredibles, and SpongeBob SquarePants: The Movie."

Take-Two:
"We estimate October retail sales of $140 million (+775 percent year-on-year) driven by the October 26 launch of GTA: San Andreas in North America."

Commenting further on sales estimates for the year ahead, Gikas said, "We consider 2005 and 2006 as transitional years for the video game sector, a period characterized by sales declines and slowing growth. Other risks include, shelf space, pricing, consumer spending patterns, and key management."

Analysts expect the official NPD figures for October to be released after the markets close today.