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Industry to rebound after February decline - Analyst

Wedbush's Michael Pachter predicts 10% software slump to $665 million for last month, March's "phenomenal" lineup will break industry's down streak.

The good news is that analysts believe the US gaming industry is getting close to emerging from its prolonged slump at retail. The bad news is that it doesn't look like the gaming industry entered the light of day during February, despite the release of such top-tier games as BioShock 2, Heavy Rain, and Dante's Inferno.

Take-Two has already trumpeted BioShock 2's strong opening.

Take-Two has already trumpeted BioShock 2's strong opening.

In a note to investors today, Wedbush analyst Michael Pachter predicted that when The NPD Group releases its annual US retail sales recap on Thursday, game software sales will have slipped 10 percent year-over-year to $665 million. Pachter attributed the decline to what has quickly become a thorn in the gaming industry's side: the flagging music genre.

"The February comparison is not as tough (+9 percent) as it was in January (+11 percent), but we expect another precipitous decline in music genre sales to around $20 million compared to $75 million last February and do not expect the decline to be offset by sales of the big launches during the month," he said.

Pachter believes Activision's Call of Duty: Modern Warfare 2, which is currently the subject of a heated lawsuit between the publisher and the game's creators, will make the top 10 best-seller list in February. The analyst's research indicates that EA's Mass Effect 2 and Dante's Inferno, Nintendo's New Super Mario Bros. Wii and Wii Fit Plus, and Take-Two's BioShock 2 also performed well during the month. (Of the latter title, Take-Two said last week that it had shipped 3 million units worldwide.)

In terms of hardware, Pachter expects the Wii to shift 455,000 units during the month, a figure down 40 percent year-over-year. The Wii's predicted decline notwithstanding, Nintendo's system is still expected to outpace the Xbox 360's 350,000 units, which itself would be down 10 percent from the year prior. Rounding out the console sales chart, the PlayStation 3's 300,000 units represents 9 percent year-over year growth.

With February at its back, Pachter believes the remainder of 2010 will play out swimmingly for the US retail game industry.

"The release schedule over the next four months gives us great confidence in our forward forecast," Pachter wrote. "In addition to highly anticipated titles like Sony's God of War III, Square Enix's Final Fantasy XIII, Nintendo's Super Mario Galaxy 2 and Metroid: Other M, and Activision's Starcraft II, we expect no fewer than 12 games released in the first half of 2010 to sell more than 1 million units apiece, with at least six selling more than 3 million units. In the first half of 2009, there were only eight games that sold more than 1 million units, with only one selling more than 3 million units."

Pachter is particularly enthused about March's "phenomenal" lineup, which includes Battlefield Bad Company 2, Pokemon Heart Gold and Soul Silver, God of War III and Final Fantasy XIII. He predicted that each of the titles will sell 1 million units during their first month of availability.

59 Comments

  • charizard1605

    Posted Mar 20, 2010 11:12 am GMT

    unbentonslaught,
    'nobody's going to buy Pokemon...'
    Really?

  • Trogeton

    Posted Mar 15, 2010 8:37 am GMT

    Dante's Inferno was awesome though

  • Ripper_TV

    Posted Mar 10, 2010 11:35 am GMT

    @fps_d0minat0r,
    Are you serious? VGChartz is always wrong, it is a joke.

  • Franzkill

    Posted Mar 10, 2010 7:42 am GMT

    @at tu2pac could not agree with you more. Its like an analyst thinks he/she had some sort of precognition ability of something, seriously how much do those jokers get payed for stating the obvious WHILST its already happening?

  • unbentonslaught

    Posted Mar 10, 2010 4:14 am GMT

    what phenomenal line-up??According to gamespot and other gamespot users, the new final fantasy game wasn't as good as the old ones... and nobody is going to buy pokemon,so god of war III and battlefield bad company 2 will be the only real sellers this 'phenomenal' month of March.

  • Sirbobislost

    Posted Mar 10, 2010 12:08 am GMT

    "games are to expensive" are you kidding? £40 is pretty decent price I still remember a VHS cassette being £70+ new

  • fps_d0minat0r

    Posted Mar 9, 2010 3:52 pm GMT

    @ gamer082009
    "I see Microsoft's still outselling the PS3."
    vgchartz must be wrong then because according to that the ps3 has outsold the 360 for the last 10 weeks.

    and dont forget racently, excess in demand and a shortage of supply has been holding back the figures for the past couple of weeks.

  • fps_d0minat0r

    Posted Mar 9, 2010 3:44 pm GMT

    @ darkcomedian
    no-one cares if dantes inferno is a multiplat......your saying it like its amongst the best games released this year.
    even if it was that good, "ps3 fanboys" can go and buy it if they wish.

  • fps_d0minat0r

    Posted Mar 9, 2010 3:40 pm GMT

    i agree $60/£40 is a lot but considering publishers wouldnt want to change their profit margins the only thing that would change with price drops are reductions to a games budget, making them worse.
    just like any other industry, the quality depends on the demand and wallets of consumers.

  • code305

    Posted Mar 9, 2010 12:45 pm GMT

    The sale would grow even more if they sold the game for a affordable price. From my experience, I only buy game with good ratings 9 or higher.

  • MassMayham57_

    Posted Mar 9, 2010 11:41 am GMT

    there are so many good games coming out this month so Software sales should be great

  • SicklySunStorm

    Posted Mar 9, 2010 11:32 am GMT

    @alex19589 - you should consider a games rental service like gamefly in the US or swapgame in the UK (didn't know where you were from). You get to experience a lot of games you wouldn't normally get the opportunity to buy, and it also helps you sift through the stuff that's not worth buying, avoiding the rubbish games because you've actually played them and found them to be not to your liking.

    Like Rottenwood says, gaming is actually amazing value and it's nothing short of a mathematical miracle that they still cost $40 - $60 (or £40 - £60 in UK) given that this is the same price we were paying for some 8-bit and 16-bit titles. That we still have the same unwavering price point, yet have games that can eclipse what many of us dreamed would ever be possible in the 80's is just staggering.

    Believe me, I'm no big earner in the money stakes, but as an adult, there is never a game that I must have that I'll go without... it helps if your wife is as frugal as mine I'll almost always get it on rent first unless it's a day one purchase in which case I just save in advance. If I can't afford a game when I want one, I just do what most people do and save until I can get it. Simple.

  • tu2pac

    Posted Mar 9, 2010 11:18 am GMT

    @darkcomedian

    LOL, I think the hate is because the game appears to be unfinished. How can something start so good and then fall off midway through?

  • tu2pac

    Posted Mar 9, 2010 11:16 am GMT

    How dumb do you have to be to be an analysts in the game industry? Any fool could see sales would be strong this year (at this point anyway) with the titles coming out.

    I could have made this prediction later year ... after E3 ...

    So what are they going to say when we hit the "dry spell" mid year? Say, "It's summer, gas prices are high so game sales are suffering"?

    Give me a break ... this industry has never been under any real stress. The only stress has been sub par studios releasing sub par games and expecting people to buy them. You know what that causes ... sub par studios to close down, lay offs, etc.

    You know what the difference is, thus far there have already been 3-5 games worth buying this year ... SURPRISE, sales are up...

    When we stop buying games again, because there's nothing good coming out, they'll pull a 180 and say there's a crisis in the industry.

    With everyone releasing at the same time .... it's the article I'm waiting to read ... so I can blow my top at the foolishness once again.

    I'd like to see the game collection of one of these analysts ...

  • Phaselinear

    Posted Mar 9, 2010 10:50 am GMT

    Your lucky to find 3 or 4 good games (remember, top games start out at $60 a shot) worth buying every year. The rest you just wait (6 months to a year later) until the price drops. Wages for hiring nerds and their bosses aside, the gaming industry needs to expand to the motion picture industry by selling the product as a movie series (Mass Effect, HALO...etc.) for example. It's working for the comic book industry, and it should also work for the gaming industry.

  • zeexdoom

    Posted Mar 9, 2010 10:30 am GMT

    sad truth is only 5-7 good games come out evry month as compared to previous years were you would easily have 10+ good games. publishers r 2 money hungry 2 be bothered 2 make a good game...

  • Jack_n_Coke07

    Posted Mar 9, 2010 10:19 am GMT

    I can't wait for those greedy *** holes to leave the gaming industry. But as people are mentioning, once gamers actually play for fun again, the developers probably aren't going to make fun games anymore. IMHO people are way too serious when it comes to video games......

  • RadicalToenail

    Posted Mar 9, 2010 9:55 am GMT

    @darkcomedian

    That seems to be the general mindset, but the funny thing is that Devil May Cry did it first...

    I prefer my PS3 over my 360, but it's just silly to be complaining about a game just because it is "similar" to God of War when Dante's Inferno is actually pretty enjoyable.

  • Rottenwood

    Posted Mar 9, 2010 9:51 am GMT

    @bsnimunf

    I was paraphrasing Tauu's entry further down the list; he got seven agreements, so apparently he's not alone in feeling that sixty dollars is too high. Unfortunately, the facts aren't in his corner. Provided you know your likes and dislikes and do a little research, gaming remains of the best, most cost-efficient hobbies there is, and it gets better every year.

  • kakashi6666

    Posted Mar 9, 2010 9:22 am GMT

    @darkcomedian
    i completly agree with u its like coz god of war done it first that dantes infernos not aloud its stupid

  • darkcomedian

    Posted Mar 9, 2010 8:56 am GMT

    What is with all the hate surrounding dante's inferno? its a pretty impressive game. I guess PS3 fanboys just cant handle having the same style of gameplay as their beloved god of war (I love god of war also) on a different console.

  • bsnimunf

    Posted Mar 9, 2010 8:31 am GMT

    @ rottenwood "$60 for 20-40 hours of fun is a waste of money"

    where did you get that quote from, cos who ever said it is insane. Maybe $60 for a game you think you are going to like but turns out to be crud is a waste of money but if your going to get 20-40 hours of fun then its a bargain.

  • Egotte

    Posted Mar 9, 2010 8:16 am GMT

    @Rottenwood Well said! It's sad to see the majority getting their rise from a limited quantity of games, like Bad Company, God of War, etc. No More Heroes 2 and Bayonetta are a great call, when it comes to two titles that are awesome and deserve to be selling more than they are.

  • Sirbobislost

    Posted Mar 9, 2010 7:45 am GMT

    Ok 2 things 1st since when is dantes inferno a "top tier" game?

    And more importantly "activisions Starcraft 2" it's a blizzard game....... If I'd been taking this interview i'd of lept accross the room and bashed his head in with a chair for saying that!

  • fattass21

    Posted Mar 9, 2010 7:12 am GMT

    who cares what happened with feb? when march fully hits, they are not even gonna care how much they DIDNT make then. tell me im wrong. :p

  • Skatman1

    Posted Mar 9, 2010 6:57 am GMT

    lol dante's inferno.

  • strayfies

    Posted Mar 9, 2010 6:49 am GMT

    Nickythenewt, absolutely. FFXIII I bet will be fantastic for players who are up for it, but I'm taking a 'wait and see' since it resembles another title in that series that I didn't like as much.

    This month pretty much nails the gamut, the only thing missing is some kind of GTA franchise hit.

  • nickythenewt21

    Posted Mar 9, 2010 6:40 am GMT

    Is it wrong to be the most excited for Heart Gold and Soul Silver?

  • Soko77788

    Posted Mar 9, 2010 6:25 am GMT

    How can you not rebound with Bad Company2, FFXIII, and GOW3 all in the same month?

  • Rottenwood

    Posted Mar 9, 2010 6:14 am GMT

    I'll never understand why people complain about the $60 price point for video games. I was paying that much for games for the Super Nintendo in the early nineties; sometimes more if it was a Final Fantasy title. The fact that game prices have remained stagnant while the games themselves have become a hundred times more complex and impressive is a small miracle.

    "$60 for 20-40 hours of fun is a waste of money." Really? Compare that cost ratio to other forms of entertainment - music, movies, sporting events, pay-per-views, etc. - and gaming is a clear bargain. Unless you're buying terrible games, of course, but with the hundreds of review and demo outlets available, that's the consumer's fault.

    There's really no such thing as a 'slow month' in this hobby. Sales reports from games like Bayonetta and No More Heroes 2 show that those games were sitting right there on the shelf, waiting to be played, while most gamers apparently threw their hands up and said "man, nothing good came out!" because they were waiting for another big-name FPS or God of War. Broaden your horizons and you'll never lack for something great to play.

  • Huzzaahh

    Posted Mar 9, 2010 5:34 am GMT

    I hate how he called it "*Activision's* Starcraft 2." It makes me shake with rage... well, not really, but I do hate Activision.

  • BDK-Soft posted Mar 9, 2010 5:01 am GMT (does not meet display criteria. sign in to show)

    BDK-Soft

    Posted Mar 9, 2010 5:01 am GMT (hide)

    top-tier games as BioShock 2, Heavy Rain, and Dante's Inferno. LOL

  • gamer082009

    Posted Mar 9, 2010 4:53 am GMT

    Wow, some of the paragraphs people are writing looks like blogs. I'll keep it short and simple..I see Microsoft's still outselling the PS3.

  • simply_cool

    Posted Mar 9, 2010 4:49 am GMT

    Why haven't the games companies produced "smaller" (even more?) versions of games for 5-10euros? payin 20euros+ for games like BF2 or CoD that r easilly ended in less than 1 day is plain stupid.
    Enterprises should try other ways to get the pirates off their heads (get them wanting to pay.. thats the best way..), people r still buyin CS and even StarCraft, not for the singleplayer mods, obv, so why not make MP mod only for big buyers?? if i try a game like CoD or BF2 on SP mod for 5euros, i'd pay mor 15 for the MP..

  • HonorOfGod

    Posted Mar 9, 2010 4:27 am GMT

    @metalkid9

    you cant be 4real right? go out! out side! there are Wiis by billions in stores now.

  • HonorOfGod

    Posted Mar 9, 2010 4:25 am GMT

    Simple stuff really, just make games we want and request and there you go! we will buy them DUH!

  • MERGATROYDER

    Posted Mar 9, 2010 3:28 am GMT

    LAWLZ

  • alex19589

    Posted Mar 9, 2010 2:24 am GMT

    Games today are pretty good but they also cost a bit much.Say that you are a casual gamer, you will buy maybe a game once, lets say, 2-3 months; it's not that big of a deal to pay 60$ on a game, but if you are a hardcore gamer, and you want to play the majority of new games, it's kinda hard to afford all of them. Of course people will buy Modern Warfare 2 or bad Company 2 because the hipe for them is insane, still they are pretty good games. Some people just want to wait until prices lower about 50% and then purchase the game.
    But there are also games that you can't wait to get. For ex. when Portal 2 will be released,I don't think that many will hesitate to pay whatever the price will be, and when HL2 Episode 3 will be available(soon I hope*_*), HL fans wouldn't care if they paid 100$. Games will always be made and games will always be bought, but except for some games that are really good(Mass Effect 2, God of War, Final Fantasy,HL) and not just a benchmark for videocards(Crysis etc) sales will always reflect quality. My opinion anyway.

  • soyt_llusala

    Posted Mar 9, 2010 12:19 am GMT

    Plenty of great games on the same month? I definitely can't afford to buy them all.

  • magicalclick

    Posted Mar 8, 2010 10:51 pm GMT

    Well, duh, Bad Company 2 is out.

  • Cathartic93

    Posted Mar 8, 2010 10:40 pm GMT

    Should be a good year to be a gamer.

  • Solidsnake13_2

    Posted Mar 8, 2010 9:25 pm GMT

    I honestly didn't think February had a decline, I thought February had a good line up of games....Oh well thats what the anlyst say. But March will change it up with already Bad Comapany 2, FFXIII and God of War III

  • wiidsduelpack

    Posted Mar 8, 2010 9:20 pm GMT

    I just went to Gamestop and heard how there are not going to be any more classic controllers. Now they are making classic controllers Pro and it sucks now. Just proves that the Wii is still a popular console.

  • drknessfeeds

    Posted Mar 8, 2010 9:15 pm GMT

    I agree that there are to many games out there, some of them really good. Still trying to budget for the games that are on my must have list as opposed to my want to have. One complaint that seems not touched on much is multiplayer, its just becoming ridiculous. Trying to juggle several online multiplayer games is getting annoying, I understand that its somewhat of a standard now but if its not going to be completely fleshed out then leave it out and focus on the single player aspect and its replay value. And what happened to local multiplayer??? Fav online games at the momoent are Kill Zone 2, Uncharted 2, Modern Warfare 2, Gears 1 & 2 ( Still love the game, have to get a fix from time to time). Give me a new IP developers, a online game thats an action adventure thats more in the vein of Batman AA, GOW, Dante's Inferno (cant wait for the expansion but cant go through the story co-op).

  • akiwak

    Posted Mar 8, 2010 9:05 pm GMT

    Dante's Inf. is no match for God Of War 3, that is why it is on sale at target for only $40.00. I can't believe how many great games are coming out this month. I will own at least 3 of those games this month!!! Time to use credit cards now that I've paid them off with my tax return... Lol

  • mariokart64fan

    Posted Mar 8, 2010 8:48 pm GMT

    yes pricing of these games are a very big problem ,, and the length is part of it , i remember back in 1997 when goldeneye came out , that was the biggest fps ever made it had 20 missions, now adays your lucky if you get 17-everything ornothng is the last one that had that many , perfect dark even comparing it to pd0 youll see where im coming from but o f course the price for pd0 was the usual 49,99 as were all launch 360 games

    so with that said ,, i refuse to spend 60 o n another halo that is supposed to be a add-on also i refuse to buy a cod a yr at 60 dollars its just not worth it , that like paying 50 for madden every year ive beaten all cods except mw2 cause idont have it , and i have no intention to buy another fps until march 17s release of perfect dark and im quite sure that will last me a long long time and its only 10 dollars/800 microsoft points 20 for the card so ya

  • Tauu

    Posted Mar 8, 2010 8:39 pm GMT

    Most games are simply not worth buying. I think that's part of the problem. I refuse to pay $60 for anything but the absolute best games that offer massive replay value and I'm sure I'm not alone. I have bills to pay and a car to maintain ($70 to change the transmission fluid today). I can't afford to spend $60 left and right on games and the value is just not there for most of them.

    I bought Audiosurf on Steam last year on sale for $5. I've logged 120 hours of gameplay so far. I bought Pokemon Platinum for $40 last year. I've logged 220 hours in that game. I played FFXI for 4 years, paying $13 a month and logging in 50+ hours a month. Before that it was Warcraft 3 for $50 and spending many hundreds of hours playing that (and soon Starcraft 2).

    There are so many high value games out there. $60 for 40 hours of gameplay seems like such a waste of money, which is what you get from many of today's hot new games. If they want to see more sales they either need to drop the price of games or raise the content (GT5, Modnation Racers and LBP are worth the $60).

  • Shardz7

    Posted Mar 8, 2010 8:31 pm GMT

    And now this industry is plagued with corporate fat cats eagerly awaiting their bonus checks instead of gamers getting quality games that offer longevity and replay value. Perhaps if more distributors actually had a clue as to what make a good game then they wouldn't have such problems counting beans. After hearing about the latest copy protection schemes such as Ubisoft's and now Steam-only games, one can only assume that the developers have completely lost their minds and common sense. I will purchase neither of such games and the more invasion the copy protection, the tighter I am with my wallet. Also, if these corporates want to make more money then trim the fat from the top where the pigs are being fed the most - not at the developer level where the creativity and magic needs to stem from. Mixing big business with games was a bad combination from the start and we are now seeing the nightmare come to life as in other capitalistic schemes. If $656 million is considered a slump for one month of crappy games that don't work as expected, then perhaps the corporates need to go corrupt another industry and let the developers put the fun back in gaming.

  • funnysplay posted Mar 8, 2010 8:16 pm GMT (does not meet display criteria. sign in to show)

    funnysplay

    Posted Mar 8, 2010 8:16 pm GMT (hide)

    No one should be allowed to play dante's inferno.

  • The_Capitalist

    Posted Mar 8, 2010 7:48 pm GMT

    Even though the guy is wrong a lot, there seems to be too much hate going for this guy. I watch his show on GameTrailers regularly and I like the guy. How many people from the finance world actually offer insight on the video gaming industry? Patcher is the only guy as far as I know. You guys are too hard on the guy.

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