Analyst expects 20% game sales slide in June

Pacific Crest Securities' Evan Wilson expects Fight Night Round 4 to break 1 million in disappointing month, says recession may be hitting games harder than previously thought.

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While year-over-year US retail software sales have been down sharply in recent months, analysts have expressed only mild concern, saying the problem is not this year's crop of titles, but last year's. The idea is that sales have been down not because the industry is softening, but because it's having to compete against a first half of 2008 that saw mega-blockbuster releases like Grand Theft Auto 4, Mario Kart Wii, and Super Smash Bros. Brawl.

The industry's rope-a-dope strategy may not be working...
The industry's rope-a-dope strategy may not be working...

With the industry-tracking NPD Group set to release its sales for June 2009 next week, one analyst is starting to rethink that notion. Pacific Crest Securities' Evan Wilson sent an NPD preview note to investors this week in which he estimated software sales for the month to be down 20 percent year-over-year to $700 million.

"Our most recent checks have indicated that the relative health that we have seen may not have continued into June," Wilson said. "Our contacts indicate that sales in the important 'school's out' period, especially in the last two weeks of June, were disappointing and represented a deviation in the early-year trend. While it is too early to call a long-term trend, we have taken a more conservative view of new and catalog products in our June NPD forecast. If the data back up our checks, it may be time to reassess the degree to which videogames really are 'recession proof.'"

While tough comparisons against last year's slate of titles have been blamed for prior months' decreases, Wilson blamed his projected June slowdown on sluggish reception for some of the month's biggest releases and slipping consumer confidence. Of the games to debut during the month, Wilson pegged Fight Night Round 4, Prototype, Tiger Woods PGA Tour 10, and Ghostbusters as the biggest of the bunch. The analyst estimated sales of 1.1 million for Fight Night across platforms, with Prototype not too far behind at 750,000.

"Prototype started well, especially in competition with Infamous," Wilson said, "but neither game appears to have much of a tail."

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