Analyst expects NPD slump to continue

Wedbush's Michael Pachter expects this week's sales data release to show July software, hardware sales down 7 percent; NCAA expected to lead pack with 800,000 sold.


After a big April in which Mortal Kombat and Portal 2 helped push sales up 20 percent, the US game industry entered its summer doldrums a bit early, posting double-digit declines in May and June. With the industry-tracking NPD Group expected to release its sales figures for July later this week, one analyst is predicting a third straight month of losses, albeit with a smaller overall shortfall.

Pachter thinks NCAA Football will repeat as the July sales champ.
Pachter thinks NCAA Football will repeat as the July sales champ.

Wedbush analyst Michael Pachter sent out a note to investors this week with his expectations for the NPD's figures, saying he expects software sales to be down 7 percent to $375 million, with EA's NCAA Football 12 leading the pack with 800,000 units sold. Last year's installment of the Electronic Arts pigskin sim also topped the NPD Group's July 2010 software charts.

Beyond NCAA Football, Pachter tapped The Legend of Zelda: Ocarina of Time 3D, Infamous 2, and L.A. Noire as continued strong sellers, with Nintendo's 3DS remake and the Rockstar-published detective thriller each notching another 250,000 copies sold. Pachter did not put a number on his expected sales total for Infamous 2.

As for hardware, Pachter also expects the number of systems sold to be down 7 percent year-over-year, partly because last July saw retailers selling through older versions of the Xbox 360 in the wake of the redesigned console's debut. Sales of the DS, PSP, and Wii are also expected to be weak in light of those systems' successors already being on the market (the 3DS) or on the way (the PlayStation Vita and Wii U).

"We continue to believe that sustained software sales growth will remain elusive until hardware sales rebound for an extended period of time," Pachter told investors. "In our view, given the 3DS's weak debut and the limited impact from May's Wii and June's DS Lite price cuts, a rebound is unlikely to happen until Microsoft and Sony cut the price of their consoles."

Pachter said Microsoft and Sony will likely consider cutting the prices on their consoles for the holidays, but he noted that strong Xbox 360 sales for most of this year might give Microsoft the luxury of pushing any such drop until 2012.

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