Analysts bullish on Starcraft II sales

Signal Hill's Greenwald calls 5-6M sales estimates conservative, while Lazard Capital's Sebastian predicts 6.5M sales for Blizzard's latest through 2010.

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Blizzard Entertainment's Starcraft II still didn't have a release date in February, but that didn't stop a host of analysts from laying out their predictions for the sci-fi real-time strategy title. Pacific Crest Securities' Evan Wilson put the game's sales at 6 million, while Wedbush's Michael Pachter felt Starcraft II and World of Warcraft: Cataclysm could combine to sell 12 million through the end of 2010.

The stars seem to be aligning for blockbuster Starcraft II sales.
The stars seem to be aligning for blockbuster Starcraft II sales.

With Starcraft II out for just over 24 hours, Blizzard has yet to offer official sales figures for the title. However, that hasn't stopped a new batch of analysts from weighing in on the game's sales potential over the next several months. Signal Hill's Todd Greenwald believes Activision Blizzard's bottom line will be inflated by Starcraft II sales of upward of 5 million.

"We have picked up nothing but positive data points on the recent launch of Starcraft II--from South Korea to New York, the excitement over SCII is palpable," Greenwald wrote. "We think that rough estimates for Starcraft II to sell 5-6 million units this year are highly achievable and will prove to be conservative over the next five months."

Greenwald called out a variety of reasons for making his multimillion-unit sales prediction for Starcraft II. Namely, he said the original Starcraft, released in 1998, has sold 10 million units worldwide, 5 to 6 million of which were sold in Korea. He also noted that there are currently 11 million users still actively playing the original Starcraft and Diablo II through Blizzard's online platform, Battle.net.

More than just selling a Zerg rush's worth of units, Greenwald believes Starcraft II will bring hefty operating margins for Activision Blizzard.

"Despite being in development for four to five years…the vast majority of SCII's development costs have already been expensed, which makes the margin impact of SCII even more positive," he wrote. "It already stands to be one of Activision's most profitable titles, given that it is on the PC (no $8-9 hardware royalty), it is retailing for $60, not $50, and it should sell a large portion digitally through Battle.net, foregoing the 20 percent royalty paid to retailers. We believe SCII can approach 50 percent operating margins and contribute at least $0.07 of earnings to Q3 results."

Though he did so in a less verbose fashion, Lazard Capital Markets' Colin Sebastian also expects Starcraft II to sell gangbusters before the end of the year. According to the analyst, Blizzard's latest should sell some 4.5 million units through September, a number that could swell to 6.5 million units through the remainder of 2010.

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Gelugon_baat

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@kwanzudood Oh, thanks for pointing out that the NPD is different from Wedbush Securities. That was a rather embarrassing mistake on my part; I do know that there are many different kinds of business-related professional careers, but I suppose that I don't have the background necessary to differentiate between them immediately. My apologies to anyone here who may actually be working for NPD. That said, you might want to take a look at << LINK REMOVED >>. (I could not verify this article through its source, but the source article appears to be published for free, albeit only for registrants of GamesIndustry.biz.) It would probably boil the blood of any NPD supporter.

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kwanzudood

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@Gelugon_baat Pachter works for Wedbush Securities, a brokerage firm, not NPD, which is a market research firm. A brokerage firm provides advice and hawks packaged investments of stocks/bonds/whatever company securities, and NPD deals strictly in numbers of units sold of a product. These are two very different kinds of businesses. When you're hearing analysis from someone who's working for a brokerage firm, they'll say anything to make people listen to them because it only strengthens their image as financial advisors.

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BlackJakal

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the game was pure genious! just amazing!

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BlackJakal

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[This message was deleted at the request of the original poster]

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Tripwolf

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If any game released this year deserves to sell well - it's SC2. The game has blown me away and I'm not usually a RTS game fan. This game has brought the genre to a whole new level.

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Gelugon_baat

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@kwanzudood My apologies if my previous comment offended you in any way. I do understand the need for market research though, and I do happen to like reports and forecasts that are backed by very solid data (such as those you would perform, as you mentioned). I have written before in earlier articles concerning Pachter that he appears to rely on sources within the industry and past data; I even get the impression that he uses hear-say. For forecasting work, this is of course not satisfactory. However, I do not believe that all video game industry analysts are as terrible as he is. There had been a << LINK REMOVED >> on legal PC game downloads by the same group that Pachter belongs to, NPD. This one has the methodology mentioned. I would have preferred more details, but then I do not know where the line between making a very comprehensive report and revealing company secrets is drawn. Of course, this article is also not intended as a forecast, but Pachter and his crew would do better if they at least did some surveys among the consumer bases.

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kwanzudood

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@Gelugon_baat @Zarzha I'm not debating the actual performance of marketing research, I'm doubting these videogame analysts' credentials, because these quotes that are being reported as news are estimates that show no real depth of research or in looking at other benchmarks in the industry. To both you and Zarzha, I've worked in audit for a Big 4 accounting firm (the ones that review Fortune 500 financial statements) and when we perform analyses like this, we document not only the conclusion, but we have to document data sources and rationale, otherwise the conclusion has nothing behind it. I've tried clicking through links and googling these "videogame analysts" work to see if I can find some actual report of their findings, but I've seen nothing. Their quotes are so shallow and obvious that it barely reflects any real depth of understanding on their part of the game industry, it looks to me like they just look at prior sales figures and guess. They're probably right about being bullish on Starcraft 2 sales, but I'm probably right if I say the sun will rise tomorrow, and I didn't have to be an astronomer to say that.

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kwanzudood

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@Zarzha So you're saying that you care more about the doctor's diagnosis than the process? Having an idea of their process is what reveals if their credentials are valid or not, would you take advice from a quack doctor?

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Phazevariance

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The game is really fun, just like the first one, but with many more types of units. Multiplayer is fun, doesn't need LAN. The main reason they removed LAN play was because of pirating. Now even the single player needs battle.net, but thats fine, if you bought the game, you 'should' have internet by now. DEFINATELy worth the price and time to play.

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lamprey263

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no doubt this will be a big hit, hypothetically even if it weren't a good game I think it'll sell well just off all the hype that's around it, but I think it'll be kind of ironic if it doesn't sell as well as they expected because people refuse to give up playing the original Starcraft, either way though I think you'll still see many people still playing the original Starcraft, I mean it's been out 10+ years and still has 11 million active players, and when you're hooked on something that long change can be scary

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Rougehunter

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For the people bashing the whole 3 game split up you obviously haven't played this game. Blizz said themselves that if they did all 3 into one it won't be out until late 2011-2012. The single player has that much depth in it. After playing it you'll see what they're talking about.

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wahyudil

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$60 dollar for this ...... and no LAN support ... I should rethinking about 12 times for buying this ...

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method115

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@HK-Ghost I agree no Lan support sucks I don't know why Blizzard was thinking. I honestly don't believe it was there decision to do this but who knows I wasn't there. I'm more interested in the single player campaign but I did love playing with my friends at my house without internet.

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HK-Ghost

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enoslives7: "[...] there's no LAN support [...] What a shame to see a company like Blizzard ruined by the likes of Activision." Of all the things you said, this is the only part that I think I can agree with..

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hotfiree

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Im just a little turned off by all the packs - they needed to just make it in one big game on one disk.

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clqtte

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I will get it when it's around $19.99..............

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enoslives7

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SC2 is an epic fail. The game is too easy, the multi-player is tired, there's no LAN support, and Activision, ummm I mean Blizzard, tracks everything you do thru battlenet. What a shame to see a company like Blizzard ruined by the likes of Activision.

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reanor2

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1 copy of SC2 for every blizzard fanboy. I still don't see whats so special in the game. I've seen video's, I watched people play for about 45 minutes... Its the same RTS as any other out there. And NOT necessarily better. You just make swarms of units and own the other guy. Nothing special about units either. Well its IMHO but I kinda like Warhammer: Dawn of War II better, even though you cant call it real RTS. I think its just a mass hysteria. Nobody knows WHY, they just need to have Starcraft 2.. lol. I am glad I am not one of them.

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BubbaEgge

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Gee I wonder if the people that gave me a thumbs down pirated their copy of Starcraft...

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severe_009

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@ athenian29 Can you please point out where did I say " I don't like Starcraft"

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athenian29

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@severe_009 They're splitting the campaign AND multiplayer into 3 parts. Each installment is a stand-alone release, containing both a large campaign and the full multiplayer component (the expansions will, of course, include their predecessors' improvements). The campaign is worth the split because it contains 26-30 missions in each installment, which in and of itself is worth the price of entry. After all, being an RTS where each campaign scenario can take upwards of 20 minutes on a difficulty suiting the player, that's a lot more than the 6 hours of gameplay that Call of Duty fans have become accustomed to. The multiplayer is worth the split because like Brood War before them, the expansions will add numerous new units, technologies, and other improvements to the core experience, both in-game and out. Blizzard has never reneged on a promise to deliver meaningful changes in an expansion pack, and it serves no purpose to discount them now. If you don't like Starcraft anyways, don't play it. It's that simple. I, for one, appreciate both Starcraft and Half-Life, and look forward to future releases in both franchises.

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severe_009

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@ SirMordredX Sorry, I never knew Half-Life 2 existed "ages ago"? And half-life game is a single player core game, and starcraft is a competitive multiplayer core game, so i don;t think splitting the game into 3 just for the campaign is reasonable? What? Is it because the campaign is full of cinematics thats why they have to split it to 3? I think you're the one who should go to the mentally insane asylum... please.

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PixelAddict

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@SicklySunStorm Definitely get your hands on the first one. If you have a friend or two to join in, that's the best way to go. I played an hour or two of that first one's campaign, which seemed sort of stiff and contrived for my tastes. It's multiplayer on battle.net that sucked 100's of hours away. If you don't have a friend who will play with you, then set up your own game with a computer A.I. teammate against 1 computer enemy. Seriously fun stuff!

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SicklySunStorm

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@DeathsHead419 - thanks for the heads up! I've got my beady eye on the collector's ed now.... :D

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DeathsHead419

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@SicklySunStorm The Collectors edition of SCII has the origonal game and it's expansion on a USB drive. Or if that's too coast prohibative, the battlechest is still avalible for about $20. That's what I'd recommed, the battlechest, both the origonals. It even includes a matching pair of miniature stratagyguids to go with 'em.

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SicklySunStorm

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@method115 - definitely a good idea, I realise from any game set in a sci-fi universe that story is key, and jumping in as a noob on a sequel probably isn't the best idea(!) Is the majority of Starcraft offline as a single player experience, or is there a large portion online only (perhaps also requiring a subscription?)... shocking that I don't know the answer, I know(!) ha ha

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method115

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@ SicklySunStorm You should play the original starcraft as well. The great thing about starcraft wasn't just it's game play. The story was very well done something a lot of games like this don't do well at all. I'm actually playing the first one now and then I'll be playing the second one.

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SicklySunStorm

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I really must take a look at this game... the first one passed me by as I wasn't a PC gamer until very recently. I loved Warhammer 40k as a kid and can't believe only now I'm finding out that Starcraft is based on a very similar premise. Swish. Think I'll pick SC II up at the end of the week and see what exactly is what. :)

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Pete5506

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I could see it passing 6m

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Gelugon_baat

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@kwanzudood << LINK REMOVED >> is a very difficult thing to do thoroughly (if the very hefty Wikipedia article linked here does not show already). If you would prefer a good (relatively) short answer on how analysts get paid to spout what is perceived to be worthless crap, then you may want to look at << LINK REMOVED >>.

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erencubu

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@wexorian ............. 1 day?

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erencubu

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@wexorian ................ what does economing mean?

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areszues92

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holy !@#$ half of them to korea...

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SirMordredX

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@severe_009 No offense, lol - but you're the kind of person they would have commited to an insane asylum to be exorcised by monks in the middle ages. DLC is on PC's as well - and episodic games have existed for ages. Remember a little game called Half Life 2? No?

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Transparanoia

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@wexorian ...what?

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severe_009

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Now their doing to PC gamers what other developers doing to the console gamers... Selling a whole game part by part... sigh...

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drokmore

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All this equals D3 not coming out for ages while they reap the money on SCII and WOW cataclysm, sigh...

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syam32245340

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this should be hot

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Zarzha

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@kwanzudood 1. Gamespot is the ones who are absolutely clueless about how well the game sells because press doesn't do any marketing research or interact with large sums of gaming community. 2. analysts' job is basically read as many articles as possible that are credible on the subject. Collect relevant numerical data and then make a prediction based on the data collected. 3. I have never heard anyone ask them to explain their process of analysis, guess what, no one cares. Do you ask your doctor how they come to the diagnosis and wait around for hours for him to explain? Most ppl just care about the diagnosis rather than the process, which is why it would be pointless to get the whole process written as news.

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kwanzudood

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How do analysts get paid to make these obvious predictions? Anybody could say the same crap they're saying, but Pachter and Crest are barely in the know with gaming news, when have they ever said anything profound? What kind of data inputs and inferences go into their forecasts? Why does the media not ask these questions of them instead of throwing up whatever they say on the internet?

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kkevguy47k

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@ wexorian When they say 6 million they mean throughout this year if you took the time to read the description of the article, no not even the article, just the description right above the headline in the bold font.

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daihideo

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Psh, I want to know how to become an analyst. I can make one random guess about how many games sell and get a paycheck. I am sold!!

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monson21502

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i might get shot for saying this. but damn that game looks stupid...

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wexorian

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this game is worth buyng 59$ stop economing, and stop bullsh... around that it's only it's starcraft and not stupid mw2 that is not worth 60$.

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zMd113

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I want it, but I don't know if my PC is powerful enough for it.

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Kenji_Masamune

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I'll wait until all 3 uh... parts are out. Hurry up with D3

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guitarist1980

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Oh and because of Battle.net I definatly see this game selling 5 million copies easily Before the end of the year.. as long as we are including the whole world.

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wexorian

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wowwww 1 day 6 million :OOO, and they will sale at end of week like 42 million copies? good job blizzard, now make Diablo 3

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guitarist1980

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I never played SC until I got a beta key, I played about 15 skirmishes, from knowing nothing about the game at all this game is actually easy to learn. I am beating the campaign on hard already. I get my royal butt handed to me when I play online. I only played 3 matches and lost all 3 by a long shot... this is easy to learn but clearly hard to master.