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Analysts point to weak October NPD numbers

Prognosticators point to disappointing October showings from NBA Jam, EA MMA, Shaun White Skateboarding, and Wii Party.


Last week, Pacific Crest Securities analyst Evan Wilson predicted the industry-tracking NPD Group's October US retail sales figures would show software sales grew 15 percent year-over-year. The NPD Group released the actual figures yesterday, putting the growth closer to 6 percent.


Today, a number of analysts--Wilson included--circulated notes to investors offering their takes on what did and didn't live up to expectations. While NBA 2K11 and Fallout: New Vegas both exceeded Wilson's expectations, many of the month's other high-profile games did not. In particular, Wilson called NBA Jam for the Wii and EA MMA "dismal failures so far." According to analyst notes, neither game broke the 50,000-sold mark.

Wilson wasn't the only analyst whose expectations proved too high. In his own note to investors, Wedbush Morgan analyst Michael Pachter said Kirby's Epic Yarn was slightly off his estimate of 100,000 units, while Wii Party fell further short of his 150,000 projection. While Wilson didn't weigh in on those games in particular, he did note Nintendo first-party sales combined to bring in 44 percent less revenue than in the previous October (with similar declines expected in November and December).

While analysts have harped on the ongoing decline in music games, another genre appears to be suffering similarly steep shortfalls. Tony Hawk: Shred made its debut last month to sales of 3,000 copies, down from roughly 114,000 copies sold by Tony Hawk: Ride upon its debut last year. Ubisoft's Shaun White Skateboarding didn't fare too much better, as Pachter pegged it at fewer than 6,000 copies for the month. The last multiplatform Shaun White title, Shaun White's Snowboarding in 2008, sold 259,000 copies in the US in its first two weeks on sale. (Shaun White Snowboarding: World Stage was released exclusively on the Wii in 2009.)

The October sales figures also caused the analysts to reassess their previous expectations for the year. Wilson said he now expects November sales to be flat year-over-year, whereas before he allowed for them to potentially be up slightly. For his part, Pachter had expected software sales to be down for October, so he actually came away from the NPD data more upbeat about the industry. He still expects "flattish" software sales through March, but he believes shrinking software sales in 2009 and 2010 leave 2011 in a good position to show modest growth for the industry.

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