Analysts predict cold October for game industry
Wedbush Morgan's Michael Pachter and EEDAR's Jesse Divnich believe software fell 9 to 11 percent last month; Uncharted 2, Borderlands, Wii Fit Plus lead sales.
The NPD Group is expected to release its US retail sales report for the October 4-October 31 period this Thursday, and analysts are largely in agreement that September's meager 5 percent software sales growth won't be repeated. Today, Wedbush Morgan Securities' Michael Pachter and Electronic Entertainment Design and Research's Jesse Divnich delineated their October projections in more granular detail, saying software sales will dip 9 to 11 percent on the month.
Pachter offered the slightly more optimistic prediction, prognosticating October software sales at $697 million. Top sellers for the month, according to the analyst, were Wii Fit Plus (400,000 units), Brutal Legend (300,000 units), DJ Hero (150,000 units), Borderlands (400,000 units), Uncharted 2, and Ratchet & Clank: A Crack in Time. Pachter did not offer an estimate on Uncharted 2 and Ratchet & Clank sales, because Wedbush Morgan does not provide analyst coverage of Sony Computer Entertainment.
On the hardware side, Pachter believes the Wii sold 555,000 units, down 31 percent from a year ago, while the Xbox 360 sold 340,000 units, an 8 percent drop. The only console to see year-over-year gains, he predicts, was the PlayStation 3, with sales doubling to 380,000 units.
EEDAR's Jesse Divnich believes software sales came in at $620 million during the October period, with 27 titles selling more than 100,000 units. Sony's highly regarded Uncharted 2 captured the top slot in the sales chart, according to his analysis, selling 601,000 units in the US since its October 13 launch. Divnich believes Nintendo's perennial top sellers Wii Fit Plus and Wii Sports Resort fell in at second and third, with respective 450,000-unit and 325,000-unit finishes.
Descending down the chart, Divnich believes the Xbox 360 editions of Borderlands, Halo 3: ODST, Brutal Legend, and NBA 2K10 occupied slots four through seven, selling 300,000, 290,000, 200,000, and 200,000 units, respectively. Also at 200,000 units, according to Divnich, was Mario & Sonic at the Olympic Winter Games for the Wii, with Microsoft's Forza Motorsport 3 and the original Wii Fit following at 190,000 and 175,000 units, respectively.
Divnich took particular interest in Atlus' PS3-exclusive Demon's Souls, which he sees as an interesting case study for high-quality games that don't benefit from a large publisher's marketing budget. Released in the US for the PS3 on October 6, the game went on to secure high critical praise.
"Demon's Souls is probably one of the most statistically relevant games released in the gaming world as it helps answer an often asked question: how much would a high quality game sell if it was supported by no mass marketing, released by a little known publisher (no offense to Atlus), and was a new intellectual property," he said. "The answer is, about 30 percent less than the average in the Action/RPG genres." Divnich believes Demon's Souls will sell 100,000 units in October and 250,000 copies by the end of the year.
Looking to hardware, Divnich believes the Wii demand has dipped 21 percent from a year ago, falling to 635,000 units. The Xbox 360 also saw weakening sales compared to a year ago, the analyst projects, falling nearly 25 percent to 280,000. And, like Pachter, Divnich thinks the PS3 saw a substantial boost during the period, rising 68 percent to 320,000 units in October. He also pegged DS sales at 450,000 units, with PSP units coming in at 150,000.
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