Analysts predict June gloom for games

Predictions for NPD figures peg sales down from 2005; industry turnaround expected later this year.


Later this week, the industry-tracking NPD Group is expected to release retail sales figures for the month of June, and a pair of industry analysts say it won't be good news.

While April game sales were up 16 percent from the year before, the first time in months the industry had posted a year-over-year gain, May's 10 percent drop in sales put an end to the notion that the transition-year slump was over with. Wedbush Morgan Securities' Michael Pachter and Lazard Capital Markets' Colin Sebastian predict the downward trend continued in June. Today the pair separately released their expectations for NPD's June figures, with Pachter pegging the industry as sliding 4 percent compared to June 2005, and Sebastian predicting a more precipitous drop of 10-15 percent.

Pachter estimated what he terms "next-generation systems"--Xbox 360, PSP, and DS--would rake in $120 million, an increase of $76 million from June 2005, but that those gains would be offset and then some by the declining current-generation market. Pachter's expected $250 million in current-gen sales is $92 million less than last year's tally.

For the coming months, Sebastian predicted mixed results for the industry throughout the summer before sustained growth is achieved later in the year. Pachter's expectations were much the same, though he pegged September as the specific month when sales would begin to rebound.

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