Analysts: September PS3 sales 'dismal'

Reaction to NPD report finds industry watchers sullen about Sony's console; Halo 3 accused of cannibalizing sales.

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The biggest news to come out of the industry-tracking NPD Group's September US retail sales figures yesterday was that Halo 3 sold 3.3 million copies and helped push Xbox 360 hardware sales in a big way. Today, a handful of industry analysts added a bit more shading to the story with their own interpretations of the numbers.

Jesse Divnich, analyst for the gaming-prediction market simExchange, accused Halo 3's blockbuster sales of cannibalizing the market.

"The most curious result was that all other games severely underperformed the prediction market's expectations, indicating that Halo 3 had a substantial negative effect on other major titles across the board," Divnich said. "Games that were especially impacted were the Xbox 360 games Stranglehold, BioShock, and Madden NFL 08."

Despite Halo 3's taste for its own kind, Nollenberger Capital Partners' Todd Greenwald and Wedbush Morgan Securities' Michael Pachter both saw longer-term gains as a result of the shooter's success. Greenwald called the Halo 3-spurred boost to Xbox 360 hardware sales a "best-case scenario" for publishers.

"While the success of the Wii has been great for the industry, ultimately Nintendo, and not publishers, is the prime beneficiary," Greenwald said. "It is more advantageous for third-party publishers that the Xbox 360 and PS3 grow their installed bases."

Pachter also expects the hardware boost to pay short-term dividends.

"Although sales of Halo 3 accounted for all (and then some) of the growth during the month, the game clearly drove hardware sales that will position the industry for even greater sales in November and December, when many Halo players will be ready for a new challenge," Pachter wrote.

Analysts were particularly downbeat about the performance of the PlayStation 3, with both Greenwald and Pacific Crest Securities describing the system's hardware sales of 119,000 as "dismal."

"We expect similar (dismal) results in October for PS3 hardware units as a result of Sony's low-end price reduction to $399, which does not go in effect until the last two days of the October NPD period," Wilson wrote.

Sony's 40GB PS3 is scheduled to go on sale in the US on November 2, whereas the $100 price cut on the 80GB model is already in effect.

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