March extends sales slump - Analysts

Trio of industry watchers projects 5-10% software decline; Sebastian says 3DS demand experienced rapid drop-off.


NPD may no longer want analysts to disseminate its official US sales figures every month, but that isn't stopping industry watchers from laying out their predictions. With the industry-tracking body prepared to announce its US retail accounting for March on Thursday, a handful of analysts have issued dour projections for the industry.

Nintendo's perennial chart topper is expected to top March's charts.
Nintendo's perennial chart topper is expected to top March's charts.

Wedbush's Michael Pachter believes software sales were down 8 percent in March to $805 million. The fourth consecutive month of software sales declines comes despite strong performances from Nintendo's Pokemon Black and White, which combined to sell more than 1.4 million units, according to Pachter.

The analyst also believes Electronic Arts had a good month, forecasting Crysis 2 and Dragon Age II to have sold 400,000 units each. Pachter was also positive on Homefront, which he believes sold 700,000 units during the month.

Still, these performances were not enough to offset last year's comparison against Final Fantasy XIII, God of War III, and Battlefield: Bad Company 2, Pachter noted. He also attributed the decline to the Easter holiday, which falls in late April this year.

On the hardware front, Pachter believes 500,000 3DSs were sold during its debut month, largely on the back of strong preorders. That figure just bests the Xbox 360's projected performance of 480,000 units. Pachter expects the Wii to sell 410,000 units, while the PlayStation 3 could sell 380,000 units.

Lazard Capital Markets' Colin Sebastian also touched upon the 3DS's launch in his own note to investors. Though he did not provide a unit-sales estimate, Sebastian did say that his checks with retailers indicate the 3DS's sales have "slowed considerably since the initial launch window," when the device set handheld sales records for Nintendo.

Sebastian also believes that software sales were down 10 percent during the month. As with Pachter, he believes March's sales faced a difficult comparison against last year, aided not at all by the late Easter shopping holiday.

Cowen and Company's Doug Creutz offered the rosiest picture of March, though he, too, believes the month saw sales declines. According to Creutz's analysis, the console and handheld software industry was down 5 percent year-over-year, although sales would be relatively flat were it not for Easter's late arrival.

Creutz was also more optimistic on the performance of the 3DS. He believes Nintendo's new platform sold 750,000 units following its debut in the US.

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