More dire March predictions

Lazard Capital Markets' Colin Sebastian expects US game sales to be down 20 percent from the year before, warns of more volatility ahead.


On Monday, Wedbush Morgan analyst Michael Pachter predicted a drop of 18 percent in US game sales. Today, one of his colleagues came out with an estimate that undercut even that drop.

Lazard Capital Markets' Colin Sebastian today issued a note to investors predicting that industry-tracking NPD Group's March numbers (expected to be released on Monday) will show sales 20 percent lower than the year before. In his analysis, Sebastian notes a number of factors that played into his assessment.

On a general scale, he blames a "challenging retail environment," and points out that the numbers from March of 2005 were a difficult act to follow (up 31 percent from the year before). As for specific reasons for the drop, he points to declining sales on current-generation consoles, ongoing Xbox 360 hardware shortages, having to compete with the PSP launch the year before, the sliding of the Easter holiday from March to April, and the lack of new baseball games.

While Take-Two and Electronic Arts' March 2005 baseball releases sold more than 900,000 copies in the month of their release, those publishers warmed the bench this time around. Sony's MLB '06: The Show was the only baseball slugger to debut at retail this March. Take-Two currently has third-party exclusivity on the MLB license, and didn't release its Major League Baseball 2K6 games until this month.

As for what succeeded at retail, Sebastian says top-selling new releases included Tom Clancy's Ghost Recon Advanced Warfighter, The Godfather, The Elder Scrolls IV: Oblivion, and Kingdom Hearts II. EA's Black, released at the very end of February, also posted strong sales, according to Sebastian.

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