Xbox 360, Kinect buoy December sales - Analysts

Pachter pegs Microsoft add-on sales at 3 million last month, console outsold Sony's 2 to 1; Wilson thinks software continued to lag.


2010 has been a difficult year for the gaming industry, and depending on which analyst has the podium, the 365-day period ended anywhere from slight gains to double-digit losses. However, even if the industry as a whole had little to boast of, a handful of the biggest players managed a wholly respectable holiday.

The industry has its (bionic) eye affixed on Kinect sales.
The industry has its (bionic) eye affixed on Kinect sales.

In a note to investors today, Wedbush Morgan analyst Michael Pachter offered a cheery projection of December sales, which were led on the hardware side by Microsoft's Xbox 360 and its newly introduced motion-sensing add-on, the Kinect. According to the analyst, the Xbox 360 was the only console to achieve year-over-year sales gains during the period, with Xbox 360 sales rising 91 percent to 2.5 million units during the period.

According to Pachter's estimates, Xbox 360 sales came in just behind Nintendo's Wii, sales of which he believes declined 32 percent to 2.6 million. The PlayStation 3 also saw sales slip from last year, Pachter believes, falling 12 percent to 1.2 million. Pachter believes overall console hardware sales slipped 3 percent, while handheld system sales slipped 24 percent.

Pachter also offered his forecast for accessory sales, which he believes were led by the Kinect. With Microsoft having announced as part of its CES 2011 keynote address that the peripheral had shipped 8 million units worldwide last year, Pachter believes that the actual sell-through figure stood at 7.2 million units worldwide. Of that tally, he believes 3 million Kinects were sold as part of console bundles, 1.8 million of which were picked up by US gamers. He believes an additional 1.2 million stand-alone Kinect units were sold in the US in December.

Turning to software, Pachter believes sales came in at $2.63 million during the period, up 2 percent from the same period in 2009. However, Pachter cautioned that the month's software sales were particularly difficult to estimate due to the Kinect's "surprisingly high volumes," which may have dried up consumers' wallets.

The Wedbush analyst predicted billion-dollar earner Call of Duty: Black Ops added another 3 million units to its total sales tally during December. Other top performers, according to Pachter, were Just Dance 2 (1.3 million), Madden NFL 11 (900,000), Assassin's Creed: Brotherhood (900,000), Donkey Kong Country Returns (700,000), and Need for Speed: Hot Pursuit (500,000).

Pachter's software predictions could be considered rosy when matched up to Evan Wilson's. According to the Pacific Crest Securities analyst, software sales slipped 10 percent to $2.32 billion in December, due to tough comparisons against last year's Wii lineup as well as continued industry weakness outside of Black Ops.

Wilson noted that while the Kinect had a solid year-end, software sales aren't likely to see a bump until 2011. "In November, Kinect software was only 4 percent of the industry due to a small tie ratio, in part because the hardware comes with a game," he said. "However, given hardware sales and a slate that should improve, software will be more influential once we move into 2011."

On the console front, Wilson predicted that the Xbox 360 may have its best month in the US ever, thanks to heavy promotion from Microsoft and the introduction of the Kinect. However, again, Wilson does not see this impacting software sales for the console, as the bulk of new hardware sales were from existing customers.

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