After two down months (March, April) in the U.S. video game industry, analysts are projecting a double-digit decline for May. NPD is expected to release its May sales data this Thursday. Jesse Divnich of EEDAR has forecast May software sales of $457 million (down 15%) while Wedbush Morgan's Michael Pachter has predicted a slightly steeper drop (17%) to $450 million.
Pachter noted that May sales face a tough comparison to last year when the launch of Nintendo’s Wii Fit and sales of Take-Two’s Grand Theft Auto IV contributed $141 million and 26% of May 2008 total sales. May software was likely driven by X-Men Origins: Wolverine, Punch-Out!!, EA Sports Active, UFC 2009 Undisputed, Infamous and continued sales of Wii Fit.
In terms of hardware, Pachter is anticipating big declines (50% year-over-year) across the board, with a forecast for just 300,000 Wiis, 140,000 Xbox 360s and 100,000 PS3s. If this forecast proves true, console hardware sales through May would actually be down four percent for 2009. Pachter said this would then “pressure software sales growth over the next 12 months, and may force the console manufacturers to consider a price cut before year-end.”
He added that he expects Sony to cut price in the fall and Microsoft to follow soon thereafter, which gives him “confidence that U.S. software sales will grow later in the year, notwithstanding relatively negative sales in the early part of the year.”
The industry is clearly anticipating price cuts for all hardware to help stimulate growth in 2009, especially with Sony's PS3. Frankly, IndustryGamers would be shocked if we didn't see some price drops by this fall. The Tokyo Game Show might be an opportune time for Sony Japan to take $100 off the MSRP.
2 Comments
June 9, 2009
Patcher's predictions about price cuts are welcome, but isn't he the guy who predicted Playstation 3 price cuts "within the first months of 2009", and then "by April or E3 at the latest"? I think he should stop taking about price cuts, especially PS3 price cuts, and focus on something he can be sucessful with.
Sorry for being mean, but I am a potential PS3 buyer and I have been delaying my buy because of Mr. Patcher's comments. Obviously the price cut has not happened AND I don't have a PS3 (lol).
Anyway, the sitation with the gaming indistry is bad, as the article states, and it has been proven that the gaming indistry is not "ressession proof". Hopefully better days for the indistry is ahead of us!
June 9, 2009
better days ARE ahead of us (sorry for the mistake)