A few weeks ago, EA CEO John Riccitiello talked about the weaker sales for Madden NFL 2010, and he noted that EA's hopeful sales would pick up as consumers head to stores to purchase new consoles, following the price drops. Sales for Madden were tracking behind by about 19% in terms of units, and investors reacted causing a 25% dip in the publisher's stock price.
According to the latest channel checks from Sterne Agee analyst Arvind Bhatia, it appears Riccitiello's optimism was warranted. Sales are faring better now, thanks in part to the increased store traffic from the console price cuts. "We believe sales of ERTS’s Madden NFL 2010 have
rebounded meaningfully in the month of September. Combining August and September, we believe sales of Madden are now down an estimated 5% to 10% after being down 19% in August," said Bhatia.
Bhatia also checked on another important release for EA: Need for Speed: Shift, which appears to be doing pretty well compared to last year's edition. The game is "currently tracking flattish year-over-year, which is impressive given timing differences. Full Year sales could be up 10% to 20%," he noted. "Last year, Need for Speed: Undercover was released in mid-November whereas this year’s title, Need for Speed: Shift, was released in September i.e., it did not benefit from holiday shopping like last year. Still, our checks show sell through is tracking flattish year-over-year so far. We attribute this to 1) strong ratings for this year’s title and 2) recent hardware price cuts. The 360 and PS3 versions of the title garnered ratings of ~84% this year versus 64% last year. Based on current trends, we believe the full year sales for this title could be up 10% to 20% year-over-year. For perspective, EA sold 5.2M units of Need for Speed: Undercover last year (down 7% y-o-y)."
September, overall, could finally mark the beginning of a nice resurgence in the industry after five consecutive months of decline. Bhatia said that in addition to the two EA titles, Halo: ODST, Marvel Ultimate Alliance 2 and Scribblenauts are all ahead of expectations. Software sales for September could be up 5-10% (versus -6% last year) with "some chance for upside," said Bhatia.
