Gloomy July sales forecast makes 5th declining month
Ahead of the official sales figures for July, analysts are predicting yet another wave of bad data.
Should these forecasts hold true, July would represent the fifth consecutive month sales have contracted for the video game industry.
If there is a bright side to this latest bit of financial trouble, it is that most are anticipating that last month's data will not be as harsh as June's when the industry suffered a 31 percent drop in sales, the largest decrease in over nine years.
According to Wedbush Morgan analyst Michael Pachter, flaccid software sales will continue to be a drag on the industry. He is predicting that this sector will see a drop of 16 percent for the month, bringing the total figure down to $500 million.
On the hardware side of things, Pachter is speculating that sales of Nintendo's Wii and handheld DS will also decrease, with the former selling 305,000 units and the latter accounting for 590,000 pieces.
This is bad news for Nintendo as sales of the Wii are already down by 13 percent for the year. He also states that this trend will continue, "Until the company either changes its bundle or lowers price."
Unfortunately, the news is not much better for the Kyoto-based company's two chief rivals.
He is also predicting that sales of Microsoft's Xbox 360 and Sony's PS3 will continue to sag, accounting for only 190,000 units and 135,000 units sold for the month respectively.
EEDAR's Jesse Divnich also joined Pachter in his assessment that the industry will continue its downward fall.
However, while Divnich ultimately expects software sales for 2009 to fall flat, he -- like many others -- believes that the current economic crisis is but one of several factors affecting the industry.
He said, "these downgrades are not the result of the recession impacting the industry more than EEDAR has anticipated; rather, our downgrade is purely the result of key titles being pushed out of the 2009 calendar year."
Divnich said "Most assume that the expected revenue from a delayed title will redistribute itself to others. This is certainly not the case, especially for titles like 'BioShock 2' and 'Splinter Cell,' which both have a strong cult following."
The good news is that with several blockbuster titles slated for release in the coming months, the industry may be poised for a rebound.
Pachter stated that, "the game release schedule improves substantially in August, with expected contribution from 'G.I. Joe,' 'Wolfenstein' and 'Batman Arkham Asylum.' While it is too early to be certain that sales will be positive in August, we expect an improvement to mid-single digit negative results at worst. In September, we expect new releases 'Beatles Rock Band,' 'Halo ODST,' 'Need for Speed Shift,' 'Guitar Hero 5' and 'Marvel Ultimate Alliance' to drive sales growth back into the solid double-digits, with sales growth of 30 percent or more expected."
