Video-game sales expected to bounce back
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(EDITORS: This story may not be used on your Web site unless also published in your print edition)
By Dan Gallagher
MarketWatch
(MCT)
NEW YORK — The video-game industry is expected to post another weak month when sales data for October are released Thursday, as publishers face difficult comparisons as well as weaker-than-expected sales of some key game titles.
The NPD Group will release sales data for October late Thursday afternoon. Analysts on average are expecting sales to decline about 11 percent from the same month last year, according to a tabulation of estimates by MarketWatch.
Investors have put pressure on the video-game sector since the industry reported disappointing sales numbers for September, which was supposed to be the first month of recovery following a six-month decline. Sales showed a slight gain for the month, but came in well below Wall Street's estimates.
Most game publishers have seen their market values slide over the last month since that report, as investors have worried about the outlook for the crucial holiday shopping season.
"Last October featured the launches of 'Guitar Hero: World Tour,' 'Fable 2,' and 'Fallout 3,' making for a challenging comp this year, given a release slate featuring more new IP (intellectual property) than established franchise hits," Doug Creutz of Cowen & Co. wrote in a note to clients on Monday.
By comparison, this October saw the release of new games such as "Brutal Legend" from Electronic Arts Inc., "DJ Hero" from Activision Blizzard Inc. and "Borderlands" from Take-Two Interactive Software Inc.
Among known game franchises, the biggest release was "WWE SmackDown vs. Raw 2010" from THQ Inc.
One potential boost for the sector may come from price cuts on the game consoles. The PlayStation 3, Microsoft's Xbox 360 and Nintendo Wii all saw their prices cut back in September. This caused a jump in console sales for that month.
Sony Corp.'s PS3 may get a boost from the release of exclusive game titles "Uncharted 2: Among Thieves" and "Ratchet & Clank: A Crack in Time." ''Uncharted 2" has garnered a Metacritic score of 96 — the second highest rating for any game title on the PS3 console.
Justin Post of Bank of America says the October sales data will likely reflect "a weak casual consumer market (making fewer repeat purchases, especially on Wii), a still sluggish hardware market (not seeing full benefit from price cuts), and a cautious retail environment (retailers carrying less inventory)."
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(c) 2009, MarketWatch.com Inc.
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Distributed by McClatchy-Tribune Information Services.
