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March Video Game Sales Predicted to Drop 18%

by Rainier on April 10, 2006 @ 7:59 p.m. PDT

Analysts Michael Pachter and Edward Woo from investment house Wedbush Morgan Securities have released their NPD preview for the month of March. Woo and Pachter predict that the console transition continues to wear on publishers, as they expect console video game sales to drop 18% compared to the same period last year

The estimate also reflects $122 million in sales contribution from new platforms (Xbox 360, PSP and DS) representing year-over-year growth of $58 million (the PSP and DS were available last March), which was unfortunately more than offset by a steeper decline in sales of current generation software (-33% or $157 million).

March game sales are predicted to have been driven by Square Enix's Kingdom Hearts II (PS2), Take-Two's The Elder Scrolls IV: Oblivion (PC, 360), Electronic Arts' The Godfather (PS2, Xbox, PC) and catalog sales of EA's Fight Night Round 3 and Black. 14 games are expected to have sold more than 100,000 units in March (compared to 19 last year).

Looking ahead, WMS believes that there will be "a modest rebound" in April (thanks to easier comps and renewed supply of Xbox 360 hardware); that said, WMS expects the overall industry sales to be down approximately 10% for the first half of 2006.

"After April, we expect monthly next generation software sales to remain fairly stable at around $100 - 150 million through October (representing year-over-year growth of $80 - 130 million), with declines of current generation software sales expected to remain at around $130 - 150 million monthly," wrote analyst Michael Pachter. "We expect relatively flat sales through the summer months, with potentially robust sales in November and December, once next generation consoles from Sony and Nintendo are launched."

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