January's game sales hurt by lack of major releases, says analyst

Ahead of the January 2011 NPD Group results later this week, Wedbush analyst Michael Pachter predicts that December's weak game sales at U.S. retail carried into last month, and expects that year-over-year software sales dropped by 12 percent to $505 million. Pachter partially blames the diminished sales on a lack of high-profile games released until the end of the month -- multiplatform games like Namco Bandai's SoulCalibur V and Square Enix's Final Fantasy XIII-2 both shipped on the last day of January. For comparison, January 2011's big titles included Electronic Arts' Dead Space 2 and Sony's LittleBigPlanet 2. For January 2012, Pachter forecasts that late 2011 games like Activision's Call of Duty: Modern Warfare 3 and Ubisoft's Just Dance 3 will be two biggest software titles, selling around 800,000 and 600,00 units respectively. Despite December's disappointing sales continuing into January, the analyst says major publishers will have "an opportunity to grow revenues by 10 percent or more annually for the next several years," and that software sales at retail will likely begin to see monthly growth in May, which will persist for several more months. On the hardware side, Pacther expects numbers for the month to drop, estimating sales of "175,000 Wii units (down 45 percent year-over-year), 390,000 Xbox 360 units (up 2 percent), 235,000 PS3 units (down 12 percent), 65,000 DS units (down 78 percent), and 215,000 3DS units." Overall, Wedbush predicts that January's total hardware sales will fall by 18 percent year-over-year, though it believes that they will jump back up once price cuts for the consoles, which the firm says are "showing signs of age," are implemented.