Analyst: Expect 'Six Straight Months Of Growth' For U.S. Game Retail

Analyst Todd Greenwald with Signal Hill said Thursday that U.S. video game retail sales are poised for "six straight months of growth," beginning with NPD Group's March sales results, releasing this evening. "We expect the year-on-year changes to improve dramatically," he said in an investor note. He expects that video game software sales will be up a modest 2 percent for March, marking the first year-on-year growth since September 2009. He added, "We expect this growth to come as a result of a stronger release slate, easier comps, and a larger console installed base, though it will be slightly held back by weaker software attach rates (especially on the Wii) and overall sluggish catalog sales." The monthly year-on-year comparisons should be relatively easy, Greenwald said, as the next six months saw double-digit declines in 2009. A strong release list is also a major growth factor in the months ahead. This year has already seen strong sales performances from titles including Electronic Arts' Mass Effect 2 and Battlefield 2, as well as Sony's God of War III. In the next three to four months, Greenwald notes the release of games including Splinter Cell Conviction, Red Dead Redemption, FIFA World Cup, Alan Wake, Prince of Persia, Super Mario Galaxy 2, Blur, Singularity, Metroid: Other M, Crackdown 2, StarCraft II, and later releases like Halo Reach and L.A. Noire. And that doesn't include any major titles to be announced at L.A-based E3 in June. Thanks to a strong release slate, Greenwald expects publishers to report results in-line with or better than expectations. Specifically, he said that "Activision remains very well positioned, despite unfortunate Infinity Ward situation," referring to the recent firing of the Activision-owned studio's two heads. Infinity Ward's Modern Warfare 2 downloadable map pack, the $15 Stimulus Package, has sold over 2.5 million units, Activision recently said. Subsidiary Blizzard is currently working towards a 2010 release of StarCraft II and the World of Warcraft expansion, Cataclysm.