Analyst: 'Industry Sales Will Rebound In 2010,' Hardware Will Decline

After a declining 2009, retail video game "industry sales will rebound in 2010" on the strength of the software market, while hardware sales will fall, according to expectations by Wedbush analyst Michael Pachter. The retail game industry-centric Pachter discussed his projections for the coming year in a research note on game retailer GameStop, whose stock the analyst pegged as likely to meet the company's own guidance figures. "GameStop is well-positioned to reap the rewards" of growing game sales thanks to its 30 percent software market share Pachter said, while its smaller 12 percent hardware market share will largely insulate it from expected declines in that area. Games like Splinter: Cell Conviction, Army of Two: The 40th Day, BioShock 2, and Gran Turismo 5 will be among the first quarter's "long-awaited slate of games" that is likely to kick off a strong year for software. And when GameStop reports its holiday season sales later this week, Pachter expects the company to "report solid sales in a weak environment." He believes the specialty retail giant will post a four percent year-over-year software sales increase in November, and a four to five percent year-over-year software sales decline in December -- outperforming the industry's predicted 13 percent year-over-year decline. (However, used game sales are included in GameStop's totals.)