Analysts: NPD Highlights Continued PS2 Strength, PS3 Lags

Following yesterday's U.S. sales report from NPD, Wedbush Morgan's Michael Pachter and simExchange's Jesse Divnich have commented on still surprisingly strong PS2 sales, as well as continued troubles for third parties due to the PS3's relatively small installed base. "PS2 software sales were down only 22% year-over-year (compared to our -41% estimate)," said Pachter, "suggesting that relative strength on this platform may be sustainable into early 2008. For 2007, PS2 software sales declined by 24%, and we expect PS2 software sales to decline by 42% in 2008, with growth of next generation software more than offsetting the decline." SimExchange's Divnich also noted that "despite being a legacy system and often over-looked in the press, the PS2 still managed to give us two of the top ten software titles in December (Guitar Hero III and Madden 2008)." "Besides being for the PS2, both of the titles are also popular among casual gamers, a clear indication that there is still tremendous growth potential in the casual sector for the next-generation systems," he added. Divnich said that predicting precisely what is holding consumers back from making the next-gen leap is difficult, but said "console manufacturers must make 2008 one of their most aggressive years as 2008’s momentum will likely indicate the 'true' console war winner." The Wii, he offered, needs to bring an end to its supply issues, the Xbox 360 should continue to focus on the benefits of Live and its console exclusives, and Sony, he says, needs to continue to aggressively cut prices. On the last point especially, some PS3 software sales figures exclusive to simExchange highlight the problems third party publishers are having on the system, as Valve's Orange Box shifted only 56,600 units for the PS3 in December, and Sierra's Timeshift moved only 25,000. "We do expect this to be a short-term phenomenon as the PS3’s install base continues to grow and becomes capable of supporting more than one title in the same genre in the future," Divnich offered, saying Metal Gear Solid 4 and Grand Theft Auto IV should help turn those fortunes. SimExchange's report also offered figures for the following titles outside the top 10, showing a somewhat more respectable showing for Uncharted, and relatively low sales for Sega's Nights return: Mass Effect (Xbox 360) - 401,000 Mario Party DS (DS) - 385,700 Uncharted: Drake's Fortune (PS3) - 206,000 Resident Evil: The Umbrella Chronicles (Wii) - 147,600 Final Fantasy XII: Revenant Wings (DS) - 117,200 Half-Life 2: The Orange Box (PS3) - 56,500 Nights: Journey of Dreams (Wii) - 60,800 TimeShift (PS3) - 25,000 The PS3's future might also be aided by recent victories in the Blu-ray/HD-DVD battle, with Pachter concluding, "We think that the Blu-ray format will prevail over the rival HD-DVD format, and think that Sony will emphasize that point in PS3 advertising later this year, ultimately driving sales higher."