Lazard: June Software Sales To Rise 15-20 Percent

Ahead of the July 23rd release of June figures from NPD, Lazard Capital Markets' Colin Sebastian has said he expects the results will show a 15-20 percent increase in software sales, with Activision doubling year over year sales with the multiplatform release of Transformers. On the firm’s predictions for June software sales, Sebastian comments, “We estimate that software sales increased 15%-20% in seasonally slow June, which is higher than what we believe is the consensus expectation (+5%- 10%), as incremental sales of next-generation and handheld products offset declines in older-generation products.” “Our estimate is based on a “back of the envelope” analysis of sell-through, and is intended to provide a directional rather than point estimate. There was also a tough comparison from key titles last year, Cars and GTA: Liberty City,” he adds. Sebastian also anticipates that, given the popularity and continued relative scarcity of the Wii and DS hardware, it’s likely that Nintendo is “increasing hardware production in advance of the holiday period,” though he adds that both platforms “are likely to remain in short supply.” Looking at individual publishers, Sebastian said the group expects that Activision's sell-through for the month has doubled from the previous year on sales of titles such titles as the recent Transformers movie tie-in, as well as Spider-Man III and Guitar Hero II. In addition, Activision recently announced that its quarterly results would exceed previous guidance, to which Lazard responded by bolstering its fiscal Q1 predications for the company. Electronic Arts is predicted to see significantly lower sales for the period down 15-20 percent, with key release Harry Potter and the Order of the Phoenix reaching retail near the end of the month. The group notes that much of the focus on EA’s upcoming catalog has turned to recent and upcoming football releases NCAA Football 08 and Madden NFL 08, which Sebastian expects to be “significant contributors” to EA’s results for the second quarter and half of 2007. Finally, Sebastian said that THQ’s sales should be down as much as 50 percent from last year due to “a very difficult year-over-year comparison from the release of key Pixar-licensed title Cars.” He expects that the recently released Ratatouille will show as a top performer for the company for June, though its impact may be lessened given its release near the end of the month.