Wedbush Morgan Predicts Increase in January Game Sales

Though Wedbush Morgan Securities analyst Michael Pachter earlier predicted an overall downturn of 3% for North American video game sales in 2006, due to the console transition period, Pachter released an investor memo today indicating that U.S. January game sales may have actually improved by the barest of margins in year-over-year comparisons. According to Pachter, sales for the month were around $380 million, marking an increase of 1% over January 2006. Lest investors get too excited, however, Pachter cautioned them: "After recent earnings announcements, we think that reaction to the January sales data will be muted, particularly if the numbers reveal flat to positive growth." The analyst tempers this statement by noting that January is a relatively light month for software sales in any case. The expected downturn and predicted upswing both arose from the same source, Microsoft's Xbox 360. Sales of the new console and its software is so far managing to make up for the lack of interest in current-generation games, which continues along the trend established during the 2005 holiday season. Also helping were high consumer interest in PlayStation Portable and Nintendo DS games, both of which systems are beginning to mature. Non-handheld sales, according to Pachter, are coming mostly from continued support from holiday titles; specific games mentioned by the analyst were Need for Speed: Most Wanted, Star Wars Battlefront II, Madden NFL 06, Call of Duty 2: Big Red One, and WWE SmackDown! vs. Raw, and the newly released MVP 06 NCAA Baseball.