May 2007 Video Game Sales Preview: Expect Sales decrease of 5,5%
We expect May U.S. retail video game console hardware sales to be released after market close on Thursday, June 14th. We forecast total hardware sales of 1,475,000 units, up 52,1% compared to last years 970,000 units. The increase is largely due to the tripled sales of the Nintendo DS portable video game system and the introduction of the Nintendo Wii.
Our estimate reflects 1,200,000 units in sales contribution from new platforms (PLAYSTATION 3, Nintendo Wii, XBOX360, Playstation Portable and Nintendo DS), representing year-over-year growth of 673,000 units, or 127,7%. Again as a result of the introduction of new platforms and the sales increase of Nintendo DS consoles. We expect current generation hardware sales of 275,000 units, reflecting a year-over-year decrease of 168,000 units, or 38%. The drop is due to the non-existent sales of XBOX hardware and the huge year-over-year drop in sales of Nintendo GameCube, which both, unlike the PS2, have no 3rd or even 1st party software in the foreseeable future and beyond.
Our forecast presumes sell through of 77,000 PS3, down from last months 82,000, a decrease of 6,1%. Even though Target is discontinuing the GBA portable video game system, and thus the PS3 finally catching a break, we expect that the effects of this won't be noticeable until next months NPD-figures (if at all noticeable). The Nintendo Wii had a sell through of 339,000 units, down 21,000 from last month, or 5,8%. The prediction for the Nintendo Wii is based on lower than usual sales in Japan, most probably due to the launch of Mario Strikers Charged in Europe. We expect more Nintendo Wii hardware systems allocated to the European market and less to the Japanese and North American markets. Although some would think otherwise.
Our overall estimates assume PS2 hardware sales of 185,000, a year-over-year decrease of 47,000, or 20,3%. Despite this fact we expect PS2 sales to continue to be strong this whole year, most probably outselling the PS3 if Sony (Sony Corp, NYSE: SNE: 54.70) doesn't drop that price like it's hot or until system selling games don't appear for it.
We expect May software sales to be driven by continued strong sales of Nintendo's (Nintendo Co., Ltd (ADR), OTC:NTDOY 43.60) Pokemon Diamond and Pearl, Super Paper Mario, Wii Play and a new release for it's Nintendo Wii video game system, Mario Party 8. In the Top 10 we also expect to see Forza 2, a new title for Microsoft's (Microsoft Corp., NASDAQ: MSFT: 30.05) XBOX360. Guitar Hero II from Activision (Activision, Inc., NASDAQ: ATVI: 18.53) is still in the top ten along with Crackdown and Command and Conquer 3. We note that 9 games sold over 100,000 units in March, and we expect all of the top ten games of this month to sell over that number.