sonycowboy
Member
November 2006 Video Game Sales Preview: Expect 12% Sales Growth
We expect November U.S. retail video game console software sales data to be released after market close on Thursday, December 7. We forecast sales of $785 million, up 12% compared to last year.
Though share prices for most publishers have increased over the past several months, we expect continued modest share appreciation in December, due to the relatively easy monthly sales comparison, with volatility decreasing now that the PS3 and Wii have both launched.
Our estimate reflects $345 million in sales contribution from new platforms (PS3, Wii, 360, PSP and DS), representing year-over-year growth of $196 million, or 131%. We expect current generation software sales of $440 million, reflecting year-over-year decrease of $112 million (-20%). There may be upside to our $125 million estimate for Xbox 360 software sales, particularly if titles like Gears of War sold through more rapidly than we modeled. There may be some downside to our initial estimate of $100 million in combined software sales for the PS3 and the Wii, particularly if the eBay effect (hardware units sold for resale without accompanying software sales) was as pronounced as the media has speculated.
Sales growth over the last five months has averaged a robust 16%, and we continue to believe that moderate declines in current generation software sales will persist through March, and will be more than offset by contribution from next generation software sales. PS3 and Wii software sales are expected to contribute $576 million to overall sales growth for the year, helping to drive our estimate for overall 2006 U.S. sales to be at least 4% higher than 2005 levels.
We expect NPD U.S. retail video game console software sales data for the month of November (four-week period ending November 25, 2006) to be released on Thursday, December 7, after the market close. Our forecast is based upon a combination of channel checks, company press releases and intuition, with the greatest dependence upon intuition. Our channel checks are conducted by visiting a very small slice of the over 25,000 retail stores that carry video games in the U.S. We note that for a given game, a difference of only one unit per store per week could result in a difference of 100,000 units in volume, or $3 6 million in retail sales for the month. Therefore, we caution investors to use our estimates as only one data point in a sea of information.
We expect November sales of $785 million (up 12% compared to November 2005s $702 million). Our estimate reflects a decline of $112 million in current generation software sales (PS2, Xbox, GC, GBA), more than offset by an increase of $196 million in next generation software sales (PS3, Wii, 360, PSP and DS). Overall, we expect next generation software sales of $345 million and current-generation software sales of $440 million. Due to relatively light supply of next generation PS3 and Wii consoles, we do not expect next generation software sales to be greater than current generation sales in November or December.
We expect November sales to be driven by new releases Nintendos The Legend of Zelda: Twilight Princess (Wii), Square Enixs Final Fantasy XII (PS2), Microsofts Gears of War (360), Take-Twos GTA: Vice City Stories (PSP), Electronic Arts Need for Speed Carbon (360, PS2, Xbox, PC, PSP, GBA, DS, GC, PS3, Wii), Activisions Call of Duty 3 (PS2, 360, PS3, Xbox, Wii) and Guitar Hero II (PS2), and THQs WWE SmackDown vs. Raw 2007 (PS2, 360), along with a slew of launch title games for the PS3 and Wii. We note that 13 games sold over 100,000 units in October, and we expect 23 in November (compared to 21 last year).
We believe that the recent sales strength on current generation platforms will continue through at least March, given strong sell-through performance over the past five months and negative comparisons for the next five months. Consumers appear willing to purchase compelling content for current generation consoles in spite of the recent launches of the unobtainable PS3 and Wii. Through October, NPD data shows that Xbox 360 hardware sales in the U.S. were 2.9 million units, averaging approximately 250,000 units monthly for the last six months. We expect sales of 750,000 Xbox 360 hardware units in November, and between 1.5 2 million units in December. Sell through of Xbox 360 hardware could be higher if the supply situation for the PS3 continues to lag Sonys promised 1.2 million units by year end, with many holiday gift givers likely substituting purchases of the 360 in place of the PS3.
We expect November U.S. retail video game console software sales data to be released after market close on Thursday, December 7. We forecast sales of $785 million, up 12% compared to last year.
Though share prices for most publishers have increased over the past several months, we expect continued modest share appreciation in December, due to the relatively easy monthly sales comparison, with volatility decreasing now that the PS3 and Wii have both launched.
Our estimate reflects $345 million in sales contribution from new platforms (PS3, Wii, 360, PSP and DS), representing year-over-year growth of $196 million, or 131%. We expect current generation software sales of $440 million, reflecting year-over-year decrease of $112 million (-20%). There may be upside to our $125 million estimate for Xbox 360 software sales, particularly if titles like Gears of War sold through more rapidly than we modeled. There may be some downside to our initial estimate of $100 million in combined software sales for the PS3 and the Wii, particularly if the eBay effect (hardware units sold for resale without accompanying software sales) was as pronounced as the media has speculated.
Sales growth over the last five months has averaged a robust 16%, and we continue to believe that moderate declines in current generation software sales will persist through March, and will be more than offset by contribution from next generation software sales. PS3 and Wii software sales are expected to contribute $576 million to overall sales growth for the year, helping to drive our estimate for overall 2006 U.S. sales to be at least 4% higher than 2005 levels.
We expect NPD U.S. retail video game console software sales data for the month of November (four-week period ending November 25, 2006) to be released on Thursday, December 7, after the market close. Our forecast is based upon a combination of channel checks, company press releases and intuition, with the greatest dependence upon intuition. Our channel checks are conducted by visiting a very small slice of the over 25,000 retail stores that carry video games in the U.S. We note that for a given game, a difference of only one unit per store per week could result in a difference of 100,000 units in volume, or $3 6 million in retail sales for the month. Therefore, we caution investors to use our estimates as only one data point in a sea of information.
We expect November sales of $785 million (up 12% compared to November 2005s $702 million). Our estimate reflects a decline of $112 million in current generation software sales (PS2, Xbox, GC, GBA), more than offset by an increase of $196 million in next generation software sales (PS3, Wii, 360, PSP and DS). Overall, we expect next generation software sales of $345 million and current-generation software sales of $440 million. Due to relatively light supply of next generation PS3 and Wii consoles, we do not expect next generation software sales to be greater than current generation sales in November or December.
We expect November sales to be driven by new releases Nintendos The Legend of Zelda: Twilight Princess (Wii), Square Enixs Final Fantasy XII (PS2), Microsofts Gears of War (360), Take-Twos GTA: Vice City Stories (PSP), Electronic Arts Need for Speed Carbon (360, PS2, Xbox, PC, PSP, GBA, DS, GC, PS3, Wii), Activisions Call of Duty 3 (PS2, 360, PS3, Xbox, Wii) and Guitar Hero II (PS2), and THQs WWE SmackDown vs. Raw 2007 (PS2, 360), along with a slew of launch title games for the PS3 and Wii. We note that 13 games sold over 100,000 units in October, and we expect 23 in November (compared to 21 last year).
We believe that the recent sales strength on current generation platforms will continue through at least March, given strong sell-through performance over the past five months and negative comparisons for the next five months. Consumers appear willing to purchase compelling content for current generation consoles in spite of the recent launches of the unobtainable PS3 and Wii. Through October, NPD data shows that Xbox 360 hardware sales in the U.S. were 2.9 million units, averaging approximately 250,000 units monthly for the last six months. We expect sales of 750,000 Xbox 360 hardware units in November, and between 1.5 2 million units in December. Sell through of Xbox 360 hardware could be higher if the supply situation for the PS3 continues to lag Sonys promised 1.2 million units by year end, with many holiday gift givers likely substituting purchases of the 360 in place of the PS3.
