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Analysts Skeptical Of THQ, Dead Space, Ahead Of Likely Poor September NPD

Analysts now say flat industry growth for September would be a best-case scenario, with many even forecasting a decline in hardware and software alike -- concerned by issues from THQ's instability, Wii supplies and Microsoft's bullishness to EA's _Dead

Leigh Alexander, Contributor

October 9, 2008

1 Min Read

Ahead of September NPD results, many analysts now say that flat sales growth would be a best-case scenario -- but hardware and software declines are more likely. Analysts have warned for weeks that September would suffer in year-over-year comparisons to Halo 3's launch month -- Janco Partners analyst Mike Hickey expects a double-digit percentage slump for software in September alongside a low single-digit percentage decline for hardware, "despite Microsoft’s bullish sell-through comments at the Tokyo Game Show." "Importantly, Halo 3 was also a big hardware driver last year, creating a difficult hardware comparable for September despite the Xbox 360’s price cut and meaningful velocity pick up at retail," says Hickey. "We believe Nintendo sell through could disappoint, as we do not see a significant increase in Wii inventory until October and November." The outlook for the rest of the year is nonetheless positive; Cowen Group's Doug Creutz expects overall year-over-year industry growth in the mid-teens for the fourth quarter as a whole. Creutz also levied skepticism on the prospects for EA's Dead Space: "Despite recent critical praise, we think the title is likely to be somewhat constrained by niche appeal," he said. Analysts are also closely watching THQ; Hickey says that Jack Sorensen's recent exit "could suggest undisclosed issues with upcoming product and expected financial performance." "The company has performed poorly for over a year, and it's somebody's fault," says Wedbush Morgan's Michael Pachter. "It appears that Sorensen shouldered some of the blame, and I think that is appropriate." Creutz also says THQ "is in need of an owned-IP hit to stabilize financial performance," and says Saints Row 2 is a "critical release" for the company.

About the Author(s)

Leigh Alexander

Contributor

Leigh Alexander is Editor At Large for Gamasutra and the site's former News Director. Her work has appeared in the Los Angeles Times, Variety, Slate, Paste, Kill Screen, GamePro and numerous other publications. She also blogs regularly about gaming and internet culture at her Sexy Videogameland site. [NOTE: Edited 10/02/2014, this feature-linked bio was outdated.]

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