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Analyst: Games Gaining Share With Strong CES

This year, games had a larger share of attention at the Consumer Electronics Show than in previous years, and Lazard Capital Markets' Colin Sebastian says this is evidence of games' growing market share, as he points to specific highlights from Activision
The annual Consumer Electronics Show in Las Vegas is usually known for the glitz and geekery of the latest cutting-edge gadgets. But this year, analysts observed that games had a larger share of the CES attention than in previous years -- and that's evidence of the market share the games biz is gaining, says Lazard Capital Markets' Colin Sebastian. "While the interactive entertainment industry is traditionally not a core part of the CES conference, we note that an increasing number of game-related products and services displayed at the show is indicative of the incremental market share that video games are absorbing of consumer spending on media and entertainment," Sebastian says. One highlight, the analyst says, was Activision CEO Mike Griffith's "upbeat" keynote on Guitar Hero and the state of the video game industry. Despite speculation that the band game franchise may have seen its peak, Griffith said holiday sales of the franchise were "robust" -- Guitar Hero III has topped $1 billion in lifetime sales. Sebastian is also positive on Activision's future prospects, but suggests the company's current earnings estimates might be "aggressive." Sebastian also observed Electronic Arts at CES, noting 2 million paid subscribers to the Pogo casual portal, and suggesting that MTV/Harmonix's upcoming Beatles band game, which EA will distribute, will release in holiday 2009. As for The Sims 3, although Sebastian suggests it could sell "several million units" in 2009, he isn't so sure about its launch timing. "While the game appears largely complete, we believe exact release timing may still be in flux," he says.

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