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Analyst: Holiday Game Sales Could Help 20 Percent Growth For 2008

Things look good for video game sales during the key holiday shopping season, says Lazard Capital Markets analyst Colin Sebastian, who projects software sales can achieve 20 percent growth for 2008 -- but amid price discounting and difficult year-over-yea
Things look good for video game sales during the key holiday shopping season, says Lazard Capital Markets analyst Colin Sebastian. According to the analyst, "stable" holiday sales trends have held up. "Our latest channel checks indicate that video game sales overall remain stable through mid-December, consistent with historical industry performance through economic downturns," he says. However, Nintendo's market dominance and a tendency for consumers to gravitate largely toward core titles complicates the sales situation slightly, Sebastian says. "Consumer demand continues to be uneven, concentrated among Nintendo products (Wii and DS), Xbox 360 hardware bundles, and a limited number of core software titles (e.g., Call of Duty and Gears of War 2) amid a congested slate of high-quality releases," he says. Software sales, Sebastian says, are still well on track to clock a minimum 20 percent growth for 2008 -- beating analyst targets set at the beginning of the year. 2009 may be a less-certain growth success, though, as it'll be set up to compare to a year containing several major franchise sequel launches, and sales numbers might suffer from discounting. "Looking ahead to 2009, we expect mid-single-digit growth in software sales on a tough growth comparison and potentially fewer hit titles (e.g., no GTA V until 2010)," says Sebastian. "In addition, we continue to believe that broader price reductions are likely on second-tier and catalog video games, while top-tier front-line titles should remain at $59 (PS3 and 360) and $49 (Wii)."

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