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Analyst: U.S. Game Biz To Hit $20 Billion In 2009?

The U.S. video game industry will grow 6.7 percent to $20 billion in calendar year 2009, as video games remain an attractive entertainment form, says analyst Mike Hickey of Janco Partners -- although hardware revenues are expected to drop.
The United States video game industry will grow 6.7 percent to revenues of $20 billion in calendar year 2009, says a new research note from analyst Mike Hickey of Janco Partners. Though that figure would represent a slowing of growth over the 19 percent increase seen in 2008, the projection still reflects a confidence in gaming to weather the current economic climate better than many other industries. "We continue to believe video games offer an exceedingly strong value proposition for consumers in the current economic malaise, and should continue to over index other forms of entertainment," Hickey writes, adding, "Continued success of the Wii and DS platforms are critical for CY09 growth, in our view." That overall growth is expected to be derived entirely from a 15.3 percent software sales increase $12.6 billion -- Janco estimates hardware sales will drop 5.4 percent to $7.4 billion, due to a combination of relatively flat sales, as well as recent and potentially upcoming price cuts to consoles. Still, the company says that revenue decline will be accompanied by a 35 percent growth in console install base, including PlayStation 2. Its estimates for 2009 hardware sales are as follows: hardwareunits.gif Source: NPD and Janco estimates Hickey notes that a PlayStation 3 price cut early this year could drive sales, but did not issue a firm projection as to whether that would occur. Approximately two dozen games were specifically mentioned as expected sales drivers for 2009, some of which have yet to be given titles (i.e. The Beatles, Guitar Hero V) or even announced (Burnout, presumably referring to a hypothetical new game in the series). The list is as follows: Guitar Hero: Metallica, Call of Duty: Modern Warfare 2, Guitar Hero V, Wolfenstein, Godfather II, Harry Potter and the Half-Blood Prince, Burnout, Mass Effect 2, The Beatles, Grand Theft Auto IV: The Lost and Damned, GTA: Chinatown Wars, Bioshock 2, Mafia II, UFC 2009 Undisputed, Tom Clancy’s Splinter Cell: Conviction, Red Steel 2, Assassin’s Creed 2, F.E.A.R. 2: Project Origin, Street Fighter IV, Killzone 2, Halo Wars, Resident Evil 5, Halo 3: ODST, God of War III and Punch-Out!! Electronic Arts, Activision, and Take-Two are each responsible (or likely to be) for four of the cited games, with an interesting note in that Grand Theft Auto IV: The Lost and the Damned is downloadable content. Ubisoft is the publisher of three of the cited games.

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