Analysts Predict 20 Percent Software Boost For August While Hardware Lags

Analysts generally predict August's upcoming NPD results will show software growth of 20 percent over the previous month, or about $600 million -- with $200 million coming from EA alone. Hardware, however, is expected to continue its summer slump.
Analysts generally predict August's upcoming NPD results will show software growth of 20 percent over the previous month, or about $600 million. "Software sales growth has been extraordinary thus far in 2008," says Wedbush Morgan's Michael Pachter in a research note sent to Gamasutra. "We believe that the video game software sector remains highly recession-resistant." Of the anticipated software revenue growth for August, over $200 million is expected to come from Electronic Arts alone, who appears to be enjoying a particularly strong month led by the release of its key Madden NFL 09. Nintendo will place second in the area of $100 million, and Activision Blizzard will place third around $65 million, say analysts, who differ on exact values. Though analysts generally expect NPD results to show that Madden led August overall, Lazard Capital Markets' Colin Sebastian says the 2009 incarnation of the annual franchise saw sales "roughly flat" over last year, and adds Wii Fit and Soul Calibur IV as other leaders. Though publishers Midway and Atari are generally perceived to struggle against the market leaders, both Pachter and EEDAR's Jesse Divnich see them gaining the biggest year-over-year growth in August. Predictions for Midway's growth range from 96 to 135 percent, even with no new August releases, and 52 to 69 percent growth is anticipated for Atari, led by Dragon Ball Z titles. Meanwhile, however, hardware is expected to continue its summer decline, analysts say, due in part to Wii supply constraints. Pachter says that despite Nintendo's claims it would increase production in the summer, he doesn't think the supply increases were implemented until September. "Because the U.S. has received only around 1/3 of total Wii production to-date, instead of a more normal 40 percent, there has been a severe shortage of Wii supply here that has yet to let up," says Pachter. Another factor in the hardware slump is a slowdown in Xbox 360 sales as consumers wait for the recently-announced price cuts to take effect. Sony has said it has no plans to cut PS3 prices, betting on the strength of its software lineup, and neither Pachter nor Janco Partners' Mike Hickey expect a PS3 price cut. EEDAR's Divnich questions the wisdom of this strategy. "Sony should heavily consider that maintaining its current course could result in another third place finish this holiday season," he says. "While the PS3 does have a great selection of exclusive titles lined up to drive hardware this holiday season, none can compare to the releases of Gears of War 2 and Fable 2, both of which are Xbox 360 exclusives." "Of course, the PS3 does have its Blu- Ray capability, but its adoption rate among high definition TV owners has been slower than what most experts originally suggested. It is also not a far stretch to suggest that the recent slowdown in our economy could play a major hindrance on HDTV purchases this holiday season," adds Divnich. "Nonetheless, we still remain positive that the PS3 will eventually catch-up to the Xbox 360 in terms of its install base, whether that happens in the short-term or long-term will be left up to Sony."

Latest Jobs


Vancouver, BC, Canada

Bladework games

Remote (United States)
Senior Gameplay Engineer

University of Canterbury

Christchurch, Canterbury, New Zealand
Academic in Game Arts and Animation

Fred Rogers Productions

Hybrid (424 South 27th Street, Pittsburgh, PA, USA
Producer - Games & Websites
More Jobs   


Explore the
Advertise with
Follow us

Game Developer Job Board

Game Developer


Explore the

Game Developer Job Board

Browse open positions across the game industry or recruit new talent for your studio

Advertise with

Game Developer

Engage game professionals and drive sales using an array of Game Developer media solutions to meet your objectives.

Learn More
Follow us


Follow us @gamedevdotcom to stay up-to-date with the latest news & insider information about events & more