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Goldman Sachs Analyst Cautions Investors About Videogame Stocks
In a research note sent out to clients today, Goldman Sachs warned investors that it felt the videogame industry would be lower than forecast three months ago, due to profit warnings from publishers like Activision and THQ.
Goldman analyst Chris DeBiase said that "In October we believed that growth for 2003 could be in the 10 percent to 12 percent range. Now we believe it could be in the 5 percent to 10 percent range." DeBiase cited the following question marks hovering over the industry:
Whether The Sims Online will sell well. As a highly touted title with mass appeal, analysts are using this game as a barometer of general industry health right now.
Whether Activision and THQ can generate new, successful titles. If not, the implication is that their fiscal results will suffer, and they'll drag down the rest of the videogame sector with them.