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SIG Journal Rates Big Four Publishers in 2006

The SIG Susquehanna Financial Group's Video Game Journal, a newsletter of financial analysis regarding the video game industry, has evaluated the upcoming releases for th...
The SIG Susquehanna Financial Group's Video Game Journal, a newsletter of financial analysis regarding the video game industry, has evaluated the upcoming releases for the four major U.S. publishers: Electronic Arts, Activision, Take-Two, and THQ. According to the analysts, 2006 will continue the transition period woes already seen in the 2005 holiday sales as publishers attempt to balance up declining sales on existing platforms and low install bases on next-generation systems. Electronic Arts is the first company to be profiled, and the SIG journal places its best bets on Madden 2007, a consistently strong seller for the company, as well as new IP in Black, Superman Returns, and Spore. All come with caveats, however: "We believe the next Madden iteration (current-gen plus next-gen) may not outsell its predecessor because of the console transition," say the analysts. Furthermore, "the success of Superman Returns will most likely be correlated to the movie's box office performance," which is an unknown, and "Black […] may perform modestly, as the genre is crowded with well-known franchises …" As for Spore, the game's highly unique nature leads the SIG analysts to hold off on predictions entirely. For Activision, the analysts expect Activision to follow the strong success of Call of Duty 2 and Call of Duty 2: Big Red One (not the same game) with more titles in the franchise. In already-announced titles, the analysts cautiously predict success for X-Men 3, but note that X-Men 2: Wolverine's Revenge performed below expectation, and the game will also be tied to the accompanying film's box office. The rest of the company's slate for the year is unknown, but the SIG analysts "look forward to announcements of new owned IP for 2006." The SIG analysts lead their examination of Take-Two straight off by noting that "FY06 looks like a no-growth year on the top line." Though the company is releasing two new Grand Theft Auto games -- a port of Liberty City Stories for PS2 and a new title for PSP -- SIG expects sales to be hobbled by dwindling interest in the PS2 and the PSP's limited install base. Similar current-gen woes are predicted for Max Payne 3, and Elder Scrolls IV: Oblivion is expected to do modestly due to middling sales on the last game in the series combined with the Xbox 360's production woes. Only Bully, a new IP developed by Rockstar, represents "the greatest promise of the new franchises in CY06," but SIG warns that increased political pressure could affect sales. Finally, the SIG journal ends on a high note in evaluating THQ, which it expects to have a strong year based on sales of Saint's Row, a next-generation urban action game for Xbox 360, and the multiplatform Cars, based on the upcoming Pixar movie. "Pixar's historical box office performance should drive strong unit sales of Cars," say the analysts, and back up the prediction by noting the success of THQ's last Pixar-based game, The Incredibles. As for THQ's other properties, SIG predicts that "as we head into the transition cycle, unit sales of WWE and SpongeBob titles should be lower than prior iterations. […] We believe the lower revenue from these titles in 2006 should be more than offset by revenue from Cars and Saint's Row."

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