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Wedbush: U.S. Game Sales Predictions Up 20% For September

A report issued by Wedbush Morgan Securities analyst Michael Pachter is predicting September 2006 NPD software sales, which will debut later this week, including an expected 19.6 percent growth over the previous year to $415 million in sales.
A report issued by Wedbush Morgan Securities analyst Michael Pachter is predicting September 2006 NPD software sales, which will debut later this week, including an expected 19.6 percent growth over the previous year to $415 million in sales. The estimate, according to Wedbush, includes $168 million in sales from the Xbox 360, Nintendo DS, and PSP, which represents a substantial $130 million expected growth over the previous year. In addition, the firm is looking for software released for current generation platforms to generate $247 million in sales. If accurate, this would reflect a 20 percent decline from 2005's sales. In addition, Wedbush notes that this decline in current generation software sales will “be more than offset” by sales of software titles for next-generation platforms. The firm expects PlayStation 3 and Wii software sales to add up to $432 million in sales for the year, and that overall 2006 US software sales will beat those of 2005 by at least 4 percent. Wedbush points out that sales have grown an impressive 17 percent over the last three months alone, and that because of this it expects similar “double-digit sales growth” to continue through November. The company wrote that is expects that September sales were driven largely by sales of THQ’s Saint’s Row for the Xbox 360, LucasArts’ multiplatform Lego Star Wars II:The Original Trilogy, Nintendo’s handheld titles Pokemon Mystery Dungeon and Mario vs. Donkey Kong 2, and Electronic Arts’ multiplatform basketball title NBA Live 07, along with continued strong sales of Madden NFL 07 across multiple formats. The firm also added that it expects ten titles to have sold more than 100,000 units in September, one more than reached that milestone in August (and three more than in September 2005). Looking towards the share prices for video game publishers, the analysts noted that while these companies have in general experienced growth in share prices over the last two months, this could change should any difficulty arise from the continuing console hardware transition. However, the firm added that it anticipates share appreciation to continue over the course of the 2006, with the mid-November launch window for the PlayStation 3 and Wii serving as the only real question mark at this time. Finally, in surveying the various publishers represented by Wedbush, the company noted its expectations for the companies' September results. The firm anticipates Activision, which released World Series of Poker: Tournament of Champions (PS2, 360, PSP, PC) and Cabela's Alaskan Adventures (PS2, 360) during the month, will post sales of $21 million, which would represent a 14 percent growth from last month and a 34 percent decline from the same time in 2005. Atari, which released Test Drive Unlimited for the Xbox 360 in September, is expected to report $7 million in sales for the month, which if true would mean a significant 57 percent climb from last month, and a 24 percent rise over September 2005. Wedbush also notes that it expects that Atari was able to sell 50,000 units of the next-generation racing title in its first month of availability. Major publisher and developer Electronic Arts released three titles in September, including NASCAR 07 (PS2, Xbox, PSP), NHL 07 (PS2, Xbox, 360, PSP, PC), The Godfather (360, PSP), and NBA Live 07 (PS2, Xbox, PC, PSP, 360). Wedbush expects EA to posts monthly sales of $110 million, which would put the company down 28 percent from last month, but up 8 percent from the previous year. Wedbush also notes that it anticipates the recent release Madden NFL 07 led sales for the company with 700,000 units sold in its second month. The analyst also added that it does not believe The Godfather sold well, and is anticipating total sales of fewer than 50,000 units. Looking to Majesco, the company continued to emphasize its focus on the handheld market, with four portable releases in September, including Guilty Gear Judgment (PSP), Cooking Mama (DS), MechAssault: Phantom War, and Strawberry Shortcake Sweet Dreams (GBA). Wedbush expects that Majesco generated $3 million in sales for the month, which would be an increase of 11 percent from last month, and an astounding 80 percent over last September. Midway Games is expected to generate $6 million in sales for September following its release of Spy Hunter: Nowhere to Run (PS2, Xbox) and The Grim Adventures of Billy & Mandy (PS2, GC). This would represent a slight 2 percent increase over August's sales, but a 32 percent decline from last year. Take-Two Interactive September releases included a pair of sports titles in NHL 2K7 (360, Xbox) and NBA 2K7 (360, PS2, Xbox). Wedbush anticipates the company to post monthly sales of 18 million, which would represent a slight 4 percent decline from last month, but a positive 32 percent rise from last September. Finally, looking to THQ, which released the PC strategy title Company of Heroes, as well as lower profile titles including Bratz: Forever Diamondz (PS2, DS, GC, GBA), Danny Phantom Urban Jungle (GBA, DS), Alex Rider: Stormbreaker (DS, GBA), and Unfabulous (GBA), the analyst expects a hefty $45 million in sales. If accurate, this would mean a significant 87 percent increase over August's sales, and an even more impressive 102 climb up from the previous year. Wedbush notes that is expects these sales to be driven by sales of 350,000 units of Saints Row, as well as earlier releases such as Cars, The Outfit, WWE Smackdown vs. Raw 2006, and other WWE games.

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