Tuesday, October 14, 2008

Economic down turn, Game Software "Highly Recession Resistant"

The global stock market has seen tumultuous times as of late, but consumers are still willing to drop cash on a videogame, says one analyst.

Wedbush Morgan analyst Michael Pachter said in a Monday research note, "Notwithstanding this month’s anticipated decline, we believe that the videogame software sector remains highly recession-resistant...

"...As a category, games are one of the lowest cost forms of entertainment, particularly to those households that have already invested in a home console."

He expects U.S. NPD retail software sales figures for September to be down 6 percent year-on-year, not because of lacking demand, but due to a tough comparison--mega-hit Halo 3 launched the same month last year.

Pachter forecasts September sales of $620 million.

On the hardware front, he expects Wii to have sold 600,000 units, followed by DS (550,000), Xbox 360 (300,000), PSP (200,000), PS3 (175,000) and PS2 (125,000).

The boost in Xbox 360 sales is attributed to the recent price cut across all models, bringing the base Xbox 360 Arcade to $199.

He added, "We believe that the long-awaited Wii production increase finally impacted unit sales in September. Xbox 360 price cuts occurred on September 7, and we forecast a 50 percent sequential increase in Xbox 360 sales for the month.

"We think that some substitution occurred, with both the PS3 and PS2 likely suffering sequential monthly sales declines." via Edge

Jason Kiwaluk

Mower & Shoveller,

Ideation | Ecommerce | Fintech | Innovation | Strategy | Opinionated Agitator RevenueWire,FuturePay+PayMotion

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