Last month, the industry-tracking NPD Group released its March 2010 US retail figures, showing a 10 percent jump in game sales and marking the industry's first positive month in 2010. That growth could be short lived, as Pacific Crest Securities analyst Evan Wilson this week released a note to investors predicting a return to double-digit declines in the April software sales figures.
"We estimate that sales declined 10 percent year-over-year, to $460 million, due to the shift of Easter gift shopping into March and a lack of high-profile new releases this year (the exception being Splinter Cell) versus last year," Wilson wrote.
The analyst noted that the April 2009 sales figures were boosted by the launches of The Godfather II and X-Men Origins: Wolverine, as well as continued strong performances from Resident Evil 5, Pokemon Platinum, and Street Fighter IV. The strength of that lineup was partially hidden by the month's 23 percent software sales decline, a result of being compared to the blockbuster April 2008 launch of Grand Theft Auto IV.
Wilson believes Splinter Cell: Conviction will dominate the April 2010 sales charts, with the Xbox 360 version of the stealth action game racking up 450,000 copies sold for the month. The next biggest new releases in his estimation were Capcom's Monster Hunter Tri and Super Street Fighter IV with 150,000 sold each, and EA's FIFA World Cup 2010 and 2K Games' Grand Theft Auto: Episodes from Liberty City for the PlayStation 3, each expected to sell 100,000 copies for the month.
Not all analysts are resigned to an April slump. Wedbush analyst Michael Pachter also released his NPD predictions, saying he expects software sales to actually be up 2 percent for the month to $520 million. Pachter reasoned that a strong lineup of March releases like Battlefield: Bad Company 2, Pokemon HeartGold and SoulSilver, Final Fantasy XIII and God of War III would continue to sell well, combining with Conviction to push software sales into positive territory.
"While investors may remain skeptical of a return to growth should April end up in negative territory, we are confident that sales will return solidly into positive territory beginning in May," Pachter said. "The May lineup is absolutely spectacular. May titles include Red Dead Redemption, Super Mario Galaxy 2, Alan Wake, Prince of Persia, Lost Planet, Blur, Skate , Iron Man 2, Lego Harry Potter and Shrek 4. We think that these titles have the potential to drive sales up at least 25 percent, and our bias is that the month could grow as much as 40-50 percent."
Wilson also expects a big rebound for the month of May, projecting a packed lineup of hit titles to push software sales up 20 percent or more for the month. Unfortunately, the industry will need to wait longer than normal for the good news, as Wilson said an internal NPD system upgrade is expected to delay the release of the May numbers until around July 1.Watch the video