Pachter underestimates 2008 game sales, re-estimates them

By Patrick Garratt, Wednesday, 3 September 2008 07:44 GMT

Wedbush Morgan analyst Michael Pachter has predicted that his 2008 videogame sales prediction is going to be wrong, and is therefore preemptively re-predicted how things are going to go down.

For the US, Pachter anticipates 32 percent full year growth, where he once prognosticated a mere 19 percent.

Meanwhile, Europe’s hardly getting the raw end of the deal, with a 20 percent increase to 40 percent full year growth.

Find the full research note after the link.

By Nathan Grayson

Entertainment Software: September 2008 Video Game Monthly: Increasing Industry Growth Estimates

o This newsletter lists several of the key events (including key game releases and financial news) in August, and previews our expectations for this month (September) in the video game industry.

o We have significantly raised our estimates for 2008 video game software sales growth in the U.S. (to +32% from +19%) and in Europe (to +40% from +20%).

o The Electronic Arts/Take-Two saga continues. In April, Take-Two’s Board rejected EA’s $26/share offer as inadequate and adopted a shareholder rights plan. In mid-August, EA let its $2.0 billion tender offer expire but accepted Take-Two’s invitation to conduct limited due diligence. A confidentiality agreement was signed, and the companies were in discussions at month-end.

o Atari and GameStop reported results above expectations, while Midway reported in line results. Nintendo significantly raised its Q2 (September) guidance.

o U.S. retail console software sales for July were again strong, up 41% y-o-y (as reported by NPD), while PC software sales were -16%, hardware sales +17%, and overall industry sales up 27%. Year-to-date U.S. software sales are up 39%, hardware sales are up 22% and overall industry sales are up 32%.

o The top August game releases: Electronic Arts’ Madden NFL 09 (PS3, 360, Wii, PSP, PS2, DS) and Mercenaries 2: World in Flames (PS3, PS2, PC, 360), Microsoft’s Too Human (360), and Nintendo’s Mario Super Sluggers (Wii).

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Michael Pachter

Wedbush Morgan