Fri, Apr 17, 2009 | 13:01 BST
March NPD: US sales weakness to continue for “months,” says Pachter
However you dress it up, the 17 percent year-over-year revenue drop for the US games industry announced yesterday is “wince-worthy,” to put it mildly. Worse, Wedbush Morgan’s Michael Pachter said today that he expects the gloomy weather to stay with us for “months”.
He said in a note:
We believe investor concern may be heightened, with double-digit negative sell-through implying that the video game consumer has “rolled over”. The weak March results follow strong sales in prior months with last month’s +9%, January’s +10%, December’s +16%, November’s +11% and October’s +35%. In addition, combined next generation console and handheld hardware unit sales were down 19% year-over-year with 2.0 million hardware units sold in the month, giving us less confidence about the a reversal in software sales over the near term, especially given tough comps for the next four months.
And added:
We expect negative market reaction to the sales data. Overall sales were down double-digits for the first time since May 2006, and the year-to-date trend of –2% gives credence to conservative publisher views about the year. We expect investors to trim positions in most video game publisher and retail stocks, and think that lingering concerns about the economy will limit share price appreciation until we see a reversal to positive sales growth. We think that negative sentiment could provide an opportunity, as solid hardware sales over the last several months imply continued software sales strength later in 2009. We expect the negative sales trend to reverse by May, and continue to believe that the video game software sector remains highly recession-resistant.
Got a hat? Hold onto it.
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Posted in: America, Hot, Retail, Trade
Tags: march npd 2009, michael pachter, wedbush morgan
16 comments
#1
Psychotext
17/04/09, 1:07 pm
Oops there goes another rubber tree plant.
#2
Patrick Garratt
17/04/09, 1:09 pm
Had to happen sometime. There’s only so many Wiis America can buy.
#3
No_PUDding
17/04/09, 1:16 pm
I was about to comment some good news to counteract it. I had a Ginsters pasty in my hand, and I was eating it. That’s really good. But then the bottom fell through. So it’s bad news all around.
#4
No_PUDding
17/04/09, 1:19 pm
Videogame sales bigwig: This industry is recession resistant! But we’re going to be affected by the recession for the next few months.
#5
Patrick Garratt
17/04/09, 1:23 pm
I don’t think there’s any reason to panic, tbh. There’s been a period of insane growth. It has to be tempered by “negative” periods by default.
#6
Blerk
17/04/09, 1:25 pm
Did he comment on quite how he managed to balls up his predictions so badly this month?
#7
OrphanageExplosion
17/04/09, 1:25 pm
Is this the same Pachter who was – once again – completely wrong with his predictions for this month’s NPD?
Edit: Bah, Blerk beat me to it.
#8
No_PUDding
17/04/09, 1:27 pm
Yeah, and in other positive spin I scraped up the contents of my pasty and ate it.
#9
Psychotext
17/04/09, 1:29 pm
It’s a sad sad situation.
#10
Robo_1
17/04/09, 1:29 pm
His NPD predictions are almost without fail, completely off track. He should really stick to more general predictions, as when he starts talking specific figures, you know you’re about to take a ride on the lollercoaster.
#11
Tonka
17/04/09, 1:43 pm
Whait a minute. Is he saying there will be a sales slump over summer?
No way!
#12
Shatner
17/04/09, 1:45 pm
Yeah. The only experts that never ever get things wrong are the sort who post anonymously in comment threads!
/looks into abyss
#13
deftangel
17/04/09, 2:02 pm
Into this abyss the Lemmings jump. Based on the kneejerk negative reaction to one month’s worth of data I can easily envisage a scenario where the Industry talks itself into being “untouchable” again after sales spectacularly exceed expectations for April.
Pachter’s job isn’t predicting monthly hardware sales but given it took him 3 years to change his PS3 wins prediction it’s a bit daft of him to completely change tack in the space of a week after what, the industry’s 2nd or 3rd best March ever?
#14
Patrick Garratt
17/04/09, 2:10 pm
It’s the negative percentage investors don’t appreciate. “The market” likes growth.
#15
Shatner
17/04/09, 2:15 pm
Easy deft. You shouldn’t go judging the competence of others mere days after you spouting your “conspiracy” twaddle.
#16
deftangel
17/04/09, 5:44 pm
If armchair analysts aren’t allowed conspiracy theories then who is?