Tag Archives: Colin Sebastian

Industry analysts are predicting an 8-15 percent decline in US hardware and software sales ahead of June’s NPD figures.

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Due to some job postings over on Amazon, Lazard Capital Markets analyst Colin Sebastian believes the online retailer is planning to expand it’s online digital game download service to be a bit more like Steam’s.

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Colin Sebastian, analyst for Lazard Capital Markets, has revealed in the firm’s latest note to investors that sales of New Super Mario Bros Wii are “off to a good start after three days at retail”.

This information was obtained through a meeting with Nintendo yesterday, and while sales for the game are moving in a positive direction, Sebastian is unsure if the title has make a dent in “incremental hardware sales”.

The analyst feels that the next 12-months are integral for Nintendo, and positive sales will depend on the software line-up for the next year. However, he claims that the gaming giant remains “upbeat” regarding 2010 and that the company plans to be “more vigilant” in the fight against piracy.

More through GI.biz.

Best Buy now has trial kiosks set up in some of its US stores full of used games.

The stores are also allowing customers to trade used games for store credit.

Analysts predict this could result in the used game market earning $3 billion annually combined with GameStop and other stores that sell used games.

“While we believe that Best Buy’s entry into the used video game market will create a new overhang on shares of GameStop,” wrote Colin Sebastian of Lazard Capital Markets. “We expect Best Buy’s initiative to expand the used videogame market rather than take significant share from the specialty channel.

“We estimate the size of the commercial used videogame market in the USD 2.5 billion range worldwide, continuing to grow, driven by major players including GameStop, Game Group, Game Crazy, and Internet marketplaces such as eBay and Amazon.”

Via GI.biz.

Lazard Capital’s Colin Sebastian reckons that online games will generate upwards of $11 billion of revenue this year, thereby making up 25 per cent of total industry earnings.

“We estimate that online video games will generate more than $11 billion in revenues this year, up from $3 billion in 2005, and account for roughly 25% of industry game sales worldwide,” said Sebastian.

“In this respect, we continue to believe that the Internet is emerging as an important growth driver and content platform, weaving together communication, information, commerce and entertainment.

“In addition, 2009 may be remembered as the year in which the pace of change in media consumption accelerated, while 2010 and 2011 may bring improved monetization and mass market adoption of web-based applications and digital content, in particular interactive entertainment.”

Thanks, Gama.

In other analyst news: Webush Morgan’s Michael Pachter said earlier today that he believes the US will see a 50% decline in hardware sales for May. NPD results are in this Thursday.

Lazard Capital Markets analyst Colin Sebastian says that the PS3 could get a $100 price cut between E3 and the end summer.

Putting the console at $299 would not only be good for business, but the purse strings as well. Anything less “would likely be perceived negatively by the market,” Sebastian told Gamasutra.

“In addition to a $100 price reduction, which would put the PS3 in easier reach of a mass market audience, we note that Sony has a healthy lineup of upcoming first-party video games planned over the next year, including inFAMOUS, God of War III, Heavy Rain, Uncharted 2 and Gran Turismo 5,” said Sebastian.

“For Sony PlayStation, we believe the next 12 months are critical to regain market share, particularly with Nintendo losing some momentum near- term, and with Microsoft likely introducing a new gesture-based user interface.”

More through the link.

Lazard analyst Colin Sebastian said the the research firm expects US software sales to round the $10 billion mark “for the first time.”

On the whole, the US market was up from five to ten percent in spite of the current economic crisis.

What won’t really come as a surprise to anyone is that Lazard says Nintendo dominated the market for the month, saying the family friendly Wii sold over 3 million units.

Of the other two, Sebastian added:

“”We also believe Xbox 360 sales benefited from the fall price reductions, particularly with the Arcade console now at a $199 value price point.”

“While the PS3 continues to lose market share, we note that publishers and retailers alike are anticipating a price reduction on the platform this year,” he said.

The official NPD numbers are released tomorrow evening at circa 0030 CET. Make sure you’re right here to get them when they arrive.

Thanks, Edge.

By Mike Bowden

Lazard Capital’s Colin Sebastian issued a research note today saying that a new Princess Peach title and, wait for it, a brand new Zelda title would help game sales grow 5 percent in 2009.

That was the good news. The bad news is that the new Zelda title is pure guesswork in his part. The Princess Peach adventure isn’t.

GTA V was also included in his research: “Looking ahead to 2009, we expect mid-single-digit growth in software sales on a tough growth comparison and potentially fewer hit titles (eg, no GTA V until 2010),” he wrote.

However, when Gamespot quizzed him on that, “Sebastian said he wasn’t so much specifying 2010 as a release window for the game as telling investors that it would definitely not be coming out in 2009.”

So a huge non-event really. Sorry about that. More through the link, though.

By Mike Bowden

Lazard Capital’s Colin Sebastian’s significantly dropped his outlook on EA, saying several holiday franchises are tracking lowere than expected and that more cost-cutting is likely to be announced in the coming quarters.

“Specifically,” he said in a note this afternoon, “we believe several EA titles are tracking below plan at retail this holiday, including Need for Speed Undercover (with disappointing reviews), new franchise Mirror’s Edge, and Rock Band 2. Solid sales of Dead Space, FIFA 09, and Left4Dead are helping to offset the weaker titles, in our view.”

The analyst reduced his Q3 revenue estimate from $2.07 billion to $1.23 billion.

“We believe further cost and franchise reductions are likely,” he added.

“Importantly, we believe EA is continuing to review its cost structure and franchise base, and it is possible that management will announce further cuts in headcount and the development pipeline (including existing franchises) over the coming quarters.”

It’s NPD week! Lazard Capital’s Colin Sebastian just issued a note saying the firm expects Wii sales to have dropped in the US last month, although the doomsayer may have to wait for their “I told you so” moment for a while yet.

“We believe a sequential decline in Wii sales is possible in July, and would indicate a pre-holiday inventory build rather than a demand issue,” said the analyst. “We also note that the console appears to be in stock at many overseas retail locations.”

Sebastian went on to predict that we can expect hardware “enhancements” to both PSP and DS this year.

“We expect a number of meaningful hardware announcements this fall, likely to include price cuts on the Xbox 360 and enhancements to handheld systems from Sony (PSP) and Nintendo (DS),” he said.

NPD results are out this Thursday, August 14.

Lazard Capital’s Colin Sebastian has dropped his price target on EA from $58 to $55.

“While we continue to believe that EA will ultimately benefit from improving execution and better product momentum in 2HF2009, we believe ongoing margin pressures and lack of R&D leverage limit near-term upside in the shares,” said the analyst in a note this afternoon.

Sebastian did, however, raise his revenue estimate on the firm based on what appears to be strong demand for Spore.

“We are encouraged by solid game ratings of several new titles from EA, and there are positive early signals of interest for key F2Q release Spore, with roughly 1.4 million uploads to date
using the Creature Creator,” he said. “Based on solid quarter-to-date sell-through data (driven by Rock Band), we are increasing our F1Q revenue estimate slightly to $630M (+46% year-over-year) from $600M.”

Buy buy buy. Wedbush Morgan’s Michael Pachter just raised his rating on Activision from buy to strong buy ahead of an expected approval of the firm’s merger with Vivendi on July 8.

The analyst issued a first target for the 12 months ending Dec 2009 of revenue at $5.26 billion and pro forma EPS of $1.50.

Lazard Capital’s Colin Sebastian also issued a note this afternoon raising the firm’s price target to $40 from $33.

“We believe the transaction is set to create a formidable new digital media powerhouse and the most valuable interactive entertainment company worldwide, unlocking the value of industry juggernaut World of Warcraft, and possibly also setting a new benchmark for profit margins among publicly traded video game pure-plays.”

Lazard Capital and Wedbush Morgan have both put out bullish growth figure for the US games market this morning, ahead of the release of May NPD data this week.

The former is predicting 30 percent growth year-on-year for the month, with Wedbush Morgan’s Michael Pachter pushing the boat out a little further to 39 percent.

“We expect May US retail video game console software sales data to be released after market close on Thursday, June 12,” said the games analysis superstar. “We forecast sales of $530 million, +39% compared to last year’s $381 million.”

NPD day’s out favourite day in the entire month. It’s what gets us out of bed in the morning, every morning. God bless you, growth.

Lazard Capital’s Colin Sebastian said this morning that while he expects a 360 price drop this year in the $50 region, a PS3 cut is not expected.

“We continue to expect Xbox 360 price cuts this year (~$50 reduction), while Sony appears content to focus on achieving PlayStation profitability at the current PS3 price points,” the analyst said in a note ahead of May NPD data this week.

Sebastian said last month that he didn’t expect to see a drop on PS3 in the US in 2008, this new statement being a reiteration of the message a month previous.

Lazard Capital’s Colin Sebastian just issued a note on last night’s EA financials saying that news on the company’s proposed buyout of Take-Two can be expected next Monday.

“Expect update on TTWO bid by Monday morning,” he said. “We continue to believe that the current offer of $25.74 per share would be accretive to earnings for Electronic Arts, as well as fill several meaningful product gaps.”

If this is the news many expect it to be, expect a force 65 netplosion early next week.

The analyst is maintaining a “buy” rating on EA’s stock and a target of $58 on a current price of $54.57.

Lazard Capital’s Colin Sebastian has predicted a 35 percent increase in March US sales year-on-year ahead of tomorrow’s NPD data.

“We estimate video game software sales increased 35%+ in March. NPD is scheduled to release video game sell-through data tomorrow afternoon,” he said in a research note. “Based on our retail and industry checks, we expect software growth to meet, and perhaps exceed, our original 35% estimate with the Easter/spring break shift boosting a solid release schedule, which included Super Smash Bros. Brawl (Nintendo), Rainbow Six: Vegas 2 (UbiSoft) and Army of Two (ERTS).”

Sebastian’s prediction follows Michael Pachter’s note yesterday that he expects a 47 percent increase for March.

Lazard Capital’s Colin Sebastian just published a note saying he expects next week’s March NDP data to show a heavy sales rise for the month.

“We estimate 35 percent growth in March software data,” he said. “Next week, NPD is scheduled to release industry sell-through data for the month of March. We believe software sales benefited from several strong new title releases, catalog sales of titles such as Call of Duty (ATVI) and Rock Band (MTV/ERTS), the shift of the Easter holiday into March (from April last year), earlier spring breaks, and improving PS3 hardware sales.”

He added: “Industry sales trends remain positive into Spring. Our retail and industry channel checks indicate that video game selling trends remain positive through early April. Specifically, we believe there is little spillover into the video game market from overall consumer spending weakness, and that key software releases have sold well, including Super Smash Brawl (Nintendo), Rainbow Six: Vegas 2 (UbiSoft), and Army of Two (ERTS).”

We love NPD data. It’s our favourite time of the month. Give us some American sales figures, right now.

In the wake of yesterday’s European Xbox 360 price drop, US analysts have said they expect similar action from Microsoft in America before the end of the year.

“I expect a 360 price cut before Xmas, perhaps to $299 for the premium model,” said Wedbush Morgan’s Michael Pachter. “If Sony cuts the price before then, I expect Microsoft to cut to at least $50 below the price of the PS3.”

Colin Sebastian, an analyst with Lazard Capital Markets, agreed that a US price cut is a strong possibility.

“We believe price cuts are also likely in North America on the Xbox 360, possibly combined with the long anticipated announcement of a new hardware sku with a larger hard drive,” he said.

“As for PS3, Sony probably takes a wait and see approach as to whether Blu-ray momentum and an improving software line-up can sustain higher demand, although competitively they may be left with little choice if pricing continues to limit market share.”