Games software sales are “highly recession-resistant,” says Pachter

By Patrick Garratt, Monday, 13 October 2008 17:04 GMT

In a research note this afternoon, Wedbush Morgan analyst Michael Pachter has added to a statement made by Kaz Harai over the weekend saying that the games trade is likely to fair better than most in the worsening economic climate.

“Software sales growth has been extraordinary thus far in 2008, up 48% through July before slowing to +13% in August,” he said.

“Notwithstanding this month’s anticipated decline, we believe that the video game software sector remains highly recession-resistant… We do not think that the decline in software sales is demand driven; rather, we think it is attributable to a difficult comparison.

The comparison is that of September 2008 compared to September 2007, thanks to Halo 3.

“With that said, we believe that negative sales growth in September will likely cause investor confidence to wane, with the likely consequence that video game publisher stocks will continue to perform weakly until sales growth resumes in October,” Pachter added.

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