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Game sales to dip 20% in January on current-gen weakness - Wedbush

By James Brightman

Game sales to dip 20% in January on current-gen weakness - Wedbush

Mon 10 Feb 2014 3:47pm GMT / 10:47am EST / 7:47am PST

Next-gen consoles also remained supply constrained, delaying next-gen spending says Michael Pachter

This Thursday, The NPD Group will release its January 2014 video games sales report, which Wedbush Securities anticipates will reveal a software sales decline of 20 percent ($300 million compared to last year's $373 million). In addition to the current-gen (Xbox 360, PS3) showing continued weakness, Wedbush said that the new consoles are still supply constrained following the holidays, and that's causing many gamers to delay their purchases.

Wedbush is expecting hardware sales of 350,000 Xbox One units and 375,000 PS4 units in their third month of release, with the Wii U bringing up the rear at just 60,000 units (although that would still represent a five percent increase year-over-year).

The slate of fall/holiday titles from last year - Call of Duty: Ghosts, Battlefield 4, EA Sports' titles, Assassin's Creed IV: Black Flag, Just Dance 2014, NBA 2K14 and GTA V - are expected to drive software sales again for January. While the forecasted January decline follows a software sales dip of 17 percent in December, it's not a trend that will persist for the rest of 2014, analyst Michael Pachter noted.

"In a nutshell, we think that the rapid ramp in sell-through for next generation consoles will cause an unprecedented ramp in next generation software sales, and notwithstanding current generation software sales weakness, we expect overall industry software sales to rebound into positive territory later this year. We believe this rebound is not only sustainable, but we expect it to be dramatic in the back half of the year, with double-digit gains expected," he said.

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