Robust Growth in Video Game Industry as well as Console Price Cuts Predicted

Robust Growth in Video Game Industry as well as Console Price Cuts Predicted


In an interview picked up by GamesIndustry.biz, Wedbush Morgan’s video game industry financial guru, Michael Pachter, sees strong growth in the gaming industry in 2009. The analyst feels that current concerns plaguing the industry are “overblown.”

“We think that concerns about weakening consumer demand for videogames are overblown,” he said in a note to investors. “In our view, the best indicator of future demand is hardware unit sell-through, and we expect a robust 9.15 million hardware units sold in December, up 13 per cent year-over-year. For the year, we expect total U.S. console and handheld hardware sales of 35.15 million units, up 17.4 per cent year-over-year.”

“This bodes well for continued software sales growth, as a large installed base of hardware households is likely to continue purchasing some software, while new console households are likely to buy software to accompany their hardware purchases.”

Moreover, hardware and software sales will likely be fueled by console price cuts at Sony and Microsoft. However, the Wii price point will likely remain unchanged, as demand for the platform shows no sign of slowing.

“Once the PS3 is at a more affordable price point (we expect a cut to USD 299 in April), we think that sales of that device will once again begin to grow. We expect another cut in price for the Xbox 360, with the feature-laden Pro model likely to come down in price to USD 249 at or before this year’s E3 show in June. “

“We expect Nintendo to maintain Wii pricing at USD 249 until the company sees signs that demand is slowing, which means a price cut may not happen until late in the year, if at all.”

To top