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Friday, December 02, 2005

Analysits predict Zero Growth for 2005

WMS has issued its preview of NPD's TRSTS report, estimating a poor November for the industry. The analyst has forecast sales of $715 million, down 16% over last year. It has also downgraded its full-year estimate from 6% growth to zero growth.

NPD's final stats are due Thursday, December 8. WMS' numbers are an estimation based on a much smaller sample group than NPD's. However, they appear to confirm a general feeling in the industry that the peak Holiday season is starting late, and may not gather the hoped for momentum.

November 2004 saw sales of $849 million, driven by strong initial sell-through of Microsoft’s Halo 2 and continued strong sales of Take-Two’s Grand Theft Auto: San Andreas, which accounted for approximately 20% and 9% of last year’s sales respectively.

This year's big releases have been Activisions’ Call of Duty 2 Big Red One, THQ’s WWE Smackdown vs. Raw 2006, Electronic Arts’ Need for Speed Most Wanted, and LucasArts’ Star Wars Battlefront 2. Continuing to shine are Madden NFL 06 and NBA Live 06, Sony’s SOCOM III, and Take-Two’s Grand Theft Auto Liberty City Stories.

The company is still sticking to its view that the market will correct itself by the end of the year, but says that its previous estimate of 6% growth is now too high. A statement read, "Our most recent forecast predicted U.S. console and PC software sales growth of 6% for 2005, and we now acknowledge that our forecast is too high in light of the weaker than expected October and likely weak November sell-through data. On balance, we now expect sales for 2005 to be flat to slightly positive." The firm says it will issue a formal forecast after NPD's stats are available.

WMS has repeated its view that the market has been hurt by a lack of exciting new releases. "We remain concerned that consumers are uninspired by the sequel-driven slate of new games released this quarter," said the firm.

Publisher's individual stats do not make for especially pleasant reading. Take-Two with revenues of $30 million, will be down 70% over last
year. THQ ($40 million) is down 44%. Electronic Arts ($125 million) is down 6%. Activision ($65 million), Atari ($25 million) and Midway ($12 million) are all up slightly year-on-year.

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