Video Game Sales Analysis: Your NPD Preview

The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

We expect December U.S. retail video game console software sales data to be released by the NPD Group after the market close on Thursday, January 10.

We expect console software sales of $1.85 billion, down 11% from last year’s $2.07 billion due to continuing gamer fatigue and sustained Nintendo (TYO:7974) weakness, despite the November introduction of the Wii U. In our view, gamer fatigue manifested itself in lower-than-expected November debuts for Activision Blizzards’ (NASDAQ:ATVI) Call of Duty: Black Ops II, with franchise sales down close to 20% y-o-y, and Microsoft’s (NASDAQ:MSFT) Halo 4, which failed to meet our lofty expectations. November was a particularly rough month for Nintendo, as software sales on Nintendo hardware devices were down over 30% despite the debut of Wii U, and accounted for about two-thirds of the total monthly decline. Wii U software sales were $26 million, reflecting an attach rate close to one title per hardware unit and below our estimate of three.

Exhibit 1: Estimated Console Software Sales (by Publisher)

By publisher ($ millions)                                                                                              YoY                        MoM

Dec-12E                        % change               % change

Activision Blizzard                                                                 $400                             5%                           -28%

Electronic Arts (NASDAQ:EA)                                     $180                         -28%                             70%

Majesco (NASDAQ:COOL)                                                  $30                          -26%                           229%

Nintendo                                                                                   $175                          -38%                            129%

Take Two Interactive (NASDAQ:TTWO)                $80                            -3%                              64%

THQ (PINK:THQIQ)                                                             $55                           -63%                             36%

Ubisoft Entertainment (EPA:UBI)                        $280                             2%                              22%

Covered Publishers                                                         $1,200                         -18%                              13%

Overall Industry                                                               $1,850                          -11%                             29%

Publishers as % of Market                                                  65%

Source: The NPD Group/Retail Track and Wedbush Securities estimates.

We expect December console software sales to be…

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