Analyst Predicts Doom & Gloom for Holiday Retail Sales

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Analyst Predicts Doom & Gloom for Holiday Retail Sales

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Analyst Michael Pachter believes that even the arrival of the Wii U won't be enough to restore declining game sales.

Winter is coming, and with it comes the holiday sales that will provide a much-anticipated boost to the economy. Unfortunately, analyst Michael Pachter is predicting that this year might not be as lucrative for the games industry as publishers are hoping. Thanks to a prolonged console generation, retail game sales have been slowly dropping across the board, and even the arrival of the Wii U may not be enough to fix the problem. Pachter believes that the only thing that could reverse the downward sales trend is a new console cycle, which won't really be into full swing until at least next year.

"We expect October - December to be relatively flat, and expect a return to negative territory again next year, at least until the launch of a next-generation console from Microsoft or Sony," Pachter said. "A new console cycle is likely to reverse the negative sales trends of the last several years, with next-generation consoles expected from each of the three manufacturers over the next 18 months. Nintendo will launch the Wii U on November 18, and, while neither Sony nor Microsoft has yet announced new hardware, we expect a PS4 no later than November 2013, and a next Xbox no later than March 2014."

It's not all bad news however. Pachter is also predicting that the new console generation, whenever it arrives, will be heralded with a massive library of new titles. "We believe that the publishers plan an unprecedented number of new games for launch in the first two years of the next generation, providing relief from the gamer fatigue we've seen over the last three years," he said. In other words, while game sales could be sparse this year, subsequent years will more than make up for it. Whether these games will be good enough to warrant the wait remains to be seen.

While a new generation wouldn't necessarily represent a technological leap forward, Pachter thinks it would benefit hardware and software sales in the long run. The new consoles may even provide an opportunity for publishers to finally respond to competition from mobile markets. "Competition from social and mobile games hurt packaged goods sales over the last three years," Pachter explained. "We expect the publishers to address the "problem" of free online multiplayer with evolving business models, adding increased opportunities to purchase virtual items, creating subscription-only serialized content, and adding premium subscription layers to the free offerings currently provided."

Source: Games Industry International

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Not really a shocker. This whole year has been pretty underwhelming as far as gaming goes. Sure, there's been some great games, but it's been really sparse.

I think it will be slow because food prices are going up, globally the economy is down, and people are not really confident in much of anything now days.

Yea i do not think a new xbox or ps at 600 to 800 dollars would be the cure for what ails the gaming industry. Actually the wii being at a fairly cheap price point might be more a shot in the arm for the season than the alternatives.

But i think this is the same guy that parrots the same deal each and every time he opens his trap about how much we all need and want to throw money on a new shiny xbox/ps. I dont see too many gamers that seem all fired in a hurry to buy anything new cause its not good out there for a lot of people period.

I question the logic behind thinking PS4 will be out before NextBox when the latter was already been mentioned that it is coming soon while Sony has been tight lipped and saying it's got a ten-year life-cycle. Not saying it isn't possible, but this makes me suspicious about the accuracy of the analysis.

Also, no mention of PC or digital sales? Does anyone expect Steam to double profits again for the fourth straight year in a row? Just saying, can't all be gloom & doom.

I don't know if I believe what he is saying. Analysts are a funny group, they tend to be more inept at prediction than random guessers. More often than not they predict things less accurately than the random guesses. I don't see Pachter being any different. Any gamer can tell that the holiday lineup of titles is rather unextraordinary, even on the WiiU. The important shortfall of what he is saying is that it's clearly stemming from the idea that a technological leap is necessary for game to progress... which is not true at all. With better tech they will only take the current type of games and try to make them bigger, which isn't an answer for gamers being burned out.

But, I could be wrong, so it's cool. HAHA.

Oh no! The multi-BILLION-dollar cash cow which is gaming might go down a smidgen because of sales!

Please, that's like saying there's a drought in Pittsburgh when we're a rain-capital with THREE RIVERS RUNNING THROUGH TOWN. The demand for gaming will last until the end of humanity, because we get bored. And sometimes, television and books and sex and sports and whatever else isn't what we're in the mood for.

This isn't like the 80s where gaming can crash now. There's too damn much of it to be harmed so easily. That was when it was a Level-1 character. Now, it's say Level-73, taking on giant dragons like nothing with four limit breaks and fifty thousand hit points. IT WILL BE FINE.

[Starts reading]

Analyst Michael Pachter believes...

[Stops reading]

How about they just realize that people aren't buying all their games in retail anymore?

ah, so it IS that same idiot, i thought the nobbing off of sony and microsoft at the same time sounded familure

"Thanks to a prolonged console generation, retail game sales have been slowly dropping across the board"

Am I the only one who that makes no sense to? Consoles ownership is at its maximum, how does that cause less sales? Sure, consoles aren't selling, but everyone and their cousin has at least one current gen machine by now. Game sales should be through the roof unless companies were putting out shitty games that no one wants to buy... Oh I think I just figured out why there's a down-turn.

Personally, I have about 6 new items coming to me from October-January and that's not counting whenever I can get my hands on a Wii-U and get a few things for that. Heck I'm still waiting for the Vita and 3DS XL to get a few more games so I have good cause to buy one or the other.. or both.

Really, how stupid is this guy, and the people who agree with him, who can say in one breath that money is too tight to buy games, but then turn around and say a new console generation would revitalize things. Last time I checked, a launch console costs about 5-10x the price of a game. Someone needs to retake their math.

DVS BSTrD:
How about they just realize that people aren't buying all their games in retail anymore?

...What? But where am I supposed to use my Blockbuster membership at then? Or does the card count for Rhino still?

Kmadden2004:
[Starts reading]

Analyst Michael Pachter believes...

[Stops reading]

Pretty much this. I wouldn't trust Michael Pachter to give me the correct time in a clock shop, if me being late would give his stocks a boost.

Kmadden2004:
[Starts reading]

Analyst Michael Pachter believes...

[Stops reading]

I basically only clicked on the link to see if he was that "analyst."

Think his firm keeps him around for the lulz?

Thank you for the report Captain obvious... Now over to lieutenant sarcasm who is holding a press conference in reaction to this report

I would love to see a pie graph showcasing the ratio of claims Pachter has nailed to the one's he's messed up on. I think it's safe to say the graph would be very lopsided.

I'm trying to remember if he was one of the analysts who underestimated the Wii before...we all know how that one turned out. At this point, it's Nintendo's game to run with. No competition, lots of hype (Nintendoland and ZombiU in particular are looking like big sellers) and a full slate of releases for the holiday season. Anyone with half a brain could predict that.

Sylveria:
Game sales should be through the roof unless companies were putting out shitty games that no one wants to buy... Oh I think I just figured out why there's a down-turn.

its pretty much that. it doesnt matter if you pump out games, it matters if you put out one Good game. No one wants Call of Duty or Battlefield because they are not interesting. AAA companies pump money into safe bets despite the fact that the safe bet is something that hasnt been done before. Minecraft was/is huge because it was New. NO ONE had made something visible that did that in digital form. People piled on Borderlands because Diablo hadnt been seen for years.

Tony Hawk being bored is actually fucking better for this industry then the largest companies in the industry, because at the very least he got the good THPS games back out because he was bored and decided to call up Activision.

Developement budgets are too high because the vocal MINORity wants graphics, not Acstetics, Games are overpriced, and the biggest groups in the industry started bleeding all they could out of brand recognition. Combined, this has lead to over-saturation and minimal variation in games.

and you know what? I still see Starcraft in every local superstore in my area, what does that tell you?

crazyrabbits:
I would love to see a pie graph showcasing the ratio of claims Pachter has nailed to the one's he's messed up on. I think it's safe to say the graph would be very lopsided.

General accuracy of economic analysts tends to be around 30%, if memory serves.

It's also curious as to how exactly it's not worth a mention that the still on-going rise of digital distribution is partly responsible for declining retail sales.

Sparse? I don't know who creates these comments.

It's hardly sparse. I just like that it's not super-saturated like other years where I'm still working on a backlog. I am glad there is a slow down long enough to get the gaming that I want in.

The last sentence of the article is one of the main reasons games sales are down. People don't enjoy buying a game, then spending another $20-$40 on all its add ons over the next year. A lot of people if they really want the game will wait until its bundled. A lot more will forgo buying a game with so many extraneous expenses altogether in favor of a game that actually delivers a finished product for the regular asking price.

Bottom line, if you released games that people wanted, they would buy them. If you peg all your sales figures on getting people hooked on a serialized release, you had better make damn sure that each episode is as good or better than the previous.

If you expect to make most of your profit by unlocking content already finished and printed on the disc before release, please remove yourself from the gene pool at your earliest convenience.

I see the Pachter hunt is in full effect.

While it has been a pretty crap year for consumers, anything from Michael Pachter holds little to no ground.

I would like to put forward a request for a new meme:
"Michael Pachter a man you shouldn't trust to tell you there is a zombie invasion even if one is eating your face."

OT: the funny thing is that everybody keeps saying digital distribution is "on the rise," and at "all time highs" the thing is we don't actually know how well gameX does through digital distribution because Microsoft, Sony, Nintendo, Apple and even Steam wont tell us how many copies it has sold, and all we have to go on in profit numbers, and then presume that it is only because of digital distribution. I would like to see some level of transparency in the digital distribution field. I mean these companies that host digital distribution sales don't even tell the game developers how many of what tittle sold (unless you notch), and all they can do is get rough estimates of their sales by calculating the money they got from 70-80% Net30-60 which gives you a ball park that could still be foul.

I mean, Black Friday will move units. But pretty much everyone this console generation has gotten savvy with their game shopping. We all know new titles around this time will be on sale Black Friday. Hell, even after Christmas sales help gamers pinch pennies. Just smarter shoppers combined with hard times.

Kmadden2004:
[Starts reading]

Analyst Michael Pachter believes...

[Stops reading]

But then how will you know what will happen?

/sarcasm

I suspect he is right about lower sales during this Christmas period, but not for the reasons he's saying.

toapat:
No one wants Call of Duty or Battlefield because they are not interesting.

[Citation Needed]

Do you think that every new iteration of Call of Duty breaks numerous sales records because people are somehow tricked into buying something that they hate for being bland year after year?

Besides Creed 3, Blops 2 and Halo 4, there aren't any real zingers coming up. Lots of sequels, re-releases, and whatnot. Besides Dishonored, which comes out...well today technically (2:30 am EST) the only game coming out that I've seen not part of an established franchise is the Sony Super Smash Bros, and that's just combining lots of franchises together...the new IP is a dying breed, and eventually I'm sure all we'll get is crummy sequel after crummy sequel. I love some of them, even have guilty pleasures like Cod and Madden, but this getting just fucking ridiculous. Maybe a slow year will have a lot of new franchises showing up on the big stage rather than next years giving us Halo 5, Creed:Rooftop jumper, Battlefield 4, and Duke Nukem: For the Longest time, with Street Fighter v. Soul Caliber also the big names...though I'll be a hypocrite and say a new Metroid 1st person game would be quite nice, even if it's on the Wii U and not made for GC like the best one was (Prime 1)

Kmadden2004:
[Starts reading]

Analyst Michael Pachter believes...

[Stops reading]

Yeah, this basically sums up my thoughts on this article. I've read enough of the steaming turds this guy has churned out to know not to put too much stock into anything he says.

I always hate it when analysts like this talk about drops in sales, but never discuss the proportion or how much it makes a difference. If a company makes $10 million in profit one year and $9 million the next, then yes, they made 10% less, but they still made $9 million in profit, so it's hardly something to get worked up about.

Is actual store retail still a thing? I haven't seen a gaming store in AGES. And I live in Munich, which is not a small city, but, well, European. Maybe that's the difference.

Most of the things I buy are either digital downloads or from Amazon.

Monsterfurby:
Is actual store retail still a thing? I haven't seen a gaming store in AGES. And I live in Munich, which is not a small city, but, well, European. Maybe that's the difference.

Most of the things I buy are either digital downloads or from Amazon.

I can leave a gamestop, cross the street, enter the mall, and go into another gamestop.

Or I can leave that gamestop, cross the parking lot behind it, and go into Toys-R-Us.

Or I can leave that first gamestop, cross a different street and go into target to get the same game. It's kind of weird.

Stop lying out of your analystic ass, Pachter. The reason why ONLY THE DEVS want a next generation is because this way they can keep their backwards assed logic going of only releasing new and inovative IP's at the start of a generation. Sony shouldn't even want to have a next generation any time soon because they're finally making a profit on the PS3's ffs.

I refuse to believe that devs want the next generation because they're bored and therefore can't cook up something new. Because then I'd want these guys fired.

Maybe the long console generation has been like this on purpose so used game retailers go out of business.

Kopikatsu:

toapat:
No one wants Call of Duty or Battlefield because they are not interesting.

[Citation Needed]

Do you think that every new iteration of Call of Duty breaks numerous sales records because people are somehow tricked into buying something that they hate for being bland year after year?

I think he meant Cod/MW clones and probably missed a word. Otherwise what he's saying makes no sense especially in the context of the rest of the post and what I said.

Admittedly, I can't stand CoD, what its success has done to gaming, and would gladly play Painkiller or HL2 again than the newest CoD, but I know those brands sell. Meanwhile, the shitty half-baked cash-ins coming out of smaller studios.. and sadly Japan.. just bomb and there's certainly a lot of them.


>Micheal Pachter

Not even once.

"We expect the publishers to address the "problem" of free online multiplayer with evolving business models, adding increased opportunities to purchase virtual items, creating subscription-only serialized content, and adding premium subscription layers to the free offerings currently provided."

or

"We expect publishers to invent ways to wring more money out of gamers, free content is just an inconven- err i mean problem"

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