Analyst Predicts Slowdown in Videogame Sales

Goldman Sachs analyst Robert Higginbotham has said that videogame sales have likely peaked for the year, despite stronger-than-expected numbers in March.

Higginbotham blamed the anticipated decline on the lack of any big releases in the second half of the year, according to a MarketWatch report, particularly when combined with the massive sales success of blockbuster releases at the end of 2007. "While the much anticipated release of GTA IV at the end of April is expected to produce record sales, and Wii Fit, slated for May, is also expected to be a blockbuster, the remainder of the year lacks any big releases, and comparisons get tougher throughout the year as we lap titles such as Halo 3 and Guitar Hero 3," he wrote in a note to clients.

He also downgraded videogame retailer GameStop to a sell rating as part of his report, even though the company saw its shares increase 30 percent in March. "We see GameStop shares as poised for a pullback as industry growth remains on a path toward deceleration from its current peak," he added. Higginbotham currently has GameStop shares targeted at $50, down from the current mark of just over $55 and well off its peak of $63 in December 2007.

March saw a 63 percent jump in sales to a total of $945.6 million, powered primarily by Nintendo's huge Super Smash Bros. Brawl release. Tom Clancy's Rainbox Six Vegas 2 and Army of Two also performed well over the month, despite ongoing concerns over the state of the U.S. economy.

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It's very easy for an 'analyst' to say things like that, the truth is, anything could happen. But it could well be that when the mass sales of GTA 4 come into play, the people that have had to save up for that very game won't buy another for a long while, admittedly there isn't a lot of games that look to be big-selling that are coming out soon.

Oh so they're wheeling out this prediction again?

Weak second half of the year?

Q3:
Spore
Fallout 3
Soul Calibur IV
Star Wars: Force Unleashed
Warhammer Online

Don't know about the 4th quarter of the year (i only listed those that i know i or my housemates will be buying), but it seems to me there are some fine games coming out in the second half.

I noticed the serious lack in any insanely hyped games expected for the second half of the year, it seems odd and I'm hoping that a few surprises come out of the woodwork over the summer months.

Oh, right, Spore! I suppose it had slowly become a utopian fantasy, but yeah... there is that. That should be a nice boost in sales.

Well, if the games suck who is gonna buy them? And if you don't get the word out, who's gonna know to buy them?

Frankly, the industry will continue to chug along, regardless of slumps or not, so I'm not too miffed. And for the 'no big releases out in the later half', he forgot Fable 2 and Mercenaries 2 (I myself am also looking forward to BiA).

- A procrastinator

I agree that it is difficult to say whether sales will actually be lower, but there is a noticeable lack of hype surrounding a lot of the late Q3 early Q4 titles.

I think we'll see a lot of the games mentioned hit the million mark, but the 3-4 million mark we saw from a lot of titles will be more elusive. Spore, Fallout 3, and Gears 2 will be the big three in terms of holiday sales.