Analyst Predicts Slowdown in Videogame Sales

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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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