Analyst: Retail Game Sales Will Be Down 26 Percent in 2012

Packaged goods sales in the United States will drop 26 percent in 2012, according to analyst Doug Creutz of Cowen & Company. Creutz says that double digit declines in the sale of video games at retail are likely to continue all the way to the end of 2012 due to the tail end of the life cycle for the PS3 and Xbox 360 console, as well as the continued weakness related to the Nintendo Wii.

"We believe double digit year-on-year software declines are likely to continue through the remainder of the year due to continued Wii weakness and the waning 360/PS3 cycle, though we do expect the pace of declines to moderate somewhat in Q4 with the fall release slate, the launch of the Wii U, and relatively easier comps," he said. "We project that total US packaged good video game sales will decline 26% year-on-year in 2012."

He went on to say that AAA titles are not "dead" using EA's NCAA Football 13 as an indicator. He predicts retail sales of that game will be roughly the same as they were with last year's game.

"We believe this is an important contraindicator to the prevailing thesis that 'AAA is dead'; we believe that if demand for high-quality AAA games was truly on the wane, it would almost certainly show up in EA's annual sports titles."

Source: GII

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