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led by new release Ubisoft’s Far Cry 3 (360, PS3, PC) and a slew of high-profile recent releases, including Call of Duty: Black Ops II, Halo 4, and Ubisoft’s Assassin’s Creed III and Just Dance 4. Other top performers will likely include Activision Blizzard’s Skylanders: Giants and EA’s Madden NFL 13.
We expect hardware sales of 675,000 Wii U units in its second month (up 59% month-over-month), 500,000 Wii units (down 53% year-over-year), 1,700,000 Xbox 360 units (down 2% y-o-y), 900,000 PS3 units (down 5% y-o-y), 600,000 DS units (down 7% y-o-y), 1,140,000 3DS units (down 29% y-o-y), and 300,000 PS Vita units. In addition to software sales weakness, hardware trends continued their weak pattern in November. Unit sales were down y-o-y for every platform for a twelfth consecutive month (except the DS in November and the 3DS, which showed positive growth earlier in 2012), notwithstanding price cuts for nearly all models over the last year or so and a slew of appealing holiday bundles.
After an underwhelming start for the Nintendo Wii U (with a very low software attach rate), we expect packaged goods weakness to continue for the next year or so, albeit with intermittent reversals. December and January software sales will likely continue a streak of declines, with significant rebounds in February (led by EA’s Crysis 3 and Dead Space 3), March (from Microsoft’s Gears of War: Judgment and Take-Two’s BioShock Infinite, among others), and in the launch month of Take-Two’s Grand Theft Auto V (a spring release). We do not expect sustained growth until 2014, when new consoles from Sony (likely in the fall of 2013) and Microsoft (likely year-end 2013 or early 2014) have both launched. We expect the nextgeneration consoles to sell through very uickly due to a dedicated hardcore audience. Also, the publishers will likely plan an unprecedented number of new IP launches in the first two years of the cycle, providing relief from gamer fatigue.
Michael Pachter is an analyst at Wedbush Securities.
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