Wednesday, November 15, 2006

Analyst: 150K-200K PS3s For U.S. Launch @ Next Gen

In a note to investors, Lazard analyst Colin Sebastian cited retail checks as the source for the figures.

Sony has said that it plans to ship 400,000 units to North America for the PS3’s launch day, with between 1-1.2 million shipping by the end of calendar 2006. Recently, however, mega-publisher Electronic Arts estimated 2006 PS3 North American shipments to be a substantially lower 500K-800K.

Sebastian estimated that Sony would sell around 750K PS3s domestically by year-end.

The analyst reiterated that consumers might substitute the Xbox 360 in lieu of the high-in-demand PS3 and Wii. Key Xbox 360 titles such as Gears of War and cross-platform PS3-Xbox 360 games could also accentuate this substitution effect in favor of Microsoft’s console.

Sebastian added that he expects the Wii to sell 1.2 million units in the U.S. by year-end.

He also said that videogame publishers in general will not immediately reap huge rewards from the launch of the PS3 and Wii this year. He wrote that Lazard anticipates less than 15 percent ($350-$400 million) of software sales to come from Wii and PS3, while more established systems such as the Xbox 360, PS2, DS and PSP will be key growth drivers for the holidays. Hardware manufacturers and retailers, however, will see a greater financial impact due to the launches.

The analyst also predicted strong videogame retail performance for November, backed by a significant uptake in advertising from Sony, Microsoft and Nintendo.

Finally, Sebastian noted that recognizable brands, namely EA’s Madden football franchise, will “dominate” software unit sales at launch. Madden in particular was a top five launch title for the PS2 (#1), Xbox (#5) and Xbox 360 (#2). At, Madden NFL 07 for PS3 and Wii is hovering around the number one and number five most popular pre-order slots per respective system.

Still, Sebastian wrote, “…With a disproportionate number of new consoles purchased in the launch window by ‘hardcore’ gamers and technology first movers, we believe that new properties also have the potential to sell well.”

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