Poor game sales figures
have been plaguing the industry for a while, and analysts are lowering their expectations for 2005 and 2006 sales based
on the recent slump. According to SG Cowen, total software sales have been on the decline for months, with a decrease of
at least 19% a month for the last three months; despite attributing this to people holding off on purchases until after
the 360 launch, figures haven't picked up in December and so many games companies' yearly estimates are being lowered
as a result. The knock-on effects to consumers might not be felt for a while, but predictions for the new year look pretty grim. Activision is SG Cowen's preferred company -- despite lowering their revenue estimate, the analyst feels that Activision has "strong and improving game quality, expected margin expansion, and attractive valuation". Good news for Activision, less good for the rivals SG Cowen also deals with -- EA, THQ and Take-Two.
