According to a research note from Wedbush Securities analyst Michael Pachter to investors, game sales dipped 20 percent on the weakness of current generation sales in the month of January. Pachter is making his predictions ahead of the NPD Groups' retail report for the month of January. When those numbers are released on Thursday, Pachter says that they will show that retail software sales fell 20 percent in January to around $300 million - down 20 percent from the $373 million generated in the same period a year ago.
Pachter added that new console systems (Xbox One, PS4) are being affected by ongoing hardware constraints (not enough supply to meet demand). This, he claims, is causing many consumers to delay their purchases of next-gen systems.
Wedbush is expecting hardware sales of 350,000 Xbox One units and 375,000 PS4 units, with the Wii U moving just 60,000 units. Pachter also predicts that the games that drove sales at the end of last year will be driving software sales in January. Those titles include Call of Duty: Ghosts, Battlefield 4, various EA Sports' titles, Assassin's Creed IV: Black Flag, Just Dance 2014, NBA 2K14 and GTA V.
"In a nutshell, we think that the rapid ramp in sell-through for next generation consoles will cause an unprecedented ramp in next generation software sales, and notwithstanding current generation software sales weakness, we expect overall industry software sales to rebound into positive territory later this year. We believe this rebound is not only sustainable, but we expect it to be dramatic in the back half of the year, with double-digit gains expected," said Pachter.