Lazard Capital, an investment and analyst firm, has given its view on how the next-gen game consoles and related software sales performed during 2006. According to Colin Sebastian of Lazard, data indicates that the Wii will surpass sales estimates, while the Xbox 360 and PS3 are performing according to schedule. Sebastian noted, "Our checks indicate that Nintendo’s Wii console continues to sell well, while Sony PS3 supplies improved somewhat towards the end of the holiday period. We believe Microsoft’s Xbox 360 is on track to reach our 2006 sales estimate of 4.5 million units in the U.S., while Nintendo’s Wii will likely exceed our original 1.2 million unit target. Our estimate for PS3 sales in the U.S. for 2006 remains 700k units."
During last month’s Christmas holiday shopping rush, the biggest sellers were represented from a wide range of genres–from war to wrestling titles. Among the top selling games were Guitar Hero 2, WWE Smackdown vs. Raw 2007, Call of Duty 3, Legend of Zelda: Twilight Princess, and Gears of War. Additionally, two titles which appeared on the Wii and PS3 were noted by Lazard. "We also believe that Red Steel (Wii) and Resistance: Fall of Man (PS3) were among the top sellers on the two new console platforms."
Overall, video game sales were on the upswing in 2006. Sales of game software have been on a precarious downward slide since the Christmas season of 2005. Sebastian said, "On a year-over-year basis… analysis suggests that software sales increased approximately 5%, driven by incremental sales of next-generation software (Xbox 360, Wii, and PS3) and ongoing solid Sony PS2 and Nintendo DS game sales. Year-to-date through November, software sales increased 6.7%, slightly ahead of our 2006 growth estimate of 5.5%."
The report by Lazard Capital indicates that the game industry has finally turned the corner from its seemingly unstoppable course towards the rocky shores of deficit and red ink. But the good news isn’t entirely driven by the positive numbers accrued by next-gen hardware and software sales. Machines such as the PS2 and Nintendo DS continue to generate extremely healthy sales numbers. While the machine technology is older, the game software–and price tags–for these systems continue to attract consumers. If there is anything for the game industry to learn from this past year, it’s this: good games sell game machines–not the other way around.
