Videogame Sales Unlikely To Feel Boost From Nintendo's 3DS

As videogame sales for the month of March are reported late Thursday, analysts say the launch of the Nintendo 3DS is unlikely to boost the results, given its launch late during the month.

Sales of game software and hardware in the U.S. will be reported Thursday afternoon by the NPD Group. Analysts expect sales of game software to show a decline of between 5% and 10% compared with the same month last year. High-definition consoles such as the Xbox 360 and PlayStation 3 are expected to show a gain in unit sales, while the Nintendo Wii is expected to decline from the same period last year.

Nintendo (NTDOY) is still expected to have a strong month, thanks to the release of two new "Pokemon" game titles for its older DS handheld console. The 3DS, which went on sale in the U.S. on March 25, may take a while to spur sales of game software, due to a limited initial installed base and what one analyst described as a lack of "killer app" titles.

"We think that the recent PSP price cut is bound to spur software sales in future months, and expect meaningful contribution from the 3DS in the middle part of the year, and from the NGP in the latter part of the year," Michael Pachter of Wedbush Morgan wrote in a note to clients this week.

Pachter was referring to Sony Corp.'s (SNE) price reduction on its older PSP handheld to $130 in February -- part of its preparation for the launch of a high-definition handheld console nicknamed the NGP that's expected late in the year.

Colin Sebastian of Lazard Capital said the 3DS launch likely provided some "incremental traffic" to retailers such as GameStop (GME). But he added that new consoles need a larger installed base to have a "meaningful impact" on software sales.

"Dragon Age II" for the high-definition Xbox 360 from Microsoft (MSFT) and PlayStation 3 consoles during the month, and Pachter said he believes each of those titles moved more than 400,000 units for the month.

Another new release expected to land in the top-selling ranks for the month is "Homefront," a combat shooter from THQ Inc. (THQI)

THQ promoted the title heavily prior to its March 15 launch, but disappointing critic scores caused a sharp selloff of the publisher's stock on the launch date. The company later reported that the game passed the 1 million mark in global sales in its first week; analysts believe the U.S. sales measured by NPD will likely surpass 700,000 units for the month.

Activision Blizzard (ATVI) is still expected to benefit from strong catalog sales of its popular "Call of Duty: Black Ops" title.

Doug Creutz of Cowen & Co. believes the sector will report improved sales results for the month of April, he said, due in part to strong performance of titles geared towards hard-core gamers on the 360 and PS3 platforms.

"We expect strong double-digit growth in software sales in April due to a positive Easter effect and a solid launch lineup, and believe growth could continue into the summer as the 360/PS3 cohort continues to gain share against other platforms," Creutz wrote Monday.

-Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com

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