Games Industry To Shrink in 2006?

Gamedev.net reports on an analyst forecast for the game industry's 2006 health. A previous analysis that the industry would have continued growth through the year is 'out the window', with forecasters judging this to be a slow year for game purchasing. From the article: "Pachter notes that during the three-month period leading up to the heavily anticipated November 22 Xbox 360 launch, console and PC software sales in the US were down 21.6 percent. Believing that consumers were holding off on making current-generation purchases in favor of waiting for next-gen products, Pachter thinks it's a trend that could repeat itself, specifically when Sony announces a launch date for the PlayStation 3. Currently Pachter expects that system to arrive in October, meaning the industry's transitional slump could last until late 2006"

Comments

Has anyone mentioned multi-year trends?

[The-Bus]

It only takes a journalist with half a brain to do a little bit of research: 2005 was bad because 2004 was great, especially the fourth quarter. Think of it: Halo 2, GTA: San Andreas, World of Warcraft, Doom 3, Half-Life 2, not to mention The Sims series. And the first three all came out at the end of Q4 2004.

Another effect, especially on the fourth quarter, is EA buying out the NFL and Players Inc. killing off Sega's NFL2K series. The result? In 2004, Madden '05 sold approximately 4.1MM units for the PS2 and Xbox (2.9 and 1.2 respectively). In 2004, NFL2K5 sold about 2.5MM units (albeit at a lower price). In 2005, Madden '06 sold somewhere around 4MM units, more or less, basically letting EA shoot the video game industry in the foot.

Who knows if the negative media attention on video games had anything to do with it? I don't think it prompted any changes among Slashdot (or, say, Penny Arcade) readers, but who knows if some parents maybe cut out some purchases and tried to go a more wholesome route this year?

And why doesn't anyone talk about multi-year trends. It seems a bit ridiculous to forecast some sort of overall collapse based on a single quarter's results.