Analyst: Video Game Market Will Decline by 5 to 10 Percent

Colin Sebastian, who is an analyst watching the video game market for Lazard Capital, has said in a research note that he expects the NPD Group numbers that will be released shortly to show a decline in the revenue derived from video game hardware and software for the month of February.

The decline will be between 5 and 10 percent if compared to the same period in 2010 when overall sales reached 634 million dollars.

February 2010 saw strong sales of BioShock 2, the first-person shooter from 2K Games and its Marin studio and also a good performance from Call of Duty: Modern Warfare 2, from Activision and Infinity Ward.

This year, February saw less big releases on the video game front, and a decline in hardware sales is also expected.

Michael Pachter has already predicted that the Xbox 360 from Microsoft will be the best-selling console of the month and that the PlayStation 3 from Sony will edge out the Nintendo Wii.

Colin Sebastian says that, for the entire 2011, he expects a “mid-single digit decline in packaged goods software sales contrasted by a 25-30 percent increase in online/social/mobile game sales.”

The analyst has predicted that Homefront, the upcoming first-person shooter from developer Kaos Studios and publisher THQ, is expected to sell 1.5 million units in the United States in March, after it comes out at the middle of the month.

Sebastian also says that there's a very good initial reception for the information that DICE has been offering on its shooter Battlefield 3, suggesting that the end of the year launch might be one of the most successful of the year.

Michael Pacher has also predicted that Microsoft, which will continue to see good performance for the Xbox 360, will cut the price of its home console at some point during June, forcing Sony and Nintendo to follow its lead.