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Janco Partners Says GTA IV Is a Killer App

Likely to sell more than 5 million in the opening week

Apr 2, 2008 20:06 GMT  ·  By
Will GTA IV push the games industry into greater profits?
   Will GTA IV push the games industry into greater profits?

Janco Partners is seeing the videogame industry as one of the few in the United States that is not currently affected - and will not be affected - in the future by the economic downturn that's currently in full swing. According to Mike Hickey, analyst with Janco, the company estimates that gaming software sales, which are mainly made up of videogames, will rise by around 20% in 2008 as opposed to 2007. And considering that 2007 was a good year for game, this surely means that 2008 will be great year for games.

Hickey stated: "We [Janco Pertners] are modeling for the video game industry to grow significantly in 2008. While we are cautious over the potential implications of a weakening domestic consumer, we believe recent next-gen console price cuts, market share gains, killer content releases (Halo 3, GH III, Rock Band, GTA IV, etc.), new store openings ... will continue to fuel strong financial performance. We are currently projecting 20% domestic video game software growth." GTA IV is expected to be the strongest title released this year and the biggest revenue creator.

There's enough new content that will be released this year to make sure that gamers will have plenty of options to spend their money on. And the prices of hardware are expected to continue to come down, especially as companies like Microsoft or Nintendo resolve supply chain issues that have existed for the last few months. This year, both the PlayStation 3 and the PlayStation 2 will get price cuts that will make them more competitive than they currently are, while the Nintendo Wii will continue to grow on the back of its innovative control scheme. But overall hardware sales will grow by only 17%, mainly because of the higher costs associated with buying hardware.

Janco Partners also predicts that the used games market will have a strong growth period, as more and more gamers see real value in using older games to get refunds or reduced prices on new games. Game retailers such as GameStop are already aggressively implementing used game programs that will drive up activity in this sector.