Analyst says new consoles needed STAT



Posted by Trent Nouveau

The industry can no longer afford to wait for the next generation of consoles.



Indeed, US retail sales of video games have clocked up embarrassing declines in the double-digits throughout 2012. 



According to Wedbush Securities analyst Michael Pachter, new consoles from Microsoft and Sony are desperately needed to give jumpstart the flagging industry.



Perhaps most worryingly says Pachter, is the launch of Nintendo's long-awaited Wii U won't be enough to reverse the serious damage incurred throughout the year. 



"We expect October - December to be relatively flat, and expect a return to negative territory again next year, at least until the launch of a next-generation console from Microsoft or Sony," Pachter explained in an industry note obtained by EuroGamer.

"A new console cycle is likely to reverse the negative sales trends of the last several years, with next-generation consoles expected from each of the three manufacturers over the next 18 months. Nintendo will launch the Wii U on November 18, and, while neither Sony nor Microsoft has yet announced new hardware, we expect a PS4 no later than November 2013, and a next Xbox no later than March 2014."



Pachter also noted that while competition from social and mobile games hurt packaged goods sales over the last three years, they should ultimately help expand the market for console games over the long run - even if the handheld games space is projected to erode.



"We expect the publishers to address the 'problem' of free online multiplayer with evolving business models, adding increased opportunities to purchase virtual items, creating subscription-only serialized content, and adding premium subscription layers to the free offerings currently provided," he said. 



In any event, Pachter believes next-gen consoles will sell quite quickly, even if they are only a "modest improvement" over current systems, as publishers are planning "big lineups" for new systems from Microsoft (Xbox 720) and Sony (PS4).  


"We believe that the publishers plan an unprecedented number of new games for launch in the first two years of the next generation, providing relief from the gamer fatigue we've seen over the last three years," he added.