What Gaming Investors Need To See Before Earnings

In a report rolled out Sunday, analysts at Wedbush provide a preview of the March 2015 results for the entertainment software industry. The analysts are expecting another month of console/handheld software sales growth (same as January and February), driven by "new releases and a manageable comp." Wedbush's note comes in anticipation of NPD's release of its March 2015 U.S. retail video game software sales report, on Thursday. The analysts expect console/handheld software sales growth of 2 percent, year-over-year, to $415 million, driven by a several recently released high-profile games like Electronic Arts Inc.'s EA Battlefield Hardline, Sony Corp (ADR)'s SNE Bloodborne, Take-Two Interactive Software, Inc.'s TTWO Borderlands: The Handsome Collection, Activision Blizzard, Inc.'s ATVI Call of Duty: Advanced Warfare, and Nintendo Co., Ltd (ADR)'s NTDOY The Legend of Zelda: Majora's Mask 3D. Other growth drivers mentioned are next-gen strength, "a manageable comparison of down 7%," and an early Easter. The aforementioned positive factors "should offset a solid release slate last year (…) and the sustained decline of current-gen. The shift to digital downloads and the popularity of bundles should also negatively impact stand-alone packaged goods software demand." The analysts at Wedbush assume that "full game digital downloads were 10% of total March demand for each high-profile game on next-gen consoles, meaning total console software sales were likely up 10% or more when factoring in full game digital downloads. Sales should be up m-o-m due to an extra week in the March retail month." Hardware sales are also expected to increase to "350,000 Xbox One units (up 12% y-o-y), 400,000 PS4 units (up 8%), and 100,000 Wii U units (up 45%)."