Holiday Shopping: Analysts Speak Up

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NPD Group: People won't buy consumer electronics.
This is the economy's worst nightmare: people not buying stuff for the holidays. The NPD bases its pessimistic outlook for the holidays on the argument that "no innovative must-have hardware this holiday [...] there is little incentive for most consumers to replace or upgrade."

Keep in mind, Kinect-early-adopters, that the NPD is looking at consumer electronics besides video game consoles -- like flat-panel TVs and notebook PCs. People are starting to think of consumer electronics like those as household goods like dishwashers, not a luxury good they can skip out on. This means that they'll buy an older model cheaper, use it 'til it dies, and not run out to buy the new hotness that is technology every year.

Something else the NPD pointed out are stubborn price points. The research firm predicts that we probably won't see huge cuts in prices even for Black Friday because companies can't afford to budge.

Cowen & Company: ...But they would, if companies cut console prices.
Just because companies don't want to cut prices doesn't mean consumers aren't into it. According to Cowen & Company's 2010 Video Game Survey with details from analyst Doug Creutz, there's a $30 gap between what consumers are willing to spend on Xbox 360s, PlayStation 3s, and Wiis and what their respective manufacturers are willing to sell for. Creutz said that by keeping the price tag high, Microsoft and Sony are hindering demand for motion controllers among non-owners and prospective buyers.

As part of that same survey, Cowen & Company also said that consumers would really rather buy new games as opposed to used ones. This doesn't sound so hot for GameStop at the moment, but the company's big push for downloadable content sales might help them get off the used game sales sauce.

DFC Intelligence: PlaySation 3 will outsell Xbox 360. Maybe. Possibly.
This one comes a little out of left field as the actual prediction applies to 2011 and not this holiday. Holiday sales, however, will prove DFC right or wrong based on whether or not the PlayStation 3 can pull ahead of the Xbox 360 for the number two seller spot under the Wii. The research firm apparently offers no concrete evidence for its prediction, but everyone is watching the Kinect-Move arms race for clues. Remember, Kinect hit 1 million in North American and European sales within 10 days, while the Move took about a month to accomplish the same feat in just North America.

The only reason you care about any of this is that you're a stockholder in Sony, Nintendo, Microsoft, or GameStop (and maybe Best Buy). If you're not, you might still learn something about how the video games industry slots into the economy based on how analysts talk about it because ostensibly they are an objective third party. If nothing else, you might find these stories are good places for console fanboy flame-baiting -- especially that DFC Intelligence one.

This story, "Holiday Shopping: Analysts Speak Up" was originally published by GamePro.

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