Retailers that have experienced a prolonged slump in video gaming sales due to the extended absence of new devices, are hoping that Sony’s PlayStation 4 and Microsoft’s Xbox One will bring more sales to what would most likely be the slowest Christmas shopping season in years.
Seven years ago Sony showed its PS3 console which attracted huge interest. Since then retailers have suffered from a decline in sales. From 2008 to 2012, annual sales in the US gaming market fell 38% to $13.2 billion, said Paul Raines, chief executive of GameStop, a US-based video games chain whose sales dropped in each of the past nine quarters mainly due to the lack of new consoles and fresh game titles that accompany them.
According to analysts that should change this year as the hype about revamped consoles is building each day. Retailers including, Best Buy, as well as mass merchants Amazon, Walmart and Target, should benefit from the change, analysts said.
“Consoles and software have been a wind in the face of these companies for several years and now they’re switching into a tailwind. That is doubly powerful,” said to Financial Times, David Schick, analyst at Stifel Nicolaus.
Phil Samuels, category director for consumer electronics at Currys & PC World in the UK, shared: “We believe the Xbox One and PS4 will revolutionize the market.” He said shoppers had already put in more pre-orders for both than expected.
The Xbox One will be released this Friday. Sony said it sold a million PS4s on its first day last week.
Retailers have over-reacted before the launch of new consoles before. Such is the case with sales of Nintendo’s Wii U, launched last year, which disappointed retailers with poor sales.
GameStop will report results for the quarter to the end of October on Thursday. It said it expected to end its run of falling sales in the period – before the new consoles came out – thanks to new game releases including Grand Theft Auto 5.
Toys R Us has blamed several quarters of falling sales on the weakness of the entertainment business, which includes video games. It has put the two new consoles on its Holiday Hot Toy List for 2013.
The 15 analysts polled by CNN Money offering 12-month price forecasts for GameStop Corp. have a median target of 61.00, with a high estimate of 75.00 and a low estimate of 46.00. The median estimate represents a 16.32% increase from the last price of 52.44.