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Game publishers see hope for holidays

Three top video game publishers have said their holiday sales are going well even though Wall Street had a poor outlook for the industry's season.
/ Source: Reuters

Three leading video game publishers said on Wednesday their top titles are selling well, brushing off gloomy Wall Street outlooks about the industry’s performance during the crucial holiday shopping season.

Since the beginning of November, shares of major game publishers have dropped, as investors worry about signs of weak sales and wonder if the industry can keep up with double-digit growth projections.

During that period, the stock of industry leader Electronic Arts Inc. has plunged about 17 percent, Take-Two Interactive Software Inc. is down about 29 percent, Activision Inc. have lost about 2 percent, and THQ Inc. has dropped nearly 16 percent.

“We’re sort of halfway through the holiday season, I think there was a lot of misinformation” about earlier holiday sales, EA Chairman and Chief Executive Larry Probst said at a UBS media conference in New York. He described sales thus far as “pretty good.”

Probst and others suggested this season is different from a year ago, citing the lack of both a blockbuster game -- like 2002’s “Grand Theft Auto: Vice City” -- and a price cut on Sony Corp.’s market-leading PlayStation 2 console.

Probst also joked that a warm introduction from UBS games analyst Mike Wallace was the only nice thing he had heard from analysts in recent days.

EA holds a dominant position in the games industry, generating more revenue in the December quarter than its closest competitor does in an entire fiscal year.

Activision Chief Executive Bobby Kotick said the company’s key holiday titles -- “Call of Duty,” “Tony Hawk’s Underground,” and “True Crime” -- were strong thus far.

“Each of these three products ... is performing well for us,” Kotick said.

He also addressed retail demand, an issue that worried the industry heading into the holiday season. This time last year, Activision and several other publishers issued warnings about their quarterly results after sales shortfalls that they blamed on cautious retail ordering patterns.

“I can’t say that we’re seeing the retail climate very different this year than last year,” he said. “This year I think they’ve been more thoughtful up front. The retailers seem to be fairly organized, from our perspective, this year, and a little bit less reactive than last year.”

THQ Chief Executive Brian Farrell, also presenting at the UBS conference, did not talk about the current holiday season but did say the company was having success with two key titles it shipped in October, “WWE SmackDown: Here Comes the Pain” and “Tak and the Power of Juju.”

He said that more than 1.5 million units of the WWE title, a wrestling game for the PlayStation 2, had been shipped since it was launched. As for Tak, Farrell did not offer figures but said the company was “very pleased” with the sales to date.