via Eurogamer

Wedbush Morgan analyst Michael Pachter has forecast that the NPD sales data for May will show a year-on-year increase in game sales of 16 per cent to reach USD 333 million.

According to Pachter, the rise will be driven by sales of titles such as Pokémons Diamond and Pearl, Guitar Hero II, Spider-Man 3, Shrek the Third, Forza Motorsport 2 and Mario Party 8.

With regard to hardware sales, Pachter estimates sell-through of 400,000 Wii, 225,000 Xbox 360, and 100,000 PS3 systems - predicting that Nintendo's next-generation console will outsell Sony's by a factor of 4:1.

"Most of the major US publishers reported solid March quarter results, with each forecasting at least 10 per cent growth in 2007," said Pachter.

"We expect sales growth in May after a relatively weak April. Notwithstanding the decline in April, US software sales are up approximately 20 per cent year-to-date, and we expect sales growth of 18 per cent for the full year."

Pachter said higher than average console prices will continue to be an impediment to sales. "We expect cycle-to-cycle declines of 10 per cent or more for hardware sales to persist through the end of summer 2007," said the Wedbush analyst.

"It is possible that Sony’s cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 and Xbox 360 before the holidays."

Pachter went on to state that he expects PS2 software sales strength to persist throughout the rest of the year, thanks largely to licensed film-themed games released between May and July as well as sales of those games during the holiday season when the movie DVDs are released.

He concluded, "We expect major share price appreciation for the major video game publishers by the end of the year as the next-generation console cycle is in full swing, and recommend that investors accumulate Activision, Electronic Arts, GameStop, THQ, and Ubisoft shares at current levels."