That’s the conclusion of Goldman Sachs analyst Sarah Friar. In a research note Thursday morning, she forecasts that Microsoft will ship 4.2 million copies of the new game into the channel in September, generating an estimated $170 million in revenue for the company. Friar thinks that is a conservative estimate, and that the actual total could be as much as $50 million higher.
Friar notes that the retail price for the standard version of the game will be $59.99, up from $49.99. She also says her estimate on the number of consoles installed “could be conservative,” and says Xbox 360 sales could get a boost in the fall from both the release of Halo 3 itself, and from “a potential price cut” for the console, “perhaps in sync” with the game’s debut.
Friar says her base case for the game “pushes the segment into slight profitability for the quarter.”
Friar says the game has been timed to come out about a month before the October 16 launch of Take Two’s (TTWO) launch of Grand Theft Auto 4. “We believe the availability of Halo 3 before the launch of GTA4 is a strategic play by Microsoft to increase sales of Xbox 360 and to take sales away from Sony’s (SNE) PS3,” she wrote.
In our view, the audience for Halo 3 largely overlaps that of GTA 4, and thus a consumer purchasing Halo 3 will likely buy GTA 4 for Xbox 360 as well. Microsoft also needs to launch Halo 3 about a month ahead of GTA 4 in order to mitigate competition between the two titles and allow time later in the fall for other titles to launch, a more partner friendly strategy.
Friar repeated her buy rating and $36 price target on the stock.
