Numbers 'Bode Well' for Game Makers Q4

We might travel less. We might eat out less. We might even go to the movies less. But one thing we’re simply not going to do as a nation if the economy turns down is play less Guitar Hero.

That’s an obvious conclusion from the latest video game sales data from market research firm NPD. In December, video game spending increased 30.9% year-over-year. Software sales were up 36% in the month. Hardware units were up 17%, including a 63% gain for the Sony Playstation 3, and a 123% rise in the perma-scarce Nintendo Wii. Xbox 360 was up 15% year-over-year, and 64% sequentially. Sales rose 54% for the Nintendo DS, and 11% for the Sony PSP.

Pacific Crest’s Evan Wilson says the numbers bode well for fourth-quarter results from the video game makers, although he notes that “2008 guidance isn’t as certain.” He sees 11.5% industry growth this year.

Here’s a rundown on some of the datapoints from the four key publicly traded software stocks:

• Activision (ATVI): Wilson notes that sell-through rose 86.4%, above his estimate of 80%, driven by Call of Duty 4 and Guitar Hero III. He notes that the company now has 17.7% market share, nudging past Electronics Arts at 17.3%.
• Electronics Arts (ERTS): Sell through rose 49.1%, beating Wilson’s expectation for 30% growth, driven by Rock Band. Other titles rose only 10.5% in December and declined 35 in 2007, he notes.
• Take-Two (TTWO): Sell through rose 4.7%, better than the 5% drop Wilson had expected. He says upside came from strong sales of Carnival Games and BioShock. Coming soon: the release of Grand Theft Auto IV.
• THQ (THQI): Sell through fell 9.7%, not as bad as the 25% drop Wilson had forecast. HE says MX vs. ATV sold better than expected, as did WWE Snackdown! vs. Raw, the favorite game of Shakespearian scholars.

Here’s a list of the top 10 video games for all of 2007:

• Halo 3, from Microsoft (MSFT) for the Xbox 360.
• Wii Play, from Nintendo, for the Wii.
• Call of Duty 4, from Activision, for the Xbox 360.
• Guitar Hero III, from Activision, for the Playstation 2.
• Super Mario Galaxy, from Nintendo, for the Wii.
• Pokemon Diamond, from Nintendo, for the DS.
• Madden NFL ‘08, from Electronic Arts, for the PS2.
• Guitar Hero 2, from Activision, for the PS2.
• Assassin’s Creed, from Ubisoft, for the Xbox 360.
• Mario Party 8, from Nintendo, for the Wii.