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GameStop Corp. Message Board

  • techaa2001 techaa2001 Dec 13, 2002 11:15 AM Flag

    Mgt. won't give you any info but I will

    Dow Jones Business News
    Goldman Analyst Says Video-Game Growth Is Slowing
    Friday December 13, 11:07 am ET

    NEW YORK -- Video-game stocks took another hit Friday after an analyst at Goldman Sachs Group Inc. (NYSE:GS - News) downgraded the group, citing concerns about slowing industry growth in 2003.
    Goldman analyst Chris DeBiase downgraded Activision Inc. (NasdaqNM:ATVI - News) , THQ Inc. (NasdaqNM:THQI - News) and Electronic Arts Inc. (NasdaqNM:ERTS - News) , to "underperform" from "in-line" and placed a cautious view on the sector. Citing NPD Group data released Friday, Mr. DeBiase said November sales of $712.5 million came in worse than expected at 7.3% year-over-year growth, well shy of his expectation for 20% to 25% growth.

    Mr. DeBiase said in a research note that he took into account that the anniversary of the 2001 launch of Microsoft Corp.'s XBox and Nintendo's GameCube happened in November. He also noted that the calendar is shorter this holiday season than last year. However, the growth is still "well below" expectations, he said.

    The NPD data also indicated that November hardware sales were down 12% from last year, with only Sony Corp.'s Playstation 2, launched in 2000, being the bright sport with sales up 45% at 1.3 million units, the note said.

    Electronic Arts Chairman and Chief Executive Larry Probst said Thursday that the price of both the XBox and PS2 could drop to $149 from $199 by the middle of 2003. A large base of hardware should lead to more sales of video games, he added.

    Mr. DeBiase reiterated that in 2003 he expects the video game industry to contend with continued weak consumer spending, slowing hardware sales and pricing pressure on software.

    Earlier in the week, a UBS Warburg analyst downgraded the video game stock in his group, saying he expected the stocks to tread water in the next two years as the current business cycle runs. The stocks continued to take dips during the week ahead of the NPD data.

    Shares of Electronic Arts were down $3.90, or 6.3%, to $57.45 in morning trading. Activision was off 79 cents, or 4.7%, to $16.03, while THQ was up 41 cents, or 2.8%, to $15.04. All trade on the Nasdaq Stocks market.

    - Dwight Oestricher, Dow Jones Newswires; 201-938-5266; dwight.oestricher@

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