Pachter: Xbox One and PS4 launch means 'disappointing' holiday sales for Activision and EA
Many investors are under the impression that the launch of the Xbox One and PlayStation 4 this month will boost video game sales. While the release of these two next-gen systems should boost hardware sales, it's the software that could take a hit, according to industry analyst Michael Pachter.
Speaking to CNBC, Pachter explained that the launch of the PS4 and Xbox One -- priced at $400 and $500, respectively -- will drain the wallets of consumers. The high price points for each console means early adopters, "the same guys that buy Call of Duty," will have less money to spend on the actual games.
"We haven't had a console transition like this in the past," Pachter explained. "We've got two big consoles launching at two pretty high prices. And I think the wallet drain is going to be huge because neither Microsoft nor Sony wants to give an inch to the other."
According to Pachter, the launch of next-gen systems will hit both Activision and EA at the margin. "I think we're going to have disappointing sales for those guys," Pachter said, before adding that he thinks "they're going to turn it around in the March quarter."
While EA's signature shooter, Battlefield 4, launched last week we've yet to hear any specific sales numbers from the publisher. Meanwhile, we're all eagerly anticipated the launch of Activision's Call of Duty: Ghosts, which releases tomorrow, November 5th. Last year, Call of Duty: Black Ops 2 earned $1 billion in worldwide retail sales in just 15 days, but it didn't have next-gen consoles to compete with.
Some consumers may opt to wait for the next-gen versions of these games. Both Battlefield 4 and Call of Duty: Ghosts will be available at the launch of the Xbox One and PS4. And while both games include some sort of upgrade plan from current to next-gen, some believe current-gen version sales will be somewhat lower than in the past.
Pachter did add that he believes EA may be the better buy due to a "much clearer path to revenue growth," while Activision's major franchises are "vulnerable to competition." Pachter believes there's room for Activision to "fall of its perch" due to competition from both Battlefield and Disney Infinity, two titles that can compete with Activision's Call of Duty and Skylanders franchises.
Do you plan on purchasing a next-gen console and either Battlefield 4 or Call of Duty: Ghosts?