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IGN Gamermetrics 2007 Half-Year Preview IGN GamerMetrics 2007 Half-Year Preview Halo 3, Madden NFL 08 and Grand Theft Auto IV to Take 30% of New Videogame Releases in the Second Half of ’07 Issue No. 27 July 9, 2007 Table of Contents Executive Summary.............................................page 3 Surviving “The Big Three”................................ pages 4-5 Sure Things, Sleepers, & Disappointments..............page 6 2H07 Title Forecast (top 10 cross platform). ...... pages 7-8 2H07 Platform Forecast. ................................ pages 9-10 2H07 Publisher Forecast. ..............................pages 10-11 2H07 Genre Forecast. ..................................pages 12-13 2H07 Title Forecast (by Tier).........................pages 14-19 2H07 Title Forecast (by Platform). .................pages 20-26 2H07 Title Forecast (by Genre)......................pages 27-34 2H07 Title Forecast (by Publisher). ................pages 35-48 Notes...............................................................page 49 About IGN GamerMetrics....................................page 49 About IGN Entertainment ...................................page 50 contact: [email protected] confidential 2 Introduction Coinciding with this week's E3 Business and Media Summit in Santa Monica, we are pleased to announce the "IGN GamerMetrics 2007 Half-Year Preview," a comprehensive guide to the titles, platforms, publishers, and genres that are expected to have a significant impact on the U.S. videogame market during the second half of the year. Leveraging IGN GamerMetrics’ proprietary Mindshare metric, the report measures gamers’ awareness and purchase intent for over 300 videogame software releases during the next six months. Awareness data is based on the traffic patterns of the millions of monthly visitors to IGN.com, while purchase intent data is based on the activity of over 600,000 Club IGN users who regularly update their Wishlists, Email Alerts lists, and Collection lists. For the "IGN GamerMetrics Half Year Preview," Mindshare is relative to all titles scheduled to launch between July 1, 2007 and December 31, 2007 and is based on a 90 day period of IGN.com data ending on June 24th. Executive Summary 1. Halo 3, Madden NFL 08, and Grand Theft Auto IV to Take 30 percent of Sales for Videogames Releasing in the Second Half of ‘07 – historical data and IGN predictive models suggest that “The Big Three” could account for one third of all console new releases in the U.S. during the second half of the year. IGN GamerMetrics expects that Halo 3 will take home the prize of best selling title of the year, followed closely by Madden NFL 08 and Grand Theft Auto IV. 2. Which Titles are Well-Positioned to Survive the Impact of “The Big Three?” – Guitar Hero III, Super Smash Bros. Brawl, Assassin’s Creed, Call of Duty 4: Modern Warfare, and Half-Life 2: The Orange Box lead IGN GamerMetrics’ list of “sure things”. Pages 5-6 also include our lists for potential sleepers and disappointments. 3. Xbox 360 Lineup Has Plenty of Depth Beyond Halo 3, GTA IV – diverse mix of console exclusives such as Mass Effect, BioShock, Too Human, and Two Worlds should satiate gamers’ appetite for brand new games and provide a long tail of software sales. 4. PlayStation 3 and Wii Lineups Both Have Their Flaws – Sony is yet to provide gamers’ with that killer app for the PlayStation 3, and with the exception of Home, it looks like this will not come until early 2008. The Wii lineup, on the other hand, is extremely top heavy and does not feature the depth of content that might be required to reach the console’s expanding audience demographics 5. Super Smash Bros. Franchise Looks to Repeat Past Success – as the seventh ranked cross platform title and third ranked SKU, Super Smash Bros. Brawl is poised to repeat the success of Super Smash Bros. Melee, the best-selling GameCube title of all time. 6. Q4 Will Mark the Arrival of Another Must Have DS Title – The Legend of Zelda: Phantom Hourglass is scheduled to launch in October and is the runaway favorite to be the best selling DS title of the second half of the year. 7. Electronic Arts Ranks Head and Shoulders Above the Competition – publisher’s 2H07 lineup accounts for almost 20 percent mindshare on IGN over the last 90 days. Key titles include new installments of perennial sports franchises as well as Half-Life 2: The Orange Box, Army of Two, Need for Speed Pro Street, Medal of Honor: Airborne, & Rock Band. 8. Action/Shooter Titles Account for Almost 50% of Mindshare – With the exception of Halo 3 and GTA IV, a title releasing in these genres will experience tough competition regardless of platform. See page 13 for a map of the action/shooter market. contact: [email protected] confidential 3 Surviving “The Big Three” Halo 3, Madden NFL 08, Grand Theft Auto IV will account for at least 30% of new release sales in the second half of ‘07 As the videogame industry prepares itself for the biggest holiday season since 2004, there are a number of trends we can learn from to help pinpoint the potential winners and losers of the next six months. Within the U.S. console market, second half of the year releases have historically accounted for about 55% of software units sold between July and December and 35% of annual software units sold, which explains why publishers tend to wait until the holiday months to release their premium titles. A total of 85 million units were purchased for current and previous generation consoles during the second half of 2006, 46 million of which were new releases.* If you apply a conservative 10% increase in console software sales from last year, new releases will account for approximately 50 million units ($2.3 billion) in the second half of 2007. Chart 4a U.S. Console Market: New Release Sales vs. Total Sales U.S. Console Market: New Release Sales vs. Total Sales 120 120 106 96 106 93.5 100 96 93.5 100 85 83 85 80 83 80 60 60 49 60 50 60 49 47 46 50 47 46 40 40 20 20 0 0 Number of Units Sold (in millions) 2H03 2H04 2H05 2H06 2H07 (IGN Number of Units Sold (in millions) 2H03 2H04 2H05 2H06 2H07 (IGN estimated) estimated) So urce: IGN GamerM etrics, data pro vided by 2nd Half of the Year - New Releases Only So urce: IGN GamerM etrics, data pro vided by 2nd Half of the Year - New Releases Only The NPD Group 2nd Half of the Year - Total Units The NPD Group 2nd Half of the Year - Total Units One of the goals of the IGN GamerMetrics Half Year Preview is to highlight which titles will be able to survive the impact of Halo 3, Grand Theft Auto IV, and Madden NFL 08, and most importantly, which titles are in a good position to grab a healthy share of those 50 million units. The last time such a devastating trio hit the market was during the fall of 2004, when Halo 2, Grand Theft Auto: San Andreas, and Madden NFL 05 launched, marking the pinnacle of the previous generation of consoles. While 2007 will not be the pinnacle of the current generation of consoles, the historical success of these franchises can serve as a blueprint for how this year’s software market will unfold. In 2004, Halo 2 and the Halo 2 Limited Collector’s Edition combined to sell 4.3 million units in November and December of 2004.* Based on our internal forecasting models and the fact that the title will be launching two months earlier this year, we believe Halo 3 (including the Collector’s and Legendary editions) has the potential to eclipse the 6 million unit mark by the end of the year. * Source: The NPD Group contact: [email protected] confidential 4 Looking at the last four years of sales data, the Madden franchise has seen a relatively consistent level of sales ranging between 4.1 million in 2003 to 5.5 million units in 2006.* Sticking with the year-over-year 10 percent increase, we expect Madden NFL 08 will sell roughly 6 million units across all consoles by the end of the year. Grand Theft Auto IV, releasing on both the Xbox 360 and the PlayStation 3, is unquestionably the most difficult of the big three to forecast. In 2004, 5.1 million copies of Grand Theft Auto: San Andreas* were purchased for the PlayStation 2, however, the Xbox version did not launch until June 2005. This time around, the title is scheduled to launch simultaneously on the Xbox 360 and the PlayStation 3, with the Xbox 360 version favored to garner the majority of unit share. Taking into account installed bases, we expect the title will combine to sell upwards of 4 million units across the two platforms, with the Xbox 360 version outselling the PlayStation 3 version by a ratio of about 2:1. Cutting to the chase, the estimated combined sales for the console versions of Halo 3, Madden NFL 08, and Grand Theft Auto IV is at least 15 million units, leaving 35 million units for the hundreds of other titles to fight over. The following pages examine how the remaining major console releases are tracking with the IGN audience, including our picks for sure things, sleepers, and disappointments. The report also includes analysis of the top ranked platforms, publishers and genres of the second half of the year, detailed lists of the most anticipated console, handheld and PC titles, as well as a map of the crowded Action/Shooter market. Chart 5a Halo 3, Madden, & Grand Theft Auto IV to Take 30% of Videogame New Releases in Second Half of 2007 Over 300 titles will fight for the "The Big Three" will remaining 35 million unit sales combine for at least 15 million units Source: IGN GamerM etrics, data provided by The NPD Group contact: [email protected] confidential 5 *Source: The NPD Group Sure Things Beyond the big three, which titles are guaranteed to get their share during the second half of the year? As expected, there are plenty of perennial hits scheduled to hit the market during the next couple of months, but there are also some emerging new franchises to keep an eye on.
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