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Top 10 Selling Games for PS2 for April 2003 (Retail Sales $)
Title Publisher Projected $'s Projected Units
1 T.CLANCY'S SPLINTER Ubi Soft 13,514,920 $ 273,295
2 DEF JAM VENDETTA Electronic Arts 11,366,810 $ 230,608
3 NBA STREET VOL 2 Electronic Arts 9,497,958 $ 190,531
4 MIDNIGHT CLUB II Take-Two Interactive 8,616,683 $ 176,142
5 DYNASTY WARRIORS 4 Koei 4,962,962 $ 100,758
6 GRAND THEFT AUTO:VICE Take-Two Interactive 4,672,966 $ 101,955
7 MVP BASEBALL 2003 Electronic Arts 4,082,820 $ 83,375
8 SOCOM:SEALS W /HEADSET Sony 3,444,683 $ 58,935
9 X2:WOLVERINES REVENGE Activision 3,329,350 $ 69,716
10 YU-GI-OH! DUELISTS Konami 2,933,491 $ 63,564
Source: NPD Funworld.
Top 10 Selling Games for Xbox for April 2003 (Retail Sales $)
Title Publisher Projected $'s Projected Units
1 NBA STREET VOL 2 Electronic Arts 3,202,402 $ 64,256
2 HALO Microsoft 2,208,690 $ 46,125
3 X2:WOLVERINES REVENGE Activision 1,780,032 $ 36,468
4 T.CLANCYS GHOST RECON Ubi Soft 1,444,664 $ 29,052
5 T.CLANCY'S SPLINTER Ubi Soft 1,427,222 $ 31,675
6 TAO FENG: FIST LOTUS Microsoft 1,416,533 $ 28,471
7 THE SIMS Electronic Arts 1,389,801 $ 27,898
8 PHANTASY STAR I & II Microsoft 1,111,574 $ 27,989
9 MVP BASEBALL 2003 Electronic Arts 949,568 $ 19,083
10 RED FACTION II THQ 943,351 $ 18,946
Source: NPD Funworld.
Top 10 Selling Games for GameCube for April 2003 (Retail Sales $)
Title Publisher Projected $'s Projected Units
1 ZELDA: THE WIND WAKER Nintendo 7,870,007 $ 158,397
2 DEF JAM VENDETTA Electronic Arts 1,559,685 $ 31,337
3 T.CLANCY'S SPLINTER Ubi Soft 1,226,210 $ 24,618
4 SUPER SMASH BRO MELEE Nintendo 1,225,209 $ 40,907
5 MARIO PARTY 4 Nintendo 1,215,352 $ 35,308
6 THE SIMS Electronic Arts 1,102,544 $ 22,161
7 NBA STREET VOL 2 Electronic Arts 991,698 $ 19,909
8 IKARUGA Atari 759,834 $ 18,155
9 METROID PRIME Nintendo 736,771 $ 24,397
10 ANIMAL CROSSING Nintendo 733,055 $ 14,878
Source: NPD Funworld.
Top 10 Selling Games for GBA for April 2003 (Retail Sales $)
Title Publisher Projected $'s Projected Units
1 POKEMON RUBY Nintendo 7,566,362 $ 240,616
2 POKEMON SAPPHIRE Nintendo 7,116,988 $ 226,684
3 YU-GI-OH! W ORLDWIDE Konam i 4,030,788 $ 112,562
4 GOLDEN SUN: LOST AGE Nintendo 3,294,253 $ 107,679
5 HAMTARO: HEARTBREAK Nintendo 1,689,601 $ 56,831
6 SONIC ADVANCE 2 THQ 1,626,790 $ 54,849
7 ZELDA: LINK TO PAST Nintendo 1,485,777 $ 48,556
8 KIRBY: N IGHTMARE Nintendo 1,363,062 $ 45,527
9 METROID FUSION Nintendo 1,058,035 $ 35,719
10 YU-GI-OH! DUNGEONDICE Konam i 1,007,320 $ 33,733
Acclaim Entertainment (AKLM—Hold)
Releases during April: 4/8 Burnout 2: Point of Impact (Xbox, GC).
April Retail Sales--$7 million
WMS Estimate--$8 million
Acclaim’s market share declined sequentially from 2.6% last month to 2.3% as its retail sales decreased from $11 million to $7
million (compared with $9 million last April). Acclaim’s sales were led by All-Star Baseball 2004 which sold 48,000 units across all platforms. Burnout 2 for the GC and Xbox sold only 11,000 combined in its first month of release. Catalog sales of ATV Quad Power Racing, Burnout, Mary Kate & Ashley, Legends of Wrestling 2, and Turok continue to generate incremental sales.
Activision (ATVI—Buy)
Releases during April: 4/15 X2 Wolverine's Revenge (PS2, Xbox, GC, GBA, PC).
April Retail Sales--$16 million
WMS Estimate--$24 million
Activision’s market share increased sequentially from 4.8% last month to 5.1%, while its retail sales decreased from $21 million to $16 million (compared with $36 million last April). The company’s sole April release, X2, sold fewer units than we expected
with 132,000 units sold. However, during its May 8 earnings call, Activision management stated that the game had shipped over 1 million units and was selling well. We expect the May sales data to reflect better sales. Tenchu 3 did well in its second month of release with 52,000 units sold. Tony Hawk’s Pro Skater 4 sold 39,000 units across all platforms (PS2, Xbox, GC, PSX, GBA) compared with 54,000 units last month. Catalog sales were driven by other Tony Hawk titles and Spider-Man games.
Electronic Arts (ERTS—Buy)
Releases during April: 4/1 Def Jam Vendetta (PS2, GC), 4/29 NBA Street Vol. 2 (PS2, Xbox, GC).
April Retail Sales--$64 million
WMS Estimate--$65 million
Electronic Arts’ sales were in line with our forecast, and compare with $30 million last April, a 111% year-over-year increase. The company’s market share increased sequentially from 14.2% last month to 19.6%, while its retail sales increased from $62 million to $64 million. The company’s best-selling title was Def Jam Vendetta, with over 262,000 units (PS2, GC) sold in April. NBA Street Vol. 2 also had a strong month with 275,000 units (PS2, Xbox, GC) sold in less than one week of release. During its May 6 conference call, Electronic Arts management stated that each game had shipped in excess of 700,000 units. MVP Baseball 2003 (PS2, Xbox) sold 102,000 units in its second month of release. Madden, NBA Live, Harry Potter, James Bond 007, and Lord of the Rings also sold very well. We continue to believe that Electronic Arts will generate sales well in excess of last year’s levels and expect it to maintain its market share in 2003.
Midway Games (MWY—Buy)
Releases during April: None.
April Retail Sales--$7 million
WMS Estimate--$7 million
Midway’s market share increased sequentially from 2.0% last month to 2.2%, while retail sales decreased from $9 million to $7
million (compared with $6 million last April). The company’s best-selling title was MLB Slugfest 20-04, which sold 42,000 units across all platforms in its second month of release. This compares with our estimate of 100,000 units, with the downside offset by better than expected performance from the company’s catalog titles. Mortal Kombat continued to sell well with 43,000 units sold across all platforms. Midway’s overall sales were in line with what we expected.
Take-Two Interactive (TTWO—Buy and Focus List)
Releases during April: 4/8 Midnight Club II (PS2), 4/8 Tropico 2 Pirate Cove (PC), 4/22 Conflict: Desert Storm (GC).
April Retail Sales--$20 million
WMS Estimate--$24 million
Take-Two’s market share increased sequentially from 3.6% last month to 6.1% and retail sales increased from $16 million to $20 million (compared with $16 million last April). Take-Two sales were driven with the release of Midnight Club II for the PS2 selling 176,000 units. During its May 29 conference call, Take-Two management stated that the game represented 14% of the April quarter’s revenues, or approximately $27 million. This translates to sell-in volumes of approximately 680,000 units, meaning that the game is likely a big success in Europe. Grand Theft Auto: Vice City continued its record breaking sales record by selling another 102,000 units, bringing cumulative U.S. sales to 5.1 million units. The company also showed continued sales
strength from its Grand Theft Auto III, Max Payne, Midnight Club, and Conflict: Desert Storm games.
The 3DO Company (THDO—Hold)
Releases during April: None.
April Retail Sales--$2 million
WMS Estimate--$2 million
3DO’s market share decreased sequentially from 0.6% to 0.5%, with sales decreasing from $2.7 million to $1.5 million (compared with $3 million last April). High Heat Baseball 2004 sold 27,000 units in the month (PS2, Xbox).
THQ (THQI—Buy)
Releases during April: 4/1 Red Faction II (GC, Xbox, PC), 4/2 Disney Princess (GBA), 4/8 Crazy Taxi: Catch A Ride (GBA).
April Retail Sales--$17 million
WMS Estimate--$18 million
THQ’s market share increased sequentially from 4.7% to 5.1%, while retail sales decreased from $21 million to $17 million (compared with $12 million last April). THQ’s big seller was Sonic Advance 2 for the GBA, which sold 55,000 units. THQ again had sales that were broad-based, with 17 titles (7 Game Boy games) selling 10,000 or more units, compared with 22 last month. Games based upon the ***************eBob SquarePants license continued to sell well representing 2 of the top 5 games sold by
THQ.
April 2003 Market Share of Covered Companies (Retail Sales $)
Apr-03 Mar-03 Feb-03
ELECTRONIC ARTS 19.6% 14.2% 17.6%
TAKE 2 INTERACTIVE 6.1% 3.6% 5.0%
THQ 5.1% 4.7% 5.7%
ACTIVISION 5.1% 4.8% 4.0%
ACCLAIM ENTERTAINMENT 2.3% 2.6% 2.5%
MIDWAY 2.2% 2.0% 2.7%
THE 3DO COMPANY 0.5% 0.6% 0.4%
40.8% 32.5% 40.9%
Source: NPD Funworld.
CONCLUSION
April overall retail sales results were much higher than we expected, coming in at $324 million compared to our estimate of $260 million. As expected, the positive sales trend in March accelerated in April, and we anticipate overall industry growth to continue at a 20%+ rate into 2003 and through 2004. We are hopeful that the strong April results will allow investors to regain confidence in consumer spending on video games over the next several months. We expect this growth trend to continue in May due the release of several hit games including Activision’s Return to Castle
Wolfenstein: Tides of War (Xbox) and Return to Castle Wolfenstein: Operation Resurrection (PS2), THQ’s Finding Nemo (PS2, GC, Xbox, GBA), and Atari’s Enter The Matrix (PS2, GC, Xbox).
Electronic Arts continues to be the big winner in 2003 and we expect it to continue to gain market share. Take-Two and Activision results were lower than we expected, but we believe that both companies’ results will rebound later in the year, as both are expected to release several potential hit games. Acclaim, Midway, THQ, and 3DO results were about in line with our expectations and we do not expect any significant market reaction to the NPD data for these companies.
