Goldman Sachs Global Investment Research in a research note reports the video game industry may grow more slowly than expected in 2003. In October 2002 the firm forecasted the growth for 2003 could be ten to twelve percent, but at present the five to ten percent range seems more likely.
Even the updated estimate could prove to be optimistic, taking into account the sober outlooks from Activision and THQ. Industry-related stocks are mostly likely to fluctuate prior to traditional catalyst E3 Expo, takes place.
According to Goldman Sachs Electronic Arts will likely benefit from its size and marketing muscle, but the pivotal factor for the company's fiscal-year results will the performance of The Sims Online. The publisher can count on an additional 20 to 25 cents on earnings per share for this fiscal year, which ends in March, if The Sims Online gets 500,000 subscribers; results will be hurt if no more than 350,000 subscriber are realized.
THQ and Activision shall have to rely heavily on the success of their new titles in 2003. The latter might be able to improve its outlook through acquisitions of either software or other game companies.
News source: Reuters
