Ahead of monthly sales data from NPD Group, Wedbush Morgan analyst Michael Pachter predicted a 20 percent jump in U.S. videogame software sales.

"After last month’s decline due to Halo 3 sales last year, we note that the release slate in October was significantly better than last years," Pachter wrote.

He specifically noted releases Guitar Hero World Tour, Rock Band 2, Fable 2, Far Cry 2, LittleBigPlanet, Fallout 3 and Saint's Row 2.

Pachter forecasted those titles drove videogame software sales of $620 million, up from $515 million for October last year.

$555 million of that will come from software for "new platforms" (PS3, Wii, 360, PSP and DS), with "current generation" contributions of $65 million.

"We think that PS2 software sales will begin to show signs of greater erosion, with a 40 percent year-over-year decline in October," he said.

The analyst also forecast hardware sales, as he expects the Wii to sell 775,000 in the U.S. during the month--more than Xbox 360's predicted 325,000 and PS3's 225,000 combined.

He said the prediction takes into account improved Wii supply and increase Xbox 360 demand thanks to September price cuts and holiday bundles. He added that the Xbox 360 "likely" gained some market share over the PS3 during October.

But it's not all gloom for PS3. "We think that the delayed launch of LittleBigPlanet likely limited the impact of that game on hardware sales, but expect a spike in November."

Pachter said investors may want to use hardware sales as a barometer for the industry's performance in the midst of a tough economic environment.

"If hardware sales turn down in October, we will begin to consider that the videogame consumer has been impacted by the looming recession. We do not expect this to occur; rather, we think that as Nintendo increases Wii supply further, Sony markets LittleBigPlanet and Microsoft rolls out its 'New Xbox Experience,' hardware sales will show year-over-year increases for the balance of the year."

The most recent NPD results released in September showed a 6 percent dip in videogame software sales due to the extremely tough comparison to September 2007, which saw the launch of the blockbuster Halo 3.

NPD is expected to release sales data on Thursday, November 13.