WMS: PS3 Tie Ratio of Two This Year

WMS: PS3 Tie Ratio of Two This Year

Investment analyst Wedbush Morgan Securities says the PS3 will attract a tie-ratio of just two games this year, contributing less than $150 million to publisher coffers. In comparison, Xbox 360 launched with a tie-ratio of 3.9 games.

The firm said it expects total U.S. software sales of $144 million for the PS3 and $288 million for the Wii, with additional European software sales of $156 million for the Wii in 2006. These figures are based upon an estimated sell-through of 1.2 million PS3s in the U.S. and a tie ratio of only two (given the likely limited release slate), and sell-through of 2 million Wii hardware units in the U.S. and 1 million in Europe with a tie ratio of three.

But despite investor “confusion” about the new console launches, good times are ahead for U.S listed publishers.

In a note yesterday, the firm advised, “We expect the two next-generation consoles launches next month to provide positive catalysts for the  interactive entertainment publishers and for GameStop. We believe that Activision, Electronic Arts, and THQ have strong launch lineups, and expect each to benefit from strong console launches, but think that GameStop will be the biggest U.S. public company beneficiary of strong next-generation hardware and software sell-through.”

The note added, “We think that investors remain confused about the effects of the console transition.  The next-generation launches and expected sell-outs should generate positive press about video games, and should drive continued share appreciation over the remainder of the year, though there may be some volatility should the PS3 and Wii launches be delayed.