Don’t panic people, because there’s a rational explanation for all this. When Mr. McIntyre suggests that video games are a reflection of how much consumers have to spend, he’s correct, but he fails to account for the fact that unlike other discretionary spending such as food or apparel, the video game market fluctuates depending on what’s available. There’s a near continual trickle of video games released year round but the titles that really spur sales are fewer and often clustered around certain periods of time. In April 2008 both GTA IV and Mario Kart Wii were released, two powerhouse titles that gobbled up cash, while this year April didn’t have much to compete.

Falling console sales can simply be attributed as much to market saturation as low cash flow. In 2008 the Wii and PS3 had been out for around a year and a half. Now they’ve been available for two and a half, with the Xbox 360 having been on the shelf even longer. No matter how powerful, intuitive or flashy a console is eventually it’s going to hit the point where the number of people hoping to buy one drops off.

Right now fans are holding out for the big titles. E3 is on the horizon, meaning that many developers are holding back their big guns to debut at the event, thus achieving the maximum publicity. Games aren’t struggling, you’ve just got a lot of gamers playing through old favorites while they wait for the next big game instead of picking up less impressive titles.

First up is EEDAR analyst Jesse Divinich who pegged the March sales of the game at only 200,000 units, noting that while it will be profitable for Rockstar, the numbers aren’t exactly encouraging for other publishers.

Meanwhile, analyst Michael Pachter estimated that the game has sold over twice that number.

It is not yet confirmed just how many units the game has sold. Official NPD sales numbers aren’t due till Thursday, so keep biting your nails.

"If the title’s subsequent reviews are consistent with the initial critical response, ‘Chinatown Wars’ would be the highest rated title on the DS to date," said Cowen Group analyst Doug Creutz.

Creutz expects the game to sell about 2 million units this year.

"The highly-rated release supports our belief that Take-Two has, pound-for-pound, the highest-quality development talent in the industry," added Creutz.

This is Rockstar’s first outing on the DS. Their previous handheld games include GTA: Liberty City and Vice City Stories on the PSP.

Well, they are by no means official numbers but analyst Jesse Divnich has a hunch that the following numbers are at least predictably accurate.

Anyways, Divnich says that the GTA IV expansion, The Lost & Damned, raked in less than $3 million dollars at brick and mortar retailers while raking in up to $18 million over Xbox Live.

While these numbers are not straight from Rockstar, it makes it easy to tell that the Xbox Live method of aquiring The Lost & Damned was much more favorable than the physical counterpart.

However, if the expansion’s content had actually been released on a game disc as opposed to getting a code to download the content over Xbox Live, these numbers probably would have been a lot different.

Read (Joystiq)

“Currently, we expect [World Tour] unit sales to decline by more than 50 percent series-over-series for November. This is coming off the October month where series-over-series units declined by more than 60 percent,” said Divinich.

Divinich further pointed out sub-retail prices of Guitar Hero World Tour – the fourth game in the series – as an indication that “demand and supply are currently in equilibrium.” While he believes the series has reached its peak, Divinich notes that it doesn’t mean the whole plastic guitar-playing fad will fade away – just the rapid expansion of its growth has burned out.

“We expect Guitar Hero and Rock Band releases for the next 10 years as they will always have a large and loyal market base, just as [Dance Dance Revolution] is still today a very profitable franchise for Konami, even though that series reached its peak a long time ago,” he explained.

"Notwithstanding this month’s anticipated decline, we believe that the videogame software sector remains highly recession-resistant," he wrote in an investors note. "This month’s anticipated decline" is the almost certain year-over-year drop from September 2007, when Halo 3 had its blockbuster release.”

Pachter additionally predicted that September sales will hit $620 million in software – a 6% decline – but will see large increases in hardware sales. He cites the Xbox 360 price cut and increased Wii production to be the cause of this.

World of Warcraft’

Lazard Capital Markets analyst Colin Sebastian expects the MMORPG titan to add another 1 million subscribers in the next year to its significantly large 10.9 subscriber base.

"We expect a net addition of ~1 million new subscribers to World of Warcraft over the next 12 months, driven in part by the launch of the expansion pack, as well as by ongoing growth of the game in China," he wrote in an investors note.

"We do not expect [Warhammer Online to have] a significant negative impact in the near-term on World of Warcraft," Sebastian added.

Wrath of the Lich King, the aforementioned expansion, is set to launch November 13.

"We still urge Sony to consider a possible hardware price cut this holiday season," said Divinich. "If September hardware sales fall below our estimate (under 200,000 units), it could be an indication that the Xbox 360 price cut played a bigger role on hindering PS3 sales than what we originally expected."

The PS3 currently costs $399 for the 80GB model, with a $499 160GB model soon to be released. Microsoft recently cut prices on the Xbox 360, making the hard-driveless version only $199, with the 60GB model going for $299.

Janco Partners analyst Mick Hickey believes that the cancelation of the far-in-development title raises questions about EA’s management.

"Continued lack of management execution and/or product quality, damages new management’s credibility and dampens our excitement for the company’s shares," he said.

On the other hand, Wedbush Morgan analyst Michael Pachter believes that it was a good move by EA: "Canceling a bad game goes a long way toward preserving the quality of the overall lineup.”

Sebastian’s guess is in tune with EA’s own expectations that the game will be a blockbuster. However, EA is more concerned with making Spore stand as a platform that can be monetized even further, ala The Sims.

Spore will ship September 7 on PC and Mac, alongside a stripped-down version on the DS.

The Wii does not appear to be a fad and it has the chance to be one of the best selling systems of all-time.

I do fore see an issue that Nintendo may face in the distant future. If they increase production of units, and should they continue selling consoles at this rate, Nintendo may simply run out of people to sell to. In all seriousness though, if Nintendo does continue with new ideas, such as with Wii Fit, there is no reason why the Wii should stop selling as well as it is currently. Even if it does decrease in sale rates, Nintendo could cut the price, and still make a profit.

If you are still among those who haven’t purchased a Wii, why not leave a comment explaining why, and what it would take for you to buy one.