Analysts pick apart the video game industry's recent performance

These past few months have been eventful for the gaming industry.  Despite the economy forcing many consumers to reign in their spending habits, analysts are still expecting to see an overall growth in the industry. 

Despite certain negative indications, hardware sales are expected to double through the end of December.  Nintendo already announced its Thanksgiving sales figures, topping the charts at 800k Wiis, and though Microsoft didn't offer any exact numbers, they've asserted their November victory over the PlayStation 3's 400k units.  Hardware sales are expected to gradually decline year over year, but the industry will continue to thrive as software sales take the lead.

As for 2008, heavy hitters like Gears of War 2 -- already 3 million units strong -- Call of Duty: World at War, Resistance 2, and Left 4 Dead are expected to come out on top.  Animal Crossing: City Folk has also become a surprise hit, with over 200k units sold thus far.  On the flip side, Mirror's Edge and Need for Speed: Undercover are expected to fall short, becoming this year's gaming "misses."  Still, hopeful analysts aren't giving up on DICE, and expect Mirror's Edge 2 to perform better than its predecessor.

Harmonix and Activision continue pushing their music games, hoping that their respective titles will continue gaining momentum during the holiday shopping season.  It looks like the virtual rock n' roll craze is finally wrapping up, with Guitar Hero: World Tour sales dropping 50 percent series over series.  Rock Band 2 isn't exactly wooing consumers left and right like the previous title, and retailers are reporting a "softness" in the music genre of gaming.

"It is pretty clear that the series has already reached its peak among the mass-market audience," said EEDAR's Jesse Divnich.  Other analysts, on the other hand, are blaming supply constraints rather than declining consumer demands, and Wedbush Morgan analyst Michael Patcher believes Activision will continue turning a profit with World Tour.

Despite troublesome stories like Midway's stock market woes, analysts as a whole are encouraging investors to remain confident in the video game industry despite the economic recession.

"We do not believe that the video game consumer has yet been impacted by the looming recession," Pachter stated.  "We do not expect this to occur; rather, we think that as Nintendo increases Wii supply further, Sony markets Blu-ray, and Microsoft rolls out its 'New Xbox Experience', hardware sales will show year-over-year increases for the last two months of the year."