In a research note circulated today, Wedbush Morgan analyst Michael Pachter predicts that the current console cycle will not expire until 2013 at the earliest--and when the new games come, they will still be wrapped in a box.

Pachter's paints a picture where "ancillary revenues" drawn from digital distribution and console updates--such as a possible high-definition Wii, as well as Sony and Microsoft's motion controllers--will naturally delay the release of newer hardware.

But while Pachter sees an uptake in digital distribution, he expects a slow revolution, with downloads representing "less than 50 per cent of total game sales in ten years' time." The case of Grand Theft Auto IV's first digital expansion "The Lost and... Read more

Rockstar's downloadable Grand Theft Auto IV expansion The Lost and Damned will break the 2 million download mark this year, according to Wedbush Morgan analyst Michael Patcher's estimates. "Take-Two released the first installment of DLC for GTA in mid-February, and we estimate that the game has been downloaded over 1 million times to date," said Patcher of the $20 expansion. "By year-end, we think that this figure will likely double, giving us greater confidence that Take-Two can achieve its full-year earnings guidance."

Patcher also expects the next full release of Grand Theft Auto series to outsell GTA 4 by up to 50 percent due to larger hardware install base. Grand Theft Auto IV boasted sales of $500 million just one week after hitting stores last year.

EEDAR games industry analyst Jesse Divnich believes that Nintendo's strong holiday sales were the only reason the industry avoided the full effects of the current economic recession.

"Simply put, Nintendo saved Christmas," proclaimed Divnich in a research note today.

"Nintendo Wii and DS software unit and dollar sales will account for over 50 percent of all games sold in December. Without these sales, the industry would have likely felt the full wrath of the recession."

Added Divnich: "We believe their simple-to-use design, cheaper and wider variety of software titles, and the 'hot effect' [already] in place on both systems all played a role in driving both the Wii and the DS to the top of their segments."

The full NPD sales lists for the month of December have not yet been released. EEDAR's expectations were released in a handy chart (above).

While relatively sluggish sales of Guitar Hero World Tour has some convinced that the music game series has peaked, Signal Hills analyst Todd Greenwald disagrees.

"Guitar Hero sell-through [is] a bit soft, but not a disaster," he explained to Edge. "Despite this 'weakness,' we disagree strongly with those who contend that Guitar Hero is a 'fad,' or that the franchise peaked last year with [Guitar Hero III]."

Explaining his belief, Greenwald noted that the overall franchise is "up substantially (including extensions like Guitar Hero Aerosmith and Guitar Hero On Tour)."

He added that North American sales for the franchises could be over 20% for the year, "while Europe could be up nearly 300 percent."

And with Activision planning to triple Guitar Hero releases by 2010, Greenwald noted the potential of further growth for next year, pointing to titles like Guitar Hero: Metallica, Guitar Hero: Jimi Hendrix, DJ Hero, "and more."

Electronic Arts titles such as Mirror's Edge, Rock Band 2 and Need for Speed Undercover are expected to underperform this holiday season, and could spell more product and personnel cuts for the publisher, according to Lazard Capital Markets analyst Colin Sebastian.

"Specifically, we believe several EA titles are tracking below plan at retail this holiday, including Need for Speed Undercover (with disappointing reviews), new franchise Mirror's Edge, and Rock Band 2," said Sebastian, as relayed by Gamasutra.

Lazard predicts that a sluggish season could mean more layoffs for EA--in addition to the October 30 slashing of 600 jobs--and product cancellations, such as the company's recent termination of EA LA's Tiberium.

"Importantly, we believe EA is continuing to review its cost structure and franchise base, and it is possible that management will announce further cuts in headcount and the development pipeline (including existing franchises) over the coming quarters," added Sebastian.

While hard sales data of holiday titles has not yet been released, Lazard's "tracking" bills the aforementioned games as slower-than-expected sellers. However, Sebastian noted that Dead Space, FIFA 09 and Left 4 Dead have seen strong sales in spite of the overall disappointment.

Following claims by Electronic Entertainment Design and Research (EEDAR) president Geoffrey Zatkin that just 4% of videogames make a profit, an EEDAR spokesperson has called the statement a misquote, saying that the actual figure is closer to 20% for released titles.

Said the EEDAR representative to Edge: "What Geoffrey said was that only 20 percent of games that start production will end up with a finished product. And of that percentage of finished games, 20 percent will make a profit."

Which makes 4%, for those mathematicians keeping score.

The original quote came out of a Forbes article on EEDAR, a company that compiles data on past titles that it sells to publishers and developers.

EEDAR hopes its database of historical game performance will "help remove the burden for publishers and developers from having to justify every feature in their title," by "identifying early in the development cycle the correct feature combinations most likely to meet consumer expectations."