Negative industry growth possible in 2005

Influential game-industry analyst
Michael Pachter has flip-flopped on
his prior estimation that a shortage of Xbox 360s was not in the offing. He's now stating that a real lack of supply—from a forecasted 1.5 to now 1 million units in 2005—will contribute to a lack (or even reversal) of growth this year.

Four reasons cited for the retail downturn: early discounting of retail software, a "pattern of lackluster reviews,"
no price cut for the PS2, and Pachter's reworked estimate for Xbox 360 shipments getting to market. "This [Xbox 360]
shortfall alone could cause a shift in holiday software sales from positive to negative territory."

Of course, analysts have been wrong before, but few people besides big executives from game companies like Microsoft, Sony, and Nintendo have as much impact on their share prices (and, consequently, their bottom lines). While game consumers are holding their breaths—and their wallets—for the next gen to arrive in full, the industry as a whole may suffer losses for some time while this console transitional state plays itself out.