• NY Times, Wednesday, December 21, 2005 10:15 AM

Following an 18 percent sales slide in November, big-name video game publishers like Electronic Arts and Activision are downsizing their fourth quarter earnings projections. Apparently, nobody's buying video games this Christmas--traditionally the most successful spell for the industry. So what's wrong this year? Analysts blame Microsoft for doing a thorough job marketing its new Xbox 360 console and then failing to produce enough units to come even close to meeting sales projections. That Microsoft has sold only 320,000 consoles thus far is its own fault--it wanted to sell 1.5 million units by the end of the year. Now it will be lucky to have sold 500,000, analysts say. Since Sony's new console won't hit stores until next spring, gamers are holding off on buying new games until they can get their hands on a next generation console. As it is, many of them are going to have to wait well into next year. During the rough console transition period, many game publishers will be wishing they had some recurring in-game advertising revenue to fall back on.

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