In his usual pre-NPD data video game sales preview, Wedbush Morgan Securities analyst Michael Pachter predicted yet another month in which Nintendo dominates. For U.S. console software sales in May he's forecasting sales of $333 million, up 16 percent. His estimate includes sell-through of 400,000 Wii consoles versus just 100,000 for the PS3 and 225,000 for the Xbox 360. Pachter had predicted 100K for the PS3 in April as well, but as it turns out just 82K were sold.

It's the DS, however, which he expects to steal the show. In April Nintendo's handheld sold through 471K. Pachter expects that figure to climb slightly to 475K in May. Meanwhile, the PS2 and PSP are predicted to sell 250K and 175K, respectively. His estimate also factors in $73 million in software sales for the PS3 and Wii, based on a tie ratio of around 2.75 units for each hardware unit sold.

May sales are expected to be driven again by Nintendo's Pokemon Diamond/Pearl (which sold 1.75 million units in April) and Activision's Guitar Hero II and Spider-Man 3, along with new releases such as Activision's Shrek the Third, Microsoft's Forza Motorsport 2, and Nintendo's Mario Party 8.

While total industry sales were up 20 percent in April, software sales were actually flat. Pachter is expecting a healthy rebound for May, and he's expecting full-year software sales growth of 18 percent. Prices on the PS3 and 360 will likely continue to impede sales, he said, but expected price cuts later this year should stimulate the market. Meanwhile PS2 software sales should remain strong.

"Now that supply and demand of the PS3 and Wii are near balance, we think that hardware unit sales will be more modest than they were in the analogous period of 2002, when console prices averaged under $200. We continue to expect higher average console prices to be an impediment to rapid sell-through of hardware, and we expect cycle-to-cycle declines of 10% or more for hardware sales to persist through the end of summer 2007," Pachter noted.

"It is possible that Sony's cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 and Xbox 360 before the holidays. Each of these could serve as a catalyst for sales growth later in the year. We expect PS2 software sales strength to persist throughout 2007, with a blockbuster lineup of licensed movie-themed games released between May and July (and corresponding sales strength during the holidays with the release of the movie DVDs)."

NPD's May data will be released after market close on June 14.