It's not every holiday season that the gaming industry sees a new Halo, a new Grand Theft Auto, a new Gran Turismo, and a new Metal Gear Solid. That only happened in the holiday season of 2004, as a matter of fact. The holidays of 2001 came awfully close, but Gran Turismo 3's July release that year hardly counts as a holiday-season release. While a season like that drives software sales through the roof, it's also a very difficult act to follow.

　　That's the message coming from a trio of analysts today, as Thomas Weisel Partners, Wedbush Morgan Securities, and UBS Securities all released warnings that the NPD September sales numbers (expected to be released later this week) would be off from last year, and that matching the sales posted in 2004's fourth quarter would be difficult.

　　Colin Sebastian and Joshua Matthew with Thomas Weisel Partners predicts software sales down 20 percent from a year ago, with the industry's year-to-date 9-percent growth through August all but wiped out by the end of the year. The situation isn't helped by cautious retailers taking a wait-and-see approach to ordering games.

　　"Video game retailers continue to exercise cautious buying ahead of the holidays, primarily through lower upfront unit purchases of some software titles (relying more on reorders)," Sebastian and Matthew wrote.

　　Wedbush Morgan analysts Michael Pachter and Edward Woo went on the record also predicting a 20-percent drop in software sales for September with another double-digit drop in October. However, they also expect a rebound in November and December, leading to full-year console software sales being up 9 percent.

　　UBS Analysts Michael Wallace and Stephen Tam didn't put a number to their September predictions, but did say that August and September were both weak months for the industry. They did stick by their previous forecast of software sales down 1 percent for the year, and cautioned investors not to expect positive sales data through Christmas.

　　Wallace and Tam also noted the role nervous retailers will play this year. "We already know that some large retailers are starting to cut video game orders for the fall, and recent feedback suggests that orders will remain slow early in the Christmas season," they wrote. "This means that Q4 of this year will be back-half loaded, a trend we have seen the last few years, where retailers take less product up front and wait as long as possible to replenish inventory. This makes the normal Christmas nervousness even more pronounced, where it isn't until early December that companies really have a handle on business."

　　Wallace and Tam also cited higher gas prices, slower consumer spending, and issues related to the transition to next-gen systems as possible factors that could dampen the holiday cheer of gaming industry investors.

　　[UPDATE]: In a separate report issued today by Wedbush Morgan, Pachter and Woo revised their industry forecast for European and US software sales. In April, the pair predicted combined software sales growth of 9 percent in 2005, 10 percent in 2006, and 12 percent in 2007. Now they're suggesting a more modest 5 percent in 2005, and 11 percent in both 2006 and 2007. The main difference given for the revised numbers is weaker than expected hardware sales for Nintendo's GameCube, Game Boy Advance, and DS this year, and a resulting lowering of software sales estimates for those systems.