UBS analyst believes industry could grow in '06

Analyst Michael Wallace of UBS has announced his predictions for the videogames industry in 2006 - suggesting that the market could see sales growth of around three per cent, but taking a cautious view of publisher performance.

His comments come as an interesting counterpoint to the general industry view that 2006 will see negative growth due to the transition to new hardware platforms - with the demand for current generation software declining much faster than the demand for next generation titles ramps up.

Wallace does take this factor into account, pointing out that "despite our expectations for slight growth this year, we remain cautious on the industry heading into 2006 due to the transition."

In line with this, he has lowered his estimates for many of the industry's biggest publishers, including EA and Activision, basing his figures on the weak sales seen in the December period.

Wallace also chips into the ongoing discussion about the PlayStation 3's launch schedule this year. His projections see the PS3 arriving in Japan during summer - slightly later than Sony's current target date of spring.