CEA: Holiday TV, game machine sales to rise this year, despite economy

With consumers suffering huge losses on investments in their homes and retirement funds, will they really spend more on CE products this holiday season than last? Two categories should do well, a CEA analyst predicted today.

Regardless of the admittedly massive impact of the financial crisis, this year's holiday sales will increase 4.7 percent for flat panel TVs and other A/V equipment, and 3.5 percent for gaming hardware, an analyst for the Consumer Electronics Association said during an industry webcast today.

"Consumer electronics is holding up well," said the CEA's Sean G. DuBravac, who delivered the CEA's preliminary projections in terms of units, as opposed to revenues. "We're pretty confident that technology will outperform overall retail."

The CEA analyst explained that the industry organization ordinarily holds off on giving its holiday sales predictions until the annual CEA Forum event each fall.

But this year, the CEA is releasing preliminary numbers for these two categories earlier than usual, although its entire and finalized holiday product outlook -- which includes predictions for PCs and other CE products -- won't be presented until this year's forum, which is slated for October 19 to 22.

In a "holiday sneak peak" during today's Web event, DuBravac said that sales of game machines look likely to reach 17.1 million units during this year's holiday season. Sales of game consoles will go down, but less costly portable game machines will step up, the analyst predicted.

DuBravac acknowledged that, with hefty declines right now in their collective "wealth," consumers are being extremely cautious about "discretionary spending." But the CEA is also seeing signs that expenditures on consumer electronics are moving away from the category of discretionary spending, as many consumers see it.

The analyst pointed to a continuation of trends toward "staying home" and cutting expenses on travel which also came into play during the 2007 holiday season. In a newer movement, consumers are spending less money on buying new cars, the analyst suggested, citing rocketing fuel prices as one big reason why.

The real estate and stock market plunges of recent weeks have just about bottomed out by now, according to DuBravac.

Meanwhile, he added, although creditors are starting to be "stricter" about loans to consumers, the current credit crunch is carrying the biggest effects for banks and businesses.