Piper Jaffray Comments On Amazon Following Decline In January Video Game Sales

NPD video game software retail sales declined 5% y/y in the month of January, which implies ~11% y/y growth for Amazon's AMZN N.A. media segment sales in the March quarter vs. our estimate of +8%. January's 5% y/y video game software sales decline is ~240 bps growth deceleration from YoY in the December quarter, but Piper cautions one month does not make the quarter. On average over the past seven quarters, NPD game data for the entire quarter has understated Amazon's reported US media sales by 22 percentage points. While Piper believes video games account for only ~15% of Amazon's North American media segment sales, it estimate the correlation between NPD video game data and Amazon's media segment is 0.8. Piper Jaffray has a $200 PT and Overweight rating on AMZN AMZN closed Thursday at $187.76