Activision Blizzard boss Bobby Kotick came out guns blazing recently in a new interview in which he noted he's concerned about Sony's video game business. "They have to cut the price, because if they don't, the attach rates [the number of games each console owner buys] are likely to slow. If we are being realistic, we might have to stop supporting Sony,” he said. “When we look at 2010 and 2011, we might want to consider if we support the console — and the PSP [portable] too.”
When the leader of the world's largest third-party publisher issues a statement like that about a major platform holder, the industry takes notice. IndustryGamers immediately followed up with Sony Computer Entertainment America, which didn't directly address Activision, but told us that they of course value all of their publishing partners.
"PlayStation has tremendous momentum coming out of E3, and we are seeing positive growth with more than 350 titles slated to hit across all our platforms, including many anticipated games from our publishing partners. We enjoy healthy business relationships with and greatly value our publishing partners and are working closely with them to deliver the best entertainment experience," a Sony spokesperson said.
Although we doubt Kotick would actually stop supporting the PS3 and its installed base of 22 million, there's no denying the significance of Activision as a publishing partner for Sony. The PS3 certainly cannot afford to lose hugely successful franchises like Guitar Hero, Call of Duty and Tony Hawk.
12 Comments
June 19, 2009
Good response from Sony. As we learned from the PS2, it is too early to burn bridges with Sony - as that system is still selling well.
June 19, 2009
Jebacb, I don't know if Sony's response was a good one, but I sure know that it sounded like they caved in! When someone like Activision threatens blatantly to cut support for PS3 and PSP, Sony's response "We enjoy healthy business relationships with and greatly value our publishing partners and are working closely with them to deliver the best entertainment experience", is a response that shows that Sony wants to avoid confrontation and take the spotlight away from Activision's statement as soon as possible. I am fascinated by the fact that most major software developers (and of course the public) keep pressing Sony for a price cut! hopefully, it will happen soon, so I can finally join the SP3 family myself.
June 19, 2009
I hear what you're saying, Nikos. I like their response for the reasons you stated: it's non-confrontational. The last thing they need to do is shine attention on this issue and have more people question what we're questioning: is Sony in trouble?
I think Sony knows what they're doing. They're maybe not well connected with media relations, but they are better positioned for scalability and longevity than Microsoft or Nintendo. The big question is, how will consumers respond to a new console from Microsoft or Nintendo, and the same old PS3 from Sony?
June 19, 2009
I would like to see Bobby present to his board of executives about his master plan to cut off a proven source of profit. Activision will always have costs to cover, and an income source thats greater than the variable costs involved to generate it is a no-brainer.
June 21, 2009
@assailtwaffle: Too true man. It's simple math, and you're spot on.
if (cost of making game < net profit after game)
{
don't mess up and stay where the money is.;
}
June 21, 2009
@assaultwaffle You are not taking into account the cost to publish the game.. For Xbox and Nintindo the cost to publish a game per console owner is so much lower then the cost to publish a game for the PS3. If you could make a game and that one build was able to support all 3 platforms without additional cost it would be one thing, but here that is not the case, each platform you build for adds significantly to the cost, so you have to look at this metric.
@ jebacb There are reasons the PS2 is doing well, and it really has nothing to do with the consoles power. Since it came out before the xbox and had a larger following initially there were many many more games for the ps2 then original xbox. In addition to that Sony dropped prices on it regularly with the xbox, so at the end of the cycle it was the clear front runner with tons of games. When gen 3 game out the ps2 was still selling strong due to its low price point making it the choice for the people that cant afford a ps3 or xbox 360, so developers still made games for it. What will happen at the end of this cycle, if past performance is an indication the xbox 360 will be the console of choice for the masses due to its price point and the PS3 will go by by like the original xbox did.
June 21, 2009
@ Alexander so you would rather spend tons of time and money on a low profit margin platform, when you could take that money and time and put it into a high profit margin platform?
June 22, 2009
If this was 4-5 years ago, Sony would have said "f**k off!"
But they can't, they're in last place at most of that reason is their own fault.
Get the price cut over with so everyone can move on....
June 22, 2009
jebacb, the PS2 is on life support. It's selling less than 200K worldwide per month now. The PS3 is in third place and falling farther behind every month. The PSP is never gonna catch up to the DS.
assaultwaffle, Kotick is saying they aren't making money on PS3. His board of directors would be upset if he continued supporting this proven money lose. Hell, Kotick has said Activision Blizzard had to pay Sony $500 million last year in royalties (just to be able to publish games). If they are spending more money on PS3 games than they are making back, then it would be stupid of them to continue supporting Sony.
June 22, 2009
if activision is not making money from ps3 games, then by all means cut them out. however, devoting the additional resources to the Wii or 360 is not going to make additional cash or customers flow out of their respective a$$es. that is up the the developers.
July 13, 2009
ok so let me get this straight you want them to support a system that takes 4 times longer to program for has no tesselation support and only seems to have a hardware equivilant of a pc thats over 4 years old , sony dumped all thier money into 2 unproven architectures and the coupled them with a choke point of 2 older graphics chipsets , sad true its all OpenGL2.1 based programing on a cell architecture with a beta version of cuda , but the 360 has Havok based built in not the api version the hardware and DX 10-11 hardware built in so it can take an updating , and the ability to change chip archs for the next 6 years, so why do developers like the 360 and Wii over the PS3 well the only reason i would like a PS3 is to grill my steak while playing madden 2010, but thats messy, if it costs less allows you 2 platforms at once and gives you a secure base for the next 6 years who would you go with , mr unproven tech that has caused fires or mr red ring who will tell you if you keep it well ventilated on its belly and off the carpet she will work for another 6 ? I pick the latter
April 1, 2010
hey are spending more money on PS3 games than they are making back, then it would be stupid of them to continue supporting Sony.
psp memory