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Activision "might stop supporting Sony" News
PlayStation 3 News by Games Industry.biz
Activision CEO Bobby Kotick has said that his company may have to stop supporting the PlayStation 3 if Sony does not drop the price of the luxury console.
"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," said Kotick to The Times.
"When we look at 2010 and 2011, we might want to consider if we support the console — and the PSP [portable] too."
According to the report, Activision paid USD 500 million in royalties to Sony last year which, "probably still worked out at 400 per cent of the profit they made".
He added: "I'm getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform.
"It's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation."
Big releases from Activision this year include a reinvigorated Tony Hawk title complete with peripheral, DJ Hero, the latest spin-off of the popular Guitar Hero franchise, and Call of Duty: Modern Warfare 2, which Activision expects to be the "biggest entertainment launch of all time".
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hammerhead666
19/06/09 @ 13:30
+1
Expect another announcement very soon(tomorrow maybe)about how he was misquoted and that Activision are happy to support the ps3.
I can see that happening. |
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kangarootoo
19/06/09 @ 13:31
+1
I'm not so sure. Percentage return on your investment is an important issue. No company has endless funds, so they want to make the most profit on each £ invested. And right now they are saying that profit return is smaller on PS3 developments.
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+5
"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."
This is complete and utter bullshit so I guess he was misquoted. The other option is that the guy is an idiot. Given his function that's not completely unrealistic... For those that don't get it: The number of games each console owner buys isn't dependent on the price of the console. A price drop won't make me as someone that already owns the console all of a sudden buy more games. So the attach rate has nothing to do with this. It would even drop if the price of the console was reduced as more people that buy relatively few games would get one (the non-hardcore). |
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carlitoswagon
19/06/09 @ 13:47
0
Do you think Bobby's a secret 360 fanboy? ; )
Sounds like it....... Can't see it happening. He does have a track history of talking complete shite! |
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-4
"You totally missed the big picture, by focusing on one incorrect point. A PS3 at £299 or whatever equivalent is not growing the next-gen market and that is something that affects the bottom line. More consoles = more potential sales."
That's a rather rash conclusion and one not supported by logic. |
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Triggerhappytel
19/06/09 @ 13:53
+2
I genuinely hate Activision. They clearly don't give a flying fuck about anything but raw profit, and they have such an abhorrent business model that unfortunately works very well. Barely a week seems to pass by now when Kotick doesn't make some irritating remark or other. It's just a shame that they're so arrogant because ActiBlizz are doing so well.
I can't see them genuinely stop releasing PS3/PSP games because they would instantly lose access to 20/50 million potential customers immediately, but it is surprising to hear this nonetheless. Seems like Sony's hand might soon be forced with a PS3 price drop...? |
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+3
For those that don't get it: The number of games each console owner buys isn't dependent on the price of the console.
Are you sure? Every time a new console comes out I allocate £500 or so to it. With that I buy the console, a second controller, required accessories, and as many games as the rest of the budget will allow. Buying a £100 console and a stash of games as a Christmas present is much easier than buying a £300 console with a similar stash of games. |
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Bloodhunter
19/06/09 @ 13:55
-2
dont turn this into a rage-fest
i may stop supporting my ps3 soon, well i have, havent bought a game for it since KZ2 PC all the way :) |
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farticusmaximus
19/06/09 @ 13:58
0
"One side effect this might have is that Activision will almost certainly lose the James Bond franchise."
That could be a blessing in disguise ;) |
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0
Mr farticus,
I can't remember if you own a ps3 or not but thanks for your concern. Sony don't just focus on computing, they've never been a "sell it cheap, pile it high" organisation so what this guy from Activision says really doesn't matter. Everyone is concerned about their bottom line, particularly in today's climate. He said they "might" stop supporting Sony but in my opinion, they won't. |
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farticusmaximus
19/06/09 @ 14:02
-3
@Les
"You totally missed the big picture, by focusing on one incorrect point. A PS3 at £299 or whatever equivalent is not growing the next-gen market and that is something that affects the bottom line. More consoles = more potential sales." That's a rather rash conclusion and one not supported by logic." /doubletake YaWhoWithTheWhatNow? Les, did you really, seriously, type that? So in your crazy upside-down world selling fewer consoles will mean selling more games? I think you need to tighten your straightjacket, the lunacy is seeping out. |
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+8
I reckon this is Activision using hard nose techniques to reduce the PS3 royalty payment before they launch Modern Warfare 2 and DJ Hero. Activision is firmly in the driving seat because Sony requires big games on the PS3. Meaning Activision can bully Sony into reducing the royalty payment.
If Sony refuses, Activision can make Modern Warfare 2 a timed 360 exclusive; this will move PS3 owners to 360 which is the last thing Sony need right now. Sony take note, strengthen your first party titles (and 3rd for that matter) then you can call the shots once more. |
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kangarootoo
19/06/09 @ 14:04
+3
@Triggerhappytel
"They clearly don't give a flying fuck about anything but raw profit" You show me a multinational that is any other way, and I'll show you a pig in a biplane. |
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+2
Triggerhappy, no big company gives a flying fuck about anything apart from raw profit. Activision are worried because they arent making enough margin per unit sold to cover the ps3 versions of their games (or maybe they do but not enuf for their shareholders) so its only natural to at least shake their spears a bit to see if they can change things. Dont forget the biggest profit skimmers are usually retail and first parties followed by publishers and then devs usually come in last (altho every deal will be different)
Whether they follow through or not is another thing. Also I doubt theyd lose the Bond movie license why would Sony risk yet more royalties from actibliz? im sure they make a fair whack out of every bond game sold off that too. |
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muscleblade
19/06/09 @ 14:12
-9
"I pitty the people that cant efford the PS3... "
I pitty the people that buy a PS3 even if they can afford it, when theres a much better console on the market for a lower price. I can afford plenty of PS3s. I just dont need one. I already have a very good Blue ray player and the best gaming console on the market. Actually i have two.
Edited 1 times,
most recently on 19/06/09 @ 15:14
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-1
"There could be some truth in the attach rate issue. You see. If I save 100€ when I buy an Xbox 360 versus buying a PS3 then I have more money to spend on games."
That might have an effect (a very little one, but still, an effect) but is not what he supposedly is talking about as he says "the attach rates are likely to slow" which means that the attach rate will drop. The attach rate will drop (= slow) fastest if Sony drops the price as the number of consoles out there would increase while not every new owner will get it with 5-6 games straight away (no idea what the current attach rate is). If he wants the attach rate to increase, dropping the price of games would be a very good solution. Another one (though not really good) would be raise the price of the PS3 so that nobody gets one anymore. As long as current owners keep buying games, the attach rate will sky-rocket... |
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GamesConnoisseur
19/06/09 @ 14:17
+3
Wander: "I reckon this is Activision using hard nose techniques to reduce the PS3 royalty payment before they launch Modern Warfare 2 and DJ Hero. Activision is firmly in the driving seat because Sony requires big games on the PS3. Meaning Activision can bully Sony into reducing the royalty payment."
+1000 That what its all about really, why makes such a statement in so a public way? Only if they would profits from Sony's agreeing to reposture their royalty and thus Acti get the best of all the world! Acti dropping 22 plus millions Ps3 consoles? Not likely but entirely possible if PS3 situation doesnt improve in a year. |
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callum9999
19/06/09 @ 14:17
-1
Farticus: He actually said the attach rate would go down - which is very possible as people who buy less games will be more tempted at a lower price. The number of games sold can rise as the attach rate falls..
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Triggerhappytel
19/06/09 @ 14:23
+1
"You show me a multinational that is any other way, and I'll show you a pig in a biplane."
Well, EA for one, who sacrificed a lot of market share for a better long-term business plan and quality over quantity. |
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-2
Pure tosh. Not that it'll matter, since Sony will cut the price this Q3.
You can guff on about getting a "better" console at a cheaper price, but you're only denying yourself of Sony's first-party offerings, or, if you're ignorant, dismissing it altogether. Unless you have a PS3, you're missing half of this generation's stand-out titles, if not more. |
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SpaceMidget75
19/06/09 @ 14:26
0
Could we be a little bit realistic here.
Each system needs to justify the costs to produce a title for it. I'm sure it's not the case for all of their titles but it IS possible that they don't turn a profit on certain PS3 versions. I can't realistically see them dropping titles like COD, GH & TH off the PS3 roster as I'm sure the ROI is fine, however expensive new franchises that compete with PS3 exclusives could well be dropped in the future - something like Prototype for example. If that happens it will hurt the PS3....UNLESS they reduce the cost to produce titles for the system and/or reduce the cost of the console so they sell more games. Which is EXACTLY what he is angling for when making that statement. |
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