Untethered Melodies Article

Activision boss Robert Kotick, in what spare time he has from running the world's biggest third-party publisher, appears to have two main hobbies - baiting gamers on the Internet, and rattling his sabre at platform holders.

On the first front, he's doing remarkably well - between price hikes, abrasive statements and widely reported comments about "taking all the fun out of making videogames", he has single-handedly established Activision as the most widely disliked company in the industry, at least among the vocal hardcore fans who care deeply about such things. In fact, Kotick is so expert at picking exactly the statements which will annoy hardcore fans the most that he has even managed to make previous hate figure Electronic Arts look positively cuddly in the process.

One suspects that, assuming he follows the online feedback to his comments at all, he finds it all rather amusing. After all, Kotick knows better than anyone else how little of the market is represented by the kind of people who post on forums and comment threads - and Activision's recent triumph with Guitar Hero 5, effortlessly outselling The Beatles Rock Band, just goes to prove that huge amounts of noise and attention aren't necessarily meaningful.

On the second front, however, Kotick's comments are far more interesting. Although the company owes much of its size and market clout to Blizzard, which remains fairly firmly a PC and Mac developer and thus of little real interest to console platform holders (although securing a Blizzard title would be a real coup for any platform holder, of course), Kotick knows that Activision's size means that when he speaks, Microsoft and Sony have little option but to sit up and listen.

So speak he does - and on a couple of occasions in recent months, it's been fairly obvious that one of his motives is to rattle the cages of the platform holders and remind them that a significant part of their success is owed to Activision's products.

The first example came a few months ago, when Kotick went on-record saying that the company would consider dropping support for the PS3 if Sony didn't cut the price of the console. Of course, it was patently obvious to everyone that a price-cut for the PS3 was in the pipeline, and Kotick, who undoubtedly has access to Sony's upper management, would have known that perfectly well.

Besides, Activision sells millions of games on the PS3 - a smaller number of millions than it sells on the Xbox 360, but millions nonetheless. The statement, in other words, was meaningless - Kotick was demanding a price cut which he knew was happening anyway, and threatening to do something which Activision would simply never do. The context, however, was straightforward - Kotick was baiting Sony and letting them, and the world, know who wears the trousers in this relationship.

It's important, I believe, to view Kotick's most recent, widely-reported statements in the same light. During a presentation in San Francisco at the Deutsche Bank Securities Technology Conference, Kotick was asked about the possibility of a version of Guitar Hero which attached directly to the display, removing the need for a games console. His response was blunt and positive, talking about the potential for an "untethered" game to level the playing field and improve Activision's leverage with first parties. Kotick went even further, though, telling the audience that they could "expect many of our products to be playable independent of a console".

Predictably enough, this choice piece of sabre-rattling has been picked up and amplified by the media, who breathlessly reported that Activision was working on untethered versions of its games which would cut the console out of the equation entirely. There is talk of a future where the game is the console, where rather than a monolithic Sony or Microsoft branded box, we'll buy controllers which are loaded up with the chipsets required to access online services and play games.

Don't get me wrong - there's a valid discussion to be had about what's sometimes called the "death of the console". Rapidly improving broadband speeds, huge advances in processing power and the steady downward pressure on chip costs conjure up a variety of fascinating potential scenarios, ranging from the OnLive / Gaikai model to a future where television screens themselves have enough processing grunt to play fairly respectable games downloaded from online services.

Kotick's remarks, however, aren't really a major contribution to that discussion - and they're not designed to be. For a start, he didn't talk about any actual products, but merely about being impressed by some technology he's seen and being interested in the business opportunities. For another thing, Kotick undoubtedly knows perfectly well that there's a huge downside to the "system in a controller" model he's talking about. The license fee Activision pays to Sony and Microsoft isn't just a pointless tax - it means that Activision gets to sell software without having to take on the vast expense involved with designing, manufacturing and selling hardware, a process which creates vast losses for Sony and Microsoft which must then be clawed back through software licenses.

By bypassing that market, Activision would be committing to building its own hardware - or relying, perhaps, on the kind of video streaming technology which Kotick briefly mentioned, a field which is promising but still very much in its infancy. It would be investing in the reinvention of many wheels, not least of which would be the building of its own proprietary content market and online service to replace XBL and PSN - and of course, it would be creating yet another platform which game releases had to support, since there's no chance that PS3 and Xbox 360 support would simply be dropped in favour of the new untethered wonder-game.

This suggestion, in other words, belongs in the same box as all the conversations over the years about whether EA would build its own console. Supporters of the argument pointed out that EA was big enough to support the platform with its own software alone, had the financial clout to make it work, and would benefit by not paying license fees on anything it sold. Detractors, who of course turned out to be quite correct, argued that the savings on license fees would never cover the R&D and launch costs of a console, let alone the subsidising of hardware - and that EA would be quite mad to undertake that kind of risk when there were existing platform holders out there happy to do so on its behalf.

What's being suggested here isn't that Activision should build its own console; there's no hint of an ActiBlizzBox of any description. But untethering games from existing consoles, right now, is an undertaking of similar proportions. Future technology will unquestionably make it easier, but the investment required to replicate the hardware, software and services which are offered by the PS3 and 360 would be huge. Better to pay the license fees and let Microsoft and Sony do the heavy lifting - but as Kotick knows, it doesn't hurt to remind them how much they need you every now and then.